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What is a property management contract?

What is a property management contract?

When it comes to your Aurora Property Management contract, you should be aware of all aspects that are involved. For example, a property management firm will act on your behalf for a fee, to take on the responsibilities of renting, repairing, and other daily actions for running your property. This will allow you to handle other responsibilities and business. The property management contract is in place as an identification of who is involved in the contract, as well as everyone’s roles. The agreement will provide you with all the necessary terms that you require, and will be a legal reminder of what all parties have promised, as well as how long the property will be managed. Property Management Contract

Fees And Services

One main part of a property management agreement is the fees and services. You need to understand what will be offered and what fees will be charged. Often the owner will step aside completely for this, so knowing what services are included in the management fee is essential. The most common type of fee that property managers charge is called the management fee. This includes processing rent payments, ensuring the property is repaired, and servicing tenant needs. It might also include dealing with inspections, maintenance management, and emergency maintenance calls. You may also want to know if there are any extra services included. These might be additions that are not in the agreement. Such as filling vacancies, paying bills, and maintenance issues. In some cases, you may also have excluded services. These are services that the property manager does not want to perform, and will not perform. 

Things to Include

Equal Opportunity Housing is a huge part of property management. This is a section that ensures that you will abide by the state and federal fair housing laws in your area. Another important part of the agreement outlines the limitations of the property manager’s liability. This is known as the Hold Harmless Clause. The duration of the contract is also essential to include. This should be at least a year and can be reviewed every year after. Despite this, there should also always be a termination clause. This is essential because should you end the relationship you need to have some type of protection.  There may even be an early termination fee. This will vary based on the management company and how much would have accumulated during the agreement. Not all managers charge a fee for terminating the contract early, but sometimes it may be something such as $300 to $500 dollars or something conditional. Typically the obligations of the property manager upon termination include:
  • Final financial report
  • Records and documents of time working with property
  • Record of tenant security deposit obligations
  • Transfer security deposits 
  • Provide tenants with written notice of their security deposit
  • Provide tenants with a written notice that they do not manage the property