Agreement to Manage Office Building
Agreement made on the (date), between (Name of 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 Owner, and
(Name of Manage), 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 premises on which there is situated this certain
property more specifically defined in Exhibit A attached hereto and made a part hereof,
referred to as the Property; and
Whereas, Manager is engaged in the business of managing, operating, leasing,
and maintaining office buildings, and is experienced and competent in this business;
Whereas, Owner desires to appoint Manager and Manager desires to accept
appointment, as Owner's exclusive agent to manage, maintain, operate, and market
available space in the Property;
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:
Therefore, in consideration of the premises and of the mutual and dependent covenants
and agreements contained in this Agreement, the parties agree as follows:
I. Appointment as Manager and Acceptance. Owner hereby appoints Manager
as Owner's exclusive agent to manage, market, maintain, and operate the Property for
the account of Owner, and Manager accepts the appointment, under and subject to the
terms and conditions contained in this Agreement.
II. Term. The term of this Agreement will begin on (date) and end on (date), unless
sooner terminated in accordance with the provisions of this Agreement.
III. Duties, Rights, and Responsibilities.
A. General. Manager will have full responsibility for the management,
operation, and maintenance of the Property during the term of this Agreement
and Manager will perform these duties in an efficient and economical manner,
subject to Owner's direction and the terms and provisions of this Agreement.
B. Tenant Relations. Manager will strive to develop and maintain good
tenant relations in the Property.
C. Collections from Tenants. Manager will make diligent efforts to collect all
rents and other charges, including escalations, which may, at any time, become
due from any tenant occupying space in the Property or from any other person in
connection with the use of all or any portion of the Property. All collections must
be promptly deposited in the bank account to which Paragraph J of this
D. Tenant Complaints. Manager will receive complaints of tenants and
occupants of the Property and will, at Owner's expense, adjust the complaints,
subject to the limitations imposed by or pursuant to this Agreement.
E. Condition of Property. At Owner's expense and subject to the limitations
referred to in Paragraph K of this Agreement, Manager will:
1. Keep the Property clean and in good repair at all times;
2. Order and supervise the completion of repairs that may be
3. Generally do and perform or cause to be done and performed all
things necessary, required, or desirable to provide for the proper and
efficient management, operation, and maintenance of the Property;
4. Make or cause to be made any additional repairs to the Property or
any part of it; and
5. Provide maintenance or other service for all or any part of the
F. Repairs, Maintenance, or Service. Owner, in a manner satisfactory to
Manager, must make available to Manager the sums necessary to pay the costs
of repairs, maintenance, or service described in this Paragraph.
G. Right to Subcontract. Manager, on behalf of and in the name of Owner,
may subcontract the performance of any of its duties under this Agreement.
Manager is expressly authorized to execute such subcontracts on behalf of
Owner and Owner agrees that the name of Owner, rather than that of Manager,
may appear on the face of such subcontracts, at the option of Manager. In the
event of any such subcontract or agreement, Manager must include a provision
in it requiring that the subcontractor carry Workers' Compensation Insurance in
accordance with all applicable state and federal laws and Employer's Liability
Insurance applicable to and covering all persons performing work under this
Section. Manager will require subcontractor to furnish Manager with certificates
demonstrating current coverages as described in this Paragraph.
H. Licenses, Permits, and Compliance with Laws. At Owner's expense,
Manager will endeavor, for the account of Owner, to obtain and renew, as
necessary, all licenses and permits that may be required for operating and
maintaining the Property and for complying with all laws and regulations of
applicable governmental authorities in the course of operation and maintenance,
except for sales tax permits which, by law, are the responsibility of Owner.
I. Capital Expenditures. Owner must specifically authorize any capital
expenditure. With respect to the purchase and installation of major items of new
or replacement equipment, Manager will recommend that Owner purchase these
items when Manager determines the purchase to be necessary. All new or
replacement equipment or other capital expenditure exceeding $___________
must be awarded on the basis of competitive bidding. If Owner requires, Owner
may communicate to Manager its acceptance or rejection of bids or Manager will
accept or reject applicable bids. Owner may pay capital expenses from its own
resources or may authorize payment by Manager out of the Operating Account.
