Orlando area investment property owners who don’t want to self manage turn to property management companies. If you’ve never worked with a property manager, you may not be familiar with the process. Property managers will walk clients through how their company supports clients and ask the owner to sign a property management agreement. But what is a property management agreement?
Contract
The property management agreement serves as a contractual agreement between the owner and the property manager. The agreements are designed to protect both the interests of the property owner and the property management company.
Terms and Conditions
The property management agreement will spell out the terms and conditions of the partnership. These include things like an exact breakdown of fees and services.
There should be no guessing on the part of the owner on what services are included in their fees or the length of the agreement. There should also be a clause that outlines early cancellations.
In general, full-service property management companies will offer advertising, tenant screening, rent collection, payment of bills, and evictions. They will likely also offer ongoing maintenance, periodic inspections, and oversight of repairs and renovations.
Owner and Manager Responsibilities
As a partnership, both the owner and manager have responsibilities to uphold. The agreement should clearly state the responsibilities of each party.
Owner
The contract should include the expectations of the property owner and what they can and cannot do in their interactions with the management company. For example, a property owner may be responsible for setting up a bank account with a minimum balance for repairs, emergencies, and general maintenance.
This part of the agreement should also include owner restrictions. This way an owner can’t circumvent the property management company and sign an agreement with tenants on their own.
Manager
The property manager will have their responsibilities outlined in the agreement as well. Most property management companies will set rent rates, collect rent, and oversee move-ins and move-outs. They’ll also handle tenant requests, complaints, and (when necessary) evictions.
The property management company must keep accurate records that reflect income and expenses. They must also keep copies of leases, maintenance and repair costs, inspection reports and full records of repairs completed. All these records must be made available to the owner, especially during tax season.
Legal Matters
Every agreement should include a fair housing clause where both parties acknowledge awareness and understanding of the Federal and Local Fair Housing Laws.
In addition, the legal aspects of the agreement typically include a “hold harmless clause.” This protects the property manager by limiting their liability except in cases where the company has neglected to fulfill their obligations.
For example, a property management company would not be held liable for incomplete or shoddy work done by a third-party vendor. The exemption to this would be if they failed to meet a “reasonable care clause” by neglecting to properly vet the vendor.
When you work with The Realty Medics, you can achieve property peace of mind. Our proven process ensures we get to know you and your financial goals. From there we manage tenant placement, day-to-day needs, and renewals or tenant move outs. To learn more, visit our website or call our office today at 321-947-7653.
