PROPERTY MANAGEMENT AGREEMENT THIS AGREEMENT, effective as of ________(DATE), by and between
______________ (COMPANY NAME), which with its successors or assigns are hereinafter termed the "Owner", and ______________________ (COMPANY NAME), which with its successors or assigns is hereinafter termed "Agent". RECITALS: A. The Owner holds legal title to the property , known consisting as of
__________________________________(PROPERTY
ADDRESS)
approximately __ (# ) apartment units (hereinafter termed "the Property"). B. The Owner is desirous of employing the services of the Agent and the Agent is
desirous of performing such services in the manner and upon the terms and provisions hereinafter set forth. NOW, THEREFORE, in consideration of the mutual covenants of the parties hereto, and other good and valuable consideration, the parties hereto agree as follows: 1. TERM. The Owner hereby employs the Agent, and the Agent agrees to serve, as managing agent for the Property with the responsibilities set forth herein for the initial term of three (3) years beginning on the 8th ______________ (DATE) , and terminating at Midnight on _________ (DATE IN 3 YEARS), and continuing from year to year thereafter. Either party hereto may cancel this Agreement (a) at the expiration of the initial term, (b) at the expiration of any
succeeding term or terms, or (c) in the event of the sale of the Property, provided that in the event of any such cancellation, the party so canceling shall give the other party not less than sixty (60) days prior written notice of such termination. The Agent shall at all times perform the services to be provided hereunder diligently and in a workmanlike manner designed best to protect and to promote the reasonable interests of the Owner in the successful operation of the Property. 2. TERMINATION FOR CAUSE. In addition to cancellation rights set forth in Paragraph (1), above, if Agent breaches any of the terms of this Agreement, and if Owner shall give Agent written notice of said breach, and if Agent fails to remedy the breach within fifteen (15) days after receiving the above described notice, Owner may terminate this Agreement, except if remedy cannot be completed in fifteen (15) days but Agent commences to cure breach and continues to diligently pursue the remedy of the breach. 3. SUPERVISION; ACCOUNTS AND RECORDS. All services of the Agent hereunder shall be supervised by the managing member of Agent, _________________ (NAME). All employees and contractors of the Agent shall be qualified for the services which they respectively perform, and accounts shall be kept in conventional form suitable for prompt auditing and review. Accounts and records of the Agent relating to the Property and its operation (including, without limitation, all books, accounts and records referred to in Paragraph (10) hereof) will be made available to the Owner and its authorized accountants or auditors during all normal business hours. Office facilities, staff and equipment required for the efficient operation and maintenance of said property shall be maintained by Agent.
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4. SERVICES OF AGENT. The Agent, at its own expense, except as otherwise hereinafter expressly provided, shall (a) supply all services pertaining to management and operation of the Property, including all supervision, billing, collections and accounting incidental thereto, and (b) provide adequate and suitable qualified personnel, facilities and equipment for the performance of such functions. It is agreed that any such administrative and clerical personnel necessary for the performance of such functions shall either (a) be employees of and on the payroll of Agent or (b) be independent contractors of Agent and, in all such cases shall be paid for out of Agent’s compensation hereinafter provided. 5. PURCHASE OF SUPPLIES & CONTRACTS FOR LABOR & MATERIAL. All purchases of necessary supplies and contracts for labor and materials for the account of the Property shall be charged to the Property. Contracts for labor and materials in excess of $2,000 shall be competitively bid and submitted to Owner for prior written approval. In the case of contracts, the cumulative obligation of the contract shall be considered in determining whether Agent needs prior written approval. All invoices shall be promptly paid and all discounts shall accrue to the benefit of the Owner. 6. REPAIRS AND ALTERATIONS. Agent shall use its best efforts to insure that the Property is properly maintained in an attractive condition and in a good state of repair. In this regard, Agent is authorized to make such repairs and alterations to the Property as may in Agent's reasonable judgment be required to keep the Property in safe, sound and rentable condition, the cost thereof being charged to the Property. Except in the case of emergency, any repair or alteration job in excess of $5,000 shall be submitted to the Owner for prior written approval. In cases of emergency, Agent shall endeavor
