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Property management is the practice of coordinating, managing, and supervising physical assets, such as real estate properties, on behalf of the property owners. A property management agreement is a legal document that outlines the rights and responsibilities of both the property owner and the property manager in managing the property. In this article, we will discuss the practical law surrounding property management agreements.
A property management agreement is a legally binding contract between the property owner and the property manager that sets out the terms and conditions of the management of the property. It is essential to understand the practical law surrounding property management agreements before entering into one.
One of the essential aspects of a property management agreement is the scope of services. The agreement should clearly define the services that the property manager will provide, including property maintenance, rent collection, tenant screening, property marketing, and accounting services. The property manager should also be responsible for complying with all relevant laws regarding the management of the property.
The property management agreement should also specify the length of the contract, termination clauses, and payment terms. The contract term can vary from a few months to several years, depending on the agreement between the parties. The termination clauses should outline the circumstances under which either party can terminate the agreement. The payment terms should also be clearly defined, including the payment frequency, fees, and other costs.
Another important aspect of a property management agreement is liability and indemnification. The agreement should specify the liability limits and the types of damages that the property manager is responsible for. The property manager should also agree to indemnify the property owner for any claims or losses arising out of the management of the property.
The practical law surrounding property management agreements also requires that the agreement complies with all relevant laws and regulations. This includes state and federal laws related to real estate and property management, such as fair housing laws, tenant rights, and landlord-tenant laws.
In conclusion, understanding the practical law surrounding property management agreements is critical for property owners and managers. A well-drafted property management agreement can help protect the interests of both parties and ensure that the management of the property is carried out in accordance with the law. If you are planning to enter into a property management agreement, it is advisable to seek the advice of an experienced attorney to ensure that the agreement is legally sound and enforceable.
