Working With A Property Manager? 3 Crucial Clauses Every Property Management Contract Should Have
When you decide to work with a property management company, you must be sure to look over the agreement carefully, so you know exactly what is in it. Verbal agreements are immaterial if they aren't part of your signed contract. This guide equips you with some essential clauses that should be part of your property management contract to ensure you get maximum value.
Fees For Services Provided
The most important clause of your property management contract is the fees you need to pay for the services provided. While you are naturally charged a property management fee, you must understand the breakup of services rendered to you by your property manager. Typical services included in a property management fee include paying bills, inspections, rent collections, tenant selections, filling vacancies, handling regular maintenance, handling emergencies and coordinating with tenants. Some services like managing evictions, house renovations and tenant disputes may be available at an extra cost. Make sure that your property management agreement includes all inclusive and added services, so you know exactly what you are and aren't paying for.
Duration Of Contract
While many property management contracts are annual, you may want to begin by signing a temporary contract to ensure that you receive proven value from your property manager before committing to something for the longer term. Some property managers may offer a short-term contract to secure your business, but others may expect you to commit to a longer term contract from the beginning. Depending on your comfort level, you can decide to invest in a short or long-term contract. The duration of your contract should be clearly specified in the property management agreement.
Notice Of Termination
Your property management contract should have a clear termination clause. It should include reasons why the property manager or the property owner can terminate the contract. For instance, if the property manager fails to perform certain duties in your best interests, then you may have the right to terminate your contract. You will also need to give sufficient notice of termination, which you will need to agree to along with your property manager. Some termination clauses may also include a small fee for early contract termination, but may be negated if the property manager fails to live up to expectations. Issuing written notice to the other party involved in the contract typically terminates agreements.
If you're planning on working with a property management company, make sure that these clauses are included in your contract to avoid any miscommunication later.