Property management contracts are made to protect the interests of both property owners and property management companies in a mutually beneficial relationship.
Property owners need to ensure that they understand their own responsibilities, the responsibilities of a property manager and that they will be protected if they don’t stand up to your expectations. Property owners should carefully read the property management contract before hiring a property manager to make sure that all necessary details are included.
Six things that should be included in your property management contract:
#1 Fees and services
You should ensure that the exact breakdown and total cost of all services should be included in your property management contract. If only a generalized management fee is mentioned in the agreement, then a property owner should ask for a cost breakdown of all different services.
Property owners should also not make assumptions about what services are included. As stated on https://propalliance.com/park-city-rental-property-management/, a property management contract should consist of the following services: tenant screening, advertising vacant units, payment of the bill, rent collection, evictions, landscaping and ongoing maintenance to building exterior, and drawing up the tenancy and drawing up lease agreements or leasing.
#2 The responsibilities of the property owner
Property owners need to include a clause that lays out their expectations. Additionally, the contract should also mention what things management company can do and cannot do in their dealings.
This part of the contract should also have an owner’s restrictions. For instance, it may be appropriate to state that the property owner may not have to sign an agreement with tenants on their own. Instead, the property manager would be in charge of dealing with tenants.
#3 Equal opportunity housing
A property management contract should also indicate that the management company and owner should abide by state and federal Equal Opportunity Housing Laws. Following all these laws will prevent successful discrimination lawsuits, which may be brought by tenants claiming that they were denied housing or were asked to vacate because of their sexual orientation, disability, or race.
#4 Contract duration
Generally, property management companies sign a contract of a minimum of one year. It’s a good idea if a property owner gets a property lawyer to go through the clause in a contract before agreeing for a one-year obligation.
#5 Termination Clause
Make sure you get a lawyer to have a look at the termination or cancellation clause and to make sure that the property owner can terminate the contract before it expires if they wish to do so. Obligations upon termination, such as payment of due within a given time, should also be mentioned in the clause.
#6 Property Manager’s Liability
This is a part of the contract that you can’t miss at all. The property manager’s liability defines the instances when the property manager will not be held responsible for misconduct or errors. You should discuss this with your property manager and ensure that the liabilities are reasonable.
These are the few details that you should ensure are in your property management agreement. This safeguards your interest, and ensures that your property manager is not taking you for a ride.
"Time spent with cats is never wasted." ~ Sigmund Freud