California Property Management Agreement: Template Guide

A property management agreement is the contract between a property owner and a management company. It explains what the manager will do, how much authority the manager has, how the manager gets paid and how money flows from tenants to the owner. A clear agreement protects both sides and sets expectations from day one.

This page outlines our original California property management agreement template and the rules to know. It is a general template, not legal advice. Management relationships involve licensing, trust funds and significant liability, so have a California attorney review the agreement before signing.

What it is

The agreement makes the manager the owner’s agent for specific tasks, such as marketing vacancies, screening tenants, signing leases, collecting rent, coordinating repairs and handling notices. It also sets limits. For example, the manager may need the owner’s approval for repairs above a set amount or for decisions such as filing an eviction.

The template works for single-family homes, small multifamily buildings and larger portfolios. Owners can list multiple properties on one agreement or use one agreement per property.

California rules to know

Check these well-known points against current law and Department of Real Estate (DRE) guidance:

• Licensing. Managing rental property for others for compensation generally requires a California real estate broker license, or working as a licensed salesperson under a broker. Limited exceptions exist, such as certain resident managers.
• Trust funds. Rent, security deposits and other client money must be handled as trust funds. Managers generally keep them in a trust account, avoid commingling them with business funds, keep detailed records and reconcile regularly. See trust account.
• Broker supervision. Brokers are responsible for supervising licensees and staff who handle management activities.
• Landlord tenant compliance. The manager acts for the owner, so leases, notices, deposits and rent increases must follow California law, including statewide rent cap and just cause rules where they apply.
• Fair housing. Managers must follow state and federal fair housing laws in advertising, screening and leasing.

What you cannot include

• Terms that let the manager commingle client funds with its own money
• Authority for the manager to break landlord tenant laws, such as unlawful lockouts or improper notices
• Fee terms that are vague or undisclosed, such as unlisted markups on repairs
• Screening or leasing instructions that would violate fair housing laws

How to fill it out

1. Identify the parties, including the management company’s broker license number.
2. List each property and any units or areas excluded.
3. Set the term, renewal and termination notice, and describe what the manager must hand over at the end.
4. Define duties and limits, including what requires owner approval.
5. List every fee and when it is earned.
6. Set up funds, including the operating reserve, security deposit handling and the owner distribution schedule.
7. Set the repair threshold and emergency authority.
8. Confirm insurance requirements for both parties.
9. Sign and date the agreement.

eSignature

Owners and managers are often in different places. TenantLoop eSignature lets both sides sign online. Once signed, the manager can run day-to-day operations in TenantLoop, with accounting for trust account reconciliation and owner statements, and work orders for maintenance that respects approval limits. For tips on owner relationships, see our guide to maintaining happy clients.

Bottom line

A California property management agreement should be specific about authority, fees, funds and termination. Confirm the manager is properly licensed, make sure trust fund handling follows DRE rules, and have a California attorney review the final agreement. Use this outline to make sure nothing important is left out.