J. Property Expenditures Account.
1. Manager must, within (number) days after the date of execution of
this Agreement, open a commercial checking account (the Property
Expenditures Account) for the Property at (Name of Bank) at (street
address, city, state, zip code). This account will be in the name of
Manager, but must be designated as a trust account in favor of Owner.
2. Owner, at the commencement of the term of this Agreement, will
advance to Manager the sum of $___________ for deposit in this account
to be used for working capital. All expenses of the Property paid by
Manager must be paid from the Property Expenditures Account. However,
Manager will have the right to maintain petty cash funds not in excess of
$___________. Manager must pay, out of the funds of Owner, all
expenses and costs of operating the Property which, under the terms of
this Agreement, it is authorized to pay, by check, drawn on the Property
Expenditure Account. In addition, Manager must remit to Owner all
unexpended funds (except for a reserve for contingencies which will
remain in the Property Expenditures Account in the amount of
$___________ or such amounts as may be available after all proper
disbursement from the Property Expenditure Account as of the last day of
the month). The designation of those employees of Manager authorized to
sign checks on the Property Expenditures Account will be subject to the
approval of Owner. Such approval will not be unreasonably withheld.
3. Notwithstanding anything in this agreement to the contrary,
Manager will never be obligated to incur any expense or liability in the
performance of this Agreement which, when added to the existing
liabilities of Manager incurred in connection with the performance of this
Agreement, would exceed, in the aggregate, the amount of funds in the
Property Expenditure Account at that time. Owner agrees to pay all debt
service payments out of Owner's funds and to relieve Manager of that
responsibility. Owner further agrees that the following sequence of
payments is acceptable: (identify payments).
K. Funding Requirements. Should the expense of operating the Property
show at any time that the sum deposited by Manager in the Property
Expenditures Account is less than the amount needed to provide sufficient cash
on hand to pay all recurring expense, plus any known nonrecurring expenditures
anticipated to occur within the next (number) days, provided same has been
approved by Owner in conformity with this Agreement. Manager must give
written, telegraphic, or Telefax notice to Owner of the sum actually needed.
Owner must then, immediately, or within (number) hours, advance that sum to
Manager. Failure to provide the funds will be considered a material breach of this
contract and will lead to its immediate termination by Manager.
L. Preparation of Budget. At least (number) days before the end of each
calendar year during the term of this Agreement and for the calendar year during
which the term commences, within (number) days of commencement or within
(number) days after the date of execution, whichever is later, Manager must
prepare and submit to Owner a proposed budget for the operation and
maintenance of the Property during the coming calendar year. On approval of a
proposed budget by Owner, with the changes Owner indicates, Manager will
commence operation of the Property. Manager must not, during the period
covered by such budget, incur any expense in the operation and maintenance of
the Property that would result in either: the amount of authorized expenditures in
any budget category being exceeded by more than _____%; or the amount of the
total budget being exceeded by more than _____%, without prior approval of
Owner. Furthermore, Manager will secure Owner's prior written approval for all
expenditures in excess of $___________ for any one item of operation, except
for the specific monthly or recurring operation or maintenance charges that the
budget may designate, and for items that would be deemed an emergency and
required for maintaining tenancy. However, management must take due diligence
to contact Owner for approval in case of an emergency.
M. Supplies and Equipment. At Owner's expense, Manager will purchase,
provide, and pay for all janitorial and maintenance supplies, tools and equipment,
restroom and toilet supplies, light bulbs, paints, uniforms, and stationery and
office supplies necessary for the efficient and economical operation and
maintenance of the Property. All such supplies, tools, and equipment must be
delivered to and stored in the Property and may be used only in connection with
the management, operation, and maintenance of the Property. Manager must
attempt to purchase all goods, supplies, or services at the lowest cost available
from reputable sources in the locality where the Property is situated.
