When approaching a management agreement, it is important to thoroughly understand the terms that are being agreed to. It is also important that every detail that is discussed is included in the agreement and that the property owner entering a property management agreement understands which terms may be standard and which may not be. There are a number of sections of a typical property management contract to pay careful attention to.
First, it is important to understand management fees included both fees and additional management fees. It is important to always have a clear understanding of what services are included in the management fee and what services are considered extra. The agreement should include how any services that are considered extra, beyond the management fee, will be charged.
It is also important that the management agreement defines what the property owner is required to do and what the property owner is prohibited from doing. This can include any number of things such as a requirement that the property owner maintain certain types of insurance or the requirement that the property owner not place a tenant in the property themselves without the property management company's involvement.
In addition, there are important legal requirements involved when renting properties for property owners and landlords to be aware of. Concerning the property management company, it is important to understand liability disclaimers, the duration of the agreement and details of the termination provision, including any applicable fees. Property managers can be useful for any property owner seeking to have a property they own managed. Because of the important role property managers can play towards successfully managing a property, well-executed property management agreements can be equally important for property owners to understand.
Source: Landlords.about.com, "What to Look for in a Management Agreement," Accessed July 4, 2015