A management agreement is a legally binding contract between a property owner and a management company. The agreement outlines the terms and conditions under which the management company will manage the property, including responsibilities, services, fees, and obligations of both parties.

The primary purpose of a management agreement is to provide property owners with professional management services that make their lives easier and help maximize their property`s value. Property management companies typically offer a variety of services that can include marketing, tenant screening, leasing, rent collection, maintenance and repairs, and accounting.

The management agreement is a critical document that governs the entire relationship between the management company and the property owner. It sets out the scope of services, terms of payment, termination clauses, and other important provisions that should be carefully reviewed before signing.

One crucial aspect of any management agreement is the fee structure. Property management companies typically charge a percentage of the rental income, typically ranging from 3% to 10%. Other fees may include leasing fees, maintenance fees, and additional charges for special services. Property owners should fully understand the fee structure and ensure that it aligns with their budget and expectations.

Another important consideration is the duration of the agreement. Most management agreements are for one year, but they can vary from a few months to several years. Property owners should carefully consider the duration of the contract and ensure that it aligns with their goals for the property.

Property owners should also carefully review the responsibilities and obligations of both parties outlined in the management agreement. This includes understanding the management company`s responsibilities for maintenance and repairs and the property owner`s obligations for providing access and maintaining the property.

Lastly, property owners should review the termination clauses of the agreement, including any fees or penalties for early termination. They should also ensure that the management company provides clear instructions on how to end the agreement and what happens to the property management services after the termination.

In summary, a management agreement is a critical document that outlines the terms and conditions of the relationship between a property owner and management company. Property owners should carefully review the agreement, including the fee structure, duration, responsibilities and obligations, and termination clauses, before signing to ensure that it aligns with their goals for the property.