N. Property Personnel. At Owner's expense, Manager must employ, pay,
furnish, train, supervise, discharge, and fix the compensation of those employees
reasonably necessary for the efficient and economical management,
maintenance, and operation of the Property, including stationary engineers,
maintenance personnel, porters, janitors, maids, security guards, secretaries,
managers, and other on-site personnel. Included in, but not limited to, Owner's
expense for Manager to employ personnel are any reasonable costs incurred in
the hiring of employees to work for the Property, such as employment agency
fees and advertising charges. Included in, but not limited to, Owner's expense for
Manager to train personnel are any reasonable costs incurred by sending an
employee to a reputable school for courses specifically designed to increase the
employee's job knowledge. If an employee does not work exclusively for the
Property, the expense will be prorated accordingly. All employees working at the
Property will be employees of Manager. Those employees necessary to staff the
management operation are to be budgeted for and approved by Owner. Owner
agrees that at no time will Owner attempt to employ an employee of Manager
during the term of this Agreement or for (number) days thereafter
O. Workers' Compensation and Employee's Liability Insurance. Manager
must maintain Workers' Compensation Insurance and all other insurance
necessary to meet federal and state requirements in accordance with the laws of
the State of (name of state) and Employer's Liability Insurance applicable to and
covering all persons engaged in performance of the work to be performed under
this Agreement. Owner must reimburse Manager for the cost of premiums, fees,
or any other cost connected with same.
P. Payment of Employees and Suppliers. At Owner's expense, Manager
will promptly pay to all of its employees all monies due or to be paid to them and
will promptly pay for all supplies, merchandise, materials, labor, or other items
ordered, furnished, or used by it or for it in the performance of the duties of
Manager under this Agreement and will not suffer or permit any valid mechanics'
liens or other valid liens to be filed against the Property by reason of any work or
materials actually furnished. If such a lien, with or without merit, is filed against
the Property, Manager must promptly notify Owner.
Q. Payment of Other Costs. At Owner's expense, Manager must also pay
the following expenses:
1. Cost of collection of delinquent rentals collected through an
attorney or collection agency; cost of printed checks for each bank
account required by Owner;
2. Cost of an on-site office (if required) including, but not limited to, the
office furniture and equipment; cost of reproduction, telephone, postage or
express mail service, supplies, and printed forms required to manage the
3. Mileage reimbursement for on-site personnel as approved by
budget; reasonable travel costs and incidental expenses necessitated
through the normal or routine management of the Property or due to
requests by Owner which require travel; and
4. Cost of any other item or items associated with the operation of the
Property not specifically set out in this Agreement.
R. Payroll Taxes. Manager will have full and exclusive responsibility and
liability for payment of all federal, state, and local payroll taxes and for
contributions for unemployment insurance, Social Security (F.I.C.A.) and other
benefits imposed or assessed under any provision of law or by regulation, and
which are measured by salaries, wages, or other remuneration paid or payable
by Manager to its employees engaged in any work in connection with this
Agreement or indicated in it, for the payment of which Owner must reimburse
Manager. Manager will have full and exclusive responsibility and liability for the
withholding and payment of any income taxes required to be withheld from the
wages or salaries of such employees under any provision of law or regulation.
Manager agrees to hold Owner harmless from all claims for penalties, interest, or
costs that may be assessed under any law, rule, or regulation with respect to its
failure or inability to perform such responsibilities.
S. Other Insurance. Except for the insurance specified in Paragraph R,
Owner must secure and maintain, in amounts mutually agreed on, (type of
insurance). These policies must name the Manager as a coinsured and Owner
must furnish Manager with certificates evidencing that the insurance is in force.
T. Indemnity. Owner agrees to save Manager free and harmless from any
and all liability, whether to Owner or other persons, from any and all claims for
damages or injuries to persons or property, including property of Manager, from
whatever cause, including the sole negligence of Manager in or about the
Property described above. Owner agrees to defend, at Owner's expense, any
suits that may be brought against Manager on account of such liability, and to
pay any judgments that may be rendered against Manager on account of such
liability. However, this clause may not be construed to release Manager from any
liability to Owner for a breach of any of the covenants agreed to be performed by
Manager under the terms of this Agreement.
IV. Financial Management.
A. Financial Services Provided by Manager. It is the responsibility of
Manager to perform certain activities relative to the manag