Management Agreement for Properties

            Anytime you enter into an agreement which will take longer than a year to preform in real estate a contract or agreement needs to be in place. A property manager needs to be under contract in order to protect yourself before you allow one to have possession of your property or properties. They will be exercising control over your real estate to earn income, manage the rental agreement or leases, they will manage the expenses, mortgage payments and the accounting for the agreed upon fee. If your property manager pays themselves before, they pay other expenses they are committing a crime and should be reported and removed. Their decisions affect the cash flow of the property and they cannot pay themselves and then the other expenses butting your credit worthiness at risk.

The property management give the management the authority to:

• Locate new tenants
• Enter into rental or lease agreement even for terms greater than a year
• Deliver possessions of units or space
• Secure rents
• Incur operating expenses
• They can disperse funds to pay expenses, make mortgage payments and manage the fees

The landlord is responsible to give the property manager:

• Copies of their lease or rental agreements
• Service and maintenance contracts
• Information of the utilities
• Keys and security devices
• Security deposits
• Knowledge concerning hazards, worker’s compensation insurance for the property and the employees

A property management agreement should be on the long property management form so you have the ability to write out a detailed description of what is expected of the manager and what you will perform in house. The list should demand that you manage write out a detailed report documenting the maintenance they recommend and have performed. (RPI form 590) Some landlords want their managers to maintain the property at a below standard level, if you accept these terms, you should be compensated for it because you haven’t the authority to increase the drawl of the property by making improvements. If you do accept this assignment you have to document the items which the landlord has ordered you to neglect. Not maintaining the landscape may cause structural damage to the property if it is overgrown or top heavy. A dead tree falling on the property can create considerable expenses.

The property manage will:

• Collect rents and other amounts due.
• Seek areas where other funds may be accumulated
• Collecting and accounting for and refunding of security deposits
• Pay the operating expenses and make mortgage payments from rents received
• Ensure that the team complies with any rent control ordinances

To ensure this is properly done the property manager must maintain the properties trust account. You choose the bank or lending institution and call for the periodically to the landlord as they instruct and upon the termination of your property management agreement. As a landlord you should at least receive your statement of the accounting and when the agreement terminates. Property managers cannot collect their management fees without a written contract, this contract is needed for your protection and for theirs.

Note: Images on this blog site are from a free source or taken by the author. No image or group of photos is intended to represent the people the author serves. The author does not care about Race (that is a politically correct term that he does not like because we are all of the same Race, the Human Race. He prefers the term ethnicity, color, religion, sex, gender, marital status, disability, genetic information, national origin, source of income, Veteran or military status, ancestry, citizenship, primary language or immigration status.) He is a service provider for all people. We will all rise together when we band together and help one another. Joseph Erwin is a Real Estate Broker, DRE # O2131799, and a CA general contractor # B 696662. He’s a member of the CRMLS and The East Valley Association of Realtors located in the Inland Empire region of Southern California. This writing is not to be used as legal counsel the author is not a lawyer and does not give legal advice other than consult a lawyer before acting.