Management Agreement

Read on to learn more about a Management Agreement, including:

• What's included in a Management Agreement?
• How do I write a Management Agreement?
• Frequently asked questions about Management Agreements

How do I write a Management Agreement?

Below we'll go over the common provisions and include sample language for each to help guide you.

1. Introduction

This section serves as the cornerstone of the agreement, setting forth the essential details such as the date of effectiveness, the identifying parties, and the overarching context for the management relationship ahead.

It lays the groundwork for a clear understanding of the terms and conditions that will govern the resolution process, ensuring transparency and clarity in the agreement between the Releasor and Releasee.

2. Definition of Services

This section clearly delineates the range of management services that will be offered, providing a detailed breakdown of specific tasks and responsibilities that the manager will undertake. By outlining the scope of services in a comprehensive manner, both parties can have a clear understanding of what to expect, ensuring transparency and alignment in their professional relationship.

This detailed description serves as a roadmap for the manager to effectively fulfill their duties and responsibilities, setting the stage for a successful collaboration between the parties involved.

3. Term and Termination

This section specifies the agreement's duration and conditions under which either party may terminate the agreement, including notice periods and termination fees, is crucial for outlining the parameters of the relationship between the parties involved.

This section serves as a roadmap for both parties, clearly defining the timeline and procedures for potential termination, providing a structured framework for resolving any disputes that may arise. By establishing these terms upfront, both parties can navigate the agreement with confidence and transparency, promoting a sense of trust and accountability throughout the duration of the contract.

4. Compensation and Fees

In this section, you can describe how the manager is compensated, including details on management fees, performance bonuses based on predefined benchmarks, as well as any additional expenses and reimbursements that may be incurred during the term of the agreement.

This section outlines the financial arrangements between the parties involved, ensuring clarity and transparency in how the manager will be remunerated for their services rendered.

5. Duties and Responsibilities of the Manager

You can detail the specific obligations and tasks the manager is expected to perform under the agreement, outlining the scope of responsibilities such as property maintenance, tenant communication, financial reporting, and compliance with local regulations.

This section serves as a detailed roadmap for the manager, clearly defining their duties and expectations to ensure efficient and effective management of the property. By setting out these specific tasks upfront, both parties can work together seamlessly towards a successful and mutually beneficial partnership.

6. Duties and Responsibilities of the Owner

For this section, you can outline the owner's obligations to support the manager in performing their duties, such as providing necessary documents or approvals, ensuring clear communication channels are established for prompt decision-making and resolving any issues that may arise.

The owner agrees to collaborate with the manager in a proactive manner, offering guidance and assistance as needed to facilitate the smooth operation of the property. This mutual support and cooperation between the owner and manager are essential for maintaining a successful partnership and achieving the shared goals outlined in the agreement.

7. Accounting and Financial Records

This section specifies how financial records will be kept, the frequency of financial reporting to the owner, and the handling of the property's funds. This section outlines the detailed procedures for maintaining accurate financial records, including the use of accounting software, the segregation of funds, and the secure storage of all financial documents. It also specifies that financial reports will be provided to the owner on a monthly basis, detailing income, expenses, and any outstanding payments.

Additionally, it clarifies how the property's funds will be managed, including the establishment of separate bank accounts and the authorization process for withdrawing funds for property-related expenses. This ensures transparency and accountability in the financial management of the property, fostering a sense of trust and confidence between the owner and manager.

8. Insurance

This section emphasizes the importance of both the manager and owner maintaining sufficient insurance coverage for the property, including potential liability coverage for the manager. Adequate insurance protection not only safeguards the property and its assets but also provides peace of mind in the event of unforeseen circumstances or risks.

By ensuring that both parties are adequately covered, this clause promotes a proactive approach to risk management and protection, ultimately contributing to a secure and stable property management arrangement.

9. Indemnification

This section on Indemnification obligates each party to compensate the other for any losses or damages that may arise from their respective breaches of the agreement or instances of negligence. It serves as a crucial provision to ensure accountability and responsibility in the event of any unforeseen circumstances or errors.

By including this clause, both parties are held accountable for their actions, promoting transparency and trust throughout the duration of the agreement.

10. Confidentiality

In this clause, both parties agree to maintain the confidentiality of proprietary information exchanged during the term of the agreement, recognizing the importance of safeguarding sensitive data and trade secrets. This commitment to confidentiality fosters a secure environment for open communication and collaboration, ensuring that all proprietary information remains protected and inaccessible to unauthorized individuals.

By upholding this mutual understanding, both parties demonstrate a shared dedication to upholding the integrity and privacy of the information exchanged, ultimately strengthening the trust and reliability of their partnership.

11. Dispute Resolution

In this section, you can outline the method for resolving disputes that may arise under the agreement, such as mediation or arbitration. Dispute resolution is a crucial aspect of maintaining a harmonious relationship between the parties involved. By providing clear guidelines on how conflicts will be addressed, such as through the use of a neutral mediator or an impartial arbitrator, both parties can rest assured that any disagreements will be handled fairly and efficiently.

This proactive approach to conflict resolution promotes open communication and collaboration, ultimately strengthening the partnership and ensuring a smooth and successful property management arrangement.

12. Amendments

The amendments clause specifies that any changes to the agreement must be in writing and agreed upon by both parties in order to maintain transparency and accountability. This ensures that all modifications are documented and mutually accepted, promoting a clear and structured approach to any amendments that may arise during the term of the agreement.

By requiring written consent from both parties, any potential changes can be carefully reviewed and agreed upon, fostering a collaborative and communicative relationship between the owner and manager.

13. Notices

This section outlines the formal communication method for any notices that may be required under the agreement. It specifies the process for delivering notices, including the required format and delivery methods, to ensure that all parties are properly informed and that important information is communicated in a timely and efficient manner.

By establishing clear guidelines for notice provisions, this section promotes transparency and clarity in the communication process, facilitating effective collaboration and decision-making between the owner and manager.

14. Governing Law

For this section you can identify the jurisdiction's laws under which the agreement will be interpreted and enforced, providing a clear framework for legal compliance and resolution of any potential disputes. This ensures that both parties are aware of their rights and obligations under the law, promoting transparency and accountability in the management of the property.

By specifying the governing law, the agreement is strengthened with a solid legal foundation, giving both the owner and manager confidence in the legality and validity of their partnership.

15. Entire Agreement

This clause emphasizes that the document serves as the definitive and comprehensive agreement between the parties concerning the subject matter, effectively overriding any prior agreements or discussions, whether verbal or written.

It solidifies the terms and conditions outlined in the agreement, ensuring clarity, consistency, and legal validity in the collaboration between the owner and manager. This provision establishes a firm foundation for the partnership, setting clear boundaries and expectations for both parties moving forward.

16. Signatures

This section serves as the final step in solidifying the agreement between both parties, where they formally acknowledge and accept the terms and conditions outlined in the document through their signatures. By signing the agreement, both parties confirm their commitment to upholding the agreed-upon responsibilities and obligations, thus officially making the agreement legally binding.

This act of mutual agreement and endorsement signifies a shared understanding and dedication to the partnership, ensuring that all parties are bound by the terms set forth in the document.