Free Commercial Property Management Agreement Template: A Comprehensive Guide

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Essential Elements for a Comprehensive Agreement

A well-crafted commercial property management agreement is a crucial legal document that outlines the terms and conditions governing the relationship between a property owner and a property management company. To ensure a professional and legally sound agreement, the following essential elements should be included:

Free Texas Property Management Agreement Template - PDF  Word
Free Texas Property Management Agreement Template – PDF Word

1. Identifying Information

Parties Involved: Clearly state the names and contact information of the property owner and the property management company.

  • Property Description: Provide a detailed description of the property, including its address, legal description, and any specific features or characteristics.

  • 2. Scope of Services

    Management Responsibilities: Specify the exact services the property management company will provide, such as rent collection, tenant screening, maintenance, and financial Reporting.

  • Exclusions: Clearly delineate any services that are not included in the agreement, to avoid misunderstandings.

  • 3. Term and Termination

    Agreement Duration: Establish the initial term of the agreement and outline any renewal options or automatic renewal provisions.

  • Termination Grounds: Specify the circumstances under which either party can terminate the agreement, such as breach of contract or material default.

  • 4. Rent Collection and Disbursement

    Rent Collection Procedures: Outline the procedures for collecting rent from tenants, including due dates, late fees, and payment methods.

  • Rent Disbursement: Describe how rent payments will be disbursed to the property owner, including any deductions for management fees, expenses, or reserves.

  • 5. Financial Management

    Accounting and Reporting: Specify the frequency and format of financial reports that the property management company will provide to the property owner.

  • Petty Cash: Establish guidelines for the management and use of petty cash funds for minor expenses.
  • Insurance: Address the property owner’s responsibility for maintaining insurance coverage and the property management company’s role in coordinating insurance claims.

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  • 6. Tenant Relations

    Tenant Screening: Outline the tenant screening process, including credit checks, background checks, and rental history verification.

  • Tenant Complaints and Disputes: Describe the procedures for handling tenant complaints and resolving disputes.
  • Tenant Evictions: Address the process for evicting tenants who violate the lease agreement or fail to pay rent.

  • 7. Property Maintenance

    Maintenance Responsibilities: Specify who is responsible for maintaining the property, including common areas, exterior grounds, and individual units.

  • Emergency Procedures: Outline the procedures for handling emergency situations, such as water leaks, power outages, or security breaches.
  • Capital Improvements: Address the approval process for capital improvements and how costs will be allocated.

  • 8. Management Fees and Expenses

    Management Fee Structure: Clearly state the basis for calculating the property management fee, such as a percentage of gross rental income or a flat fee.

  • Reimbursable Expenses: Identify any expenses that the property owner will be responsible for reimbursing to the property management company.

  • 9. Indemnification and Liability

    Indemnification: Specify the circumstances under which each party will indemnify the other for losses or damages arising from the agreement.

  • Limitation of Liability: Establish any limitations on the liability of either party, such as exclusions for certain types of damages or losses.

  • 10. Governing Law and Dispute Resolution

    Governing Law: Specify the jurisdiction that will govern the interpretation and enforcement of the agreement.

  • Dispute Resolution: Outline the procedures for resolving disputes, such as mediation or arbitration, before resorting to litigation.

  • Additional Considerations

    Signatures: Ensure that both the property owner and the property management company sign the agreement to make it legally binding.

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  • Amendments: Establish a process for amending the agreement if necessary, requiring written consent from both parties.
  • Notices: Specify how notices or communications should be sent between the parties.

  • By carefully addressing these essential elements and tailoring the agreement to the specific needs of the property and the parties involved, you can create a professional and comprehensive commercial property management agreement that protects the interests of both the property owner and the property management company.