VIEWS: 61 PAGES: 6 CATEGORY: Real Estate POSTED ON: 1/9/2012
Real property management requires a skill to operate income-producing real estate in a manner that produces for the owner of the property, within the limitations of applicable law and responsibility to the community, a maximum economic return. In some jurisdictions it is provided by statute that any agreement by a person to manage the real property of another for compensation, regardless of the form or time of payment, requires that the person performing the services be a licensed real-estate broker, with some exceptions, as, for example, where such duties are performed by a regular officer of a corporation or a general partner of a partnership with respect to real property owned or leased by the corporation or partnership.
Property Management Agreement Property Management Agreement made on (date), between (Name of Property Owner), a corporation organized and existing under the laws of the state of (name of state), with its principal office located at (street address, city, state, zip code), referred to herein as the Owner, and (Name of Property Manager), a corporation organized and existing under the laws of the state of (name of state), with its principal office located at (street address, city, state, zip code), referred to herein as Manager. Whereas, Owner holds title to the real property described in Exhibit A attached hereto and made a part hereof, which is zoned (classification such as C-O) for an office building, and is hereinafter referred to as the Property; and Whereas, Manager is experienced in the business of operating and managing office buildings similar to the Property described above; and Whereas, Owner desires to engage the services of Manager to manage the Property, and Manager desires to provide such services on the terms and conditions set forth in this Agreement. Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the parties agree as follows: I. Employment of Manager as Agent of Owner. Manager will act as the exclusive agent of Owner to manage and maintain the Property, subject to the terms of this Agreement. II. Best Efforts of Manager. Upon assumption of the management of the Property, Manager must thoroughly inspect the Property and submit a written report to Owner. The written report must contain the opinion of Manager concerning the present degree of efficiency under which the Property is being operated, and recommended changes, if necessary, in the management structure of the Property, in the rehabilitation of the Property, and in any other matters that will improve its efficient management. After conferring with Owner and obtaining approval to make any necessary improvements, Manager will undertake completion of the improvements. III. Leasing of Property. Manager will make reasonable efforts to lease the available space on the Property, and will be responsible for all negotiations with prospective tenants. Manager will also have the right to execute and enter into, on behalf of Owner, month-to-month tenancies of units on the Property. Manager may negotiate all extensions and renewals of such month-to- month tenancies and leases. Manager must not, without the prior written consent of Owner, enter into any lease for a term less than (number) months or more than (number) months. Manager will have the right to make concessions, including rental concessions, as inducements to prospective tenants to occupy the Property. IV. Advertizing and Promotion of Building. Manager will advertise vacancies by all reasonable and proper means. However, Manager may not incur expenses for advertising in excess of $____________ during any calendar quarter without the prior written consent of Owner. V. Maintenance, Repairs, and Operations. Manager will use its best efforts to insure that the Property is maintained in an attractive condition and in a good state of repair. In this regard, Manager will use its best skills and efforts to serve the tenants of the Property. Manager must purchase necessary supplies and make contracts for, or otherwise furnish, electricity, gas, fuel, water, telephone, waste disposal, pest control, and any other utilities or services required for the operation of the Property. Manager will make, or cause to be made, and supervise, necessary repairs and alterations, and will decorate and furnish the Property. Expenditures for repairs, alterations, decorations, or furnishings in excess of $__________ may not be made without prior written consent of Owner, except in the case of emergency, or if Manager in good faith determines that the expenditures are necessary to protect the Property from damage, to prevent injury to persons or loss of life, or to maintain services to tenants. VI. Contractors and Employees. Manager will supervise all contractors or personnel required for the efficient operation and maintenance of the Property. Manager will pay all charges for services rendered by personnel and independent contractors and the employees of independent contractors. VII. Insurance. A. Manager shall obtain, at Owner's expense, policies of insurance with respect to the subject property, providing the following coverage: 1. Fire and extended coverage insurance of the Property, including vandalism and malicious mischief endorsement, in the amount of $_______________. 2. Comprehensive general liability insurance insuring against all damages related to the Property, in the amount of $_______________ for injuries to any one person arising out of a single occurrence, $_______________ for injuries to all persons arising out of a single occurrence, and $_______________ for property damages arising out of a single occurrence. 3. Workers' Compensation Insurance for employees of the Manager employed for work on the Property as required by the State of (name of state). B. When either party obtains policies of insurance as provided in this Section or otherwise under this Agreement, the party obtaining such policies shall cause certificates of insurance to be furnished by the insurer to the other party, such certificates to provide that the policies described in the certificate may not be cancelled except on (number) days written notice to the party to whom such certificate is furnished. Policies of insurance to be obtained by the Manager under this Agreement may be provided through the master package policies maintained by Manager. C. All of the policies must name Manager and Owner as coinsured as their respective interests may appear. Owner will cooperate with Manager and any insurer in the making and delivery of all reports, notices, and other items required in connection with any of the insurance policies. VIII. Collection of Income; Institution of Legal Action A. Manager will use its best efforts to promptly collect all rents and other income issuing from the Property when such amounts become due. It is understood that Manager does not guarantee the collection of rents. B. Manager will, in the name of Owner, execute and serve such notices and demands on delinquent tenants as Manager may deem necessary or proper. Manager, in the name of Owner, will institute, settle, or compromise any legal action and make use of any methods of legal process against a delinquent tenant or the Property of a delinquent tenant that may be necessary to enforce the collection of rent or other sums due from the tenant, to enforce any covenants or conditions of any lease or month-to- month rental Agreement, and to recover possession of any part of the Property. No other form of legal action will be instituted and no settlement, compromise, or adjustment of any matters involved in such actions will be made without the prior written consent of Owner, except when Manager determines that immediate action is necessary. IX. Bank Accounts. Manager will deposit (either directly or in a depositary bank for transmittal) all revenues from the Property into the general Property Management Trust Fund of Manager, subsequently referred to as the Trust Account. The Trust Account must be maintained at all times in a national or state bank that is a member of the Federal Deposit Insurance Corporation. Manager must not commingle any of the revenues described above with any funds or other Property of Manager. From the revenues deposited in the Trust Account, Manager must pay all items with respect to the Property for which payment is provided in this Agreement, including the compensation of Manager and deposits to the reserve accounts as provided for in Section X. After such payments, Manager will remit any balance of any monthly revenues to Owner concurrently with the delivery of the monthly report referred to in Section XI. X. Reserve Account. A. Manager must establish a Reserve Account for the following items: taxes, assessments, debt service, insurance premiums, repairs (other than normal maintenance), replacement of personal property, and refundable deposits. Manager will use its best judgment in transferring adequate funds from the Trust Account to the Reserve Account in order to pay the above items without incurring late payment interest fees, cancellations, or forfeitures. If the Reserve Account contains inadequate funds to pay any of the above items, Manager must obtain approval from Owner before paying the items directly from the Trust Account. If Owner determines that the funds in the Reserve Account are excessive, Owner will direct that Manager return the excess funds to the Trust Account. The Reserve Account must be maintained in an interest-bearing savings account in a national or state bank that is a member of the Federal Deposit Insurance Corporation. B. Notwithstanding anything in this Agreement to the contrary, Manager will no
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