Just as your tenants sign a lease agreement before they begin living in your rental property, so too must you as a property owner sign an agreement with the property management company you’ve selected to work with.
This agreement, like all business contracts, should be thorough and specify the terms of the working relationship. Below we’ll discuss important pieces to look for in a property management agreement (or PMA for short).
What Should Be Included in a Property Management Agreement
At a minimum, all property management agreements should include the following sections:
- The responsibilities of the property management company – The main services your property management company provides should include leasing, rent collection and maintenance. In addition, they may also provide accounting services and other responsibilities such as handling tenant evictions. It’s important that you understand fully what is and is not included in a property management company’s scope of services before signing the PMA.
- The responsibilities of the property owner – While the management company will be handling the majority of your property’s needs, you also have a commitment to the business partnership. These could vary depending on the level of service you want out of your property management company versus what responsibilities you prefer to handle yourself.
- A section on payment and fees – Understand the contracted monthly rate for services and if there are any add-on fees (or penalties) per the terms of the contract. Some companies charge a monthly flat fee. Others charge a percentage of rent or project-based fees.
- A section on liability – In Franklin County, Ohio, property management companies are required to have sufficient liability insurance, and it’s essential to understand who is liable for what if there is an issue at the property or with a tenant. This should be clearly stated in the PMA.
- A section on contract terms and termination – Specify the terms of the relationship, its contracted length, and the process for terminating the agreement if either party should choose to end the contract early.
Before agreeing to a business partnership with a property management company, take the time to fully understand each aspect of the property management agreement. The contract should be tailored to your relationship – not something cookie-cutter off the internet. For help with any of your property management questions or needs in Columbus, Ohio please get in touch with us at RL Property Management anytime.