Fundamentals of a property management contract:

As the property management company will be handling matters pertaining to your real estate, you will have signed a contract with the company. However before you sign the contract, make sure it includes all important points that will safeguard you and your properties in the understanding.

As the property manager will be taking responsibility of your real estate, make sure that all the names in the contract; i.e. your and the company’s name are clear and specific. The addresses of the properties they will be handling have to be included clearly in the contract. This is to prevent misunderstandings in future transactions of the property.

Both your responsibilities and the manager’s responsibilities should be clearly defined in the contract. All related fees and commissions the property management company will be charging and claiming from you have to be mentioned in the contract. This way they will not be able to claim more for larger deals that take place.

Any other terms relating to perhaps maintenance, account statements, legal matters , etc have to be clearly defined in the contract. And most important, both you and the property manager should read the contract, be happy with it and sign the contract, with the date.

Remember that on signing the contract, you are binding the manager to act on your behalf, in the best of your interests, regarding management of the property. The length of the contract with the company is usually for one or two years. Monthly contracts are not preferred by property managers as they need time to get tenants into the rent roll and their system, and to learn the property.

However in the process, make sure that the contract can be voided if required, without any reason and penalty. All that should be required would be a written 30 day notice to terminate the agreement. Ensure that the written termination date matches the hire date else you end up with a deduction for early termination. This would be the perfect property management contract.