Property management involves control, operation and overseeing of a real estate, capital assets, personal property and equipment. A property management contract is the determiner of the specific services you receive, cost incurred and your rights in the agreement. It clearly defines the terms of contract and promotes mutual understanding of parties to the contract. It is important to interview several companies to see the one that suits your requirements in terms of property management fees and property management services. It is therefore a vital to read it thoroughly to see what every company is truly offering. The contract anticipates on aspects that may go wrong and gives a just way of solving the dispute.
Important Details You Must Look For In A Property Management Contract
- Services Promised- Check to ensure the services promised by the provider are clearly indicated in the contract as only the ones indicated in the contract are legally binding. Some providers may attempt to make promises they will not keep just to woo you as a client.
- Obligation of the Property Owner- It is important to clearly define the liabilities and responsibilities of the property owner. Check out for additional clauses the provider may add to restrict the owner like compelling the owner to secure consent before using their own property or restricting the owner from placing a particular tenant. Who incurs the cost of repair should also be clearly outlined.
- Duration of the Contract- You should carefully consider the duration of the contract to ensure it suits your requirements and terms agreed with the provider.
- Service Charge Information- It is important to first research on the price at which the service is offered as some providers may charge you more if you are unaware. The discrepancies in the price stated should be addressed before the contract is signed. The amount of service charge should be clearly indicated in the contract whether it is a fixed amount or the percentage. The kind of maintenance cost and bad check liability terms should be clearly indicated.
- Property Manager’s Liability- This liability shields the property manager from liability if certain errors do happen in the contract. Carefully consider this section and discuss it with the provider before signing.
- Termination Clause- This clause defines the conditions under which an agreement may be terminated. Check to ensure it is reasonable and no limiting clauses have been added. Other important aspects of contract cancellation include contract cancellation fee, penalties due to cancellation notice time prior to cancellation.
- Legality of a contact- You can consult your lawyer to ensure that there are specific laws governing the agreement. It is also important to know how the laws protect the parties in the contract.
- Amendments to the contract- It certain unplanned events do happen and one or both parties need to change parts of the agreement what terms will be used in amending the contract. It is important to have a trusted person who can make correct decisions without bias.
The importance of double-checking a property management contract can never be over-emphasized.