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to notify Owner as soon as possible of the nature thereof and the approximate cost of repairs. Repairs to the Property which cannot be handled by Property employees or Subsidiary employees performing operating services for the Property shall be handled either by outside contractors approved by Agent, or if above the $5,000 approval limitation, by outside contractors first approved by the Owner. 7. RENTAL COLLECTION. The Agent is authorized for the account of the Owner to collect all rental or other income accruing to the Owner from the Property during the term of this Agreement when such amounts become due. Agent shall, in the name of Owner, make use of such methods of legal process against a delinquent tenant as may be necessary to enforce the collection of rent or other sums due from tenant, to enforce any covenants or conditions of any lease and to recover possession of any part of said property. No form of legal action shall be instituted and no settlement, compromise or adjustment of any matters involved herein shall be made without the prior written consent of Owner. All reasonable out of pocket expenses in connection with such proceedings shall be charged to the Property and so far as the service of attorneys may be necessary, shall be performed by attorneys selected by the Owner. 8. BANK ACCOUNTS. Agent shall establish a separate bank account with a lending institution approved by Owner which shall be used for the deposit and disbursement of funds pertaining to the Property. The account is designated as ___________________ ( COMPANY NAME) Agent shall be authorized to draw upon such account, but only for the purposes of this Agreement, inclu ding payment of all amounts herein provided to be charged to the Property, and under no circumstances shall it be drawn upon for any other purpose, or to the benefit of Agent, except for
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Agent's compensation as herein stipulated; provided, however, that nothing herein contained shall require Agent to advance any money for the Property. 9. MONTHLY STATEMENTS AND REMITTANCES. Agent shall keep books, accounts and records that reflect all revenues and all expenditures incurred in connection with the management and operation of the Property. The books, accounts and records shall be maintained at the principal place of business of Agent. On or before the 20th day of each calendar month during the term hereof, Agent shall furnish to the Owner a detailed statement of all revenues and expenditures for each preceding month, bank statements and bank reconciliations, invoices for capital expenditures, cash disbursement register, the status of rental payment delinquencies, if any, as well as such other information relating to the operation or management, leasing and other activities pertaining to the Property that, in the opinion of Agent, require the attention of Owner. Agent shall, at the time of rendering such statement, pay to Owner the remainder of such revenues after deduction of such charges as are authorized by this Agreement. Upon termination of this Agreement by lapse of time or otherwise, Agent shall as soon as possible and practical, make full settlement with Owner and deliver to Owner all books, accounts and records pertaining to the Property. Owner shall retain for safekeeping all original invoices, statements, purchase orders, billings and other documents delivered by Agent with respect to the Property. 10. NEGOTIATION OF LEASE CHANGES OR DISPUTES. The Agent is authorized, for and on behalf of the Owner, to negotiate with tenants in possession of said property under lease or rental agreements with respect to any request for modification of, or any question or dispute which may arise under, said lease or rental
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agreements; provided, however, that any such change or modification shall be subject to the prior written approval of Owner. 11. MANAGEMENT COMPENSATION. For management services rendered by Agent hereunder, Owner shall pay a management fee equal to five percent (5%) of the gross annual income from any source relating to the Property (including, but not limited to, base rent, payment or reimbursement of common area maintenance, real estate taxes and insurance), which management fee shall be calculated and paid monthly. 12. ADVERTISING. The Agent may, only with the approval of Owner and at Owner's expense, advertise the Property in printed media to the extent customary for the type of property and current vacancy rate. 13. INDEMNIFICATION. The Owner agrees: (a) To indemnify and save harmless the Agent from all damage, loss or liability, and
all expense, cost or charges in connection therewith, growing out of or arising in connection with the Agent's management and leasing of the Property in compliance with the terms hereof, including liability in respect to injury or death suffered by any employee of the Property or by any employee or agent of Subsidiary or any other person or persons whomever, arising from any
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such act, default or negligence that is due directly or indirectly to Owner's own negligent act or omission. (b) To reimburse Agent upon demand for any monies which Agent is required to pay
out, either in connection with, or as an expense in defense of, any claim, civil or criminal action, proceeding, charge or prosecution made, instituted or maintained against Agent, or Owner and Agent jointly or severally, affecting or due to the condition or use of the Property, or acts or omissions of employees of Owner, or arising out of or based upon any law, regulation, requirement, contract or award relating to the hours of employment, working conditions, wages and/or compensation of employees or former employees of Owner. (c) To defend promptly and diligently, at Owner's sole expense, any claim, action or
proceeding brought against Agent, or Agent and Owner jointly or severally, arising out of or connected with any of the foregoing, and to hold harmless and fully indemnify Agent from any judgment, loss or settlement on account thereof; provided, however, that Agent shall be responsible for any such act, default or negligence that is due directly to indirectly to Agent's own negligent act or omission. It is expressly understood and agreed that the foregoing provisions of this Paragraph (14) shall survive the termination of this Agreement, but this shall not be construed to mean that Owner's liability does not survive as to other provisions of this Agreement. 14. INSURANCE. The Owner agrees:
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(a)
To procure and keep in force, at Owner's expense, during the existence of this
Agreement, comprehensive general liability insurance, containing such coverage as Owner may deem appropriate. (b) To procure and keep in force, at Owner's expense, fire insurance with extended
coverage endorsement, property damage insurance and such other types of risk insurance covering the Property that Owner may elect to carry. It shall be the responsibility of the Owner to procure an appropriate clause in, or endorsement on each of the policies referred to in this Paragraph (15) whereby the insurer waives subrogation or consents to a waiver of the rights of recovery against Agent. The Owner hereby waives any right of action which it might have against Agent under this Agreement in connection with the perils covered by the abovedescribed policies of insurance. The Agent agrees: (a) Agent shall maintain Worker’s Compensation and employee liability insurance,
naming Owner and Owner’s Lender, the Home Savings & Loan Company of Youngstown, Ohio, as additional insured, covering all employees working on or about the Property, and death, injury and/or property damage occurring on or about the Property, or resulting from activity theron, with liability insurance limits for death of or injury to persons in amounts not less than required by applicable law. (b) Agent shall maintain Employer’s Liability Coverage with a minimum limit of
coverage of $100,000 Each Employee and $500,000 Aggregate. Agent shall maintain insurance covering bodily injury for intentional torts when injury is substantially certain to occur.
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15. GOVERNMENT REGULATIONS. Agent shall manage the Property in full compliance with all laws and regulations of any federal, state, county or municipal government having jurisdiction over the Property. 16. BANKRUPTCY. This Agreement shall terminate immediately if bankruptcy proceedings, whether voluntary or involuntary, are commenced against Agent, or if Agent enters into an assignment for the benefit of creditors. 17. NO PROPERTY INTEREST CREATED. Nothing in this Agreement shall be deemed to create or shall be construed as creating in Agent any property interest in or to the Property. 18. NOTICES. All notices required hereunder shall be in writing, and shall be deemed to have been duly given if delivered in person or by certified U.S. Mail, postage prepaid, with return receipt requested, to Owner at: Owner: ______________________ ______________________ ______________________ ______________________
and to the Agent at: ______________________ ______________________ ______________________ ______________________
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19. ASSIGNMENT. This Agreement shall be binding on and inure to the benefit of the successors and assigns of the parties hereto; provided, however, that this Agreement may not be assigned by Agent without prior written consent of Owner, or by Owner without prior written consent of Agent. 20. MODIFICATION. This Agreement may not be modified unless such modification is in writing and signed by the parties to this Agreement. IN WITNESS WHEREOF, the Owner and Agent have executed and delivered the foregoing Agreement in triplicate at Cleveland, Ohio as of the day, month and year first above written. Signed in the presence of: THE OWNER: _____________________ (COMPANY NAME) By: _____________ (NAME) Managing Member
THE AGENT: _____________________ (COMPANY NAME) BY: _______________ (NAME) Managing Member ______________________________
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