General information, not legal advice. This template is a starting point. Laws differ by state and city, so have a licensed attorney review your final document before you use it.
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The short version
- A property management agreement makes the manager the owner's agent and spells out exactly what the manager may do.
- Fees, repair approval limits and how owner funds and tenant deposits are held cause most disputes, so be specific.
- Many states require a license to manage rentals for others and set trust account rules for the money.
- Plan the exit: notice to end, early termination costs, and what the manager hands over.
What a property management agreement covers
A property management agreement is the contract between a property owner and the company or person who manages the property for them. It appoints the manager as the owner’s agent, defines what the manager may do without asking, sets fees, and explains how rent, expenses and tenant deposits are handled. It also says what each side owes the other and how the relationship ends.
When to use one
Use it whenever someone other than the owner runs a rental for pay, whether a full-service management company, a leasing-only arrangement, or a relative managing a few units. Even informal arrangements benefit from writing down authority, fees and money handling.
What to include
- Parties and properties, with the manager’s license number where required.
- Term, including renewal.
- Authority. Advertising, screening, signing leases, collecting rent, serving notices, hiring vendors, and a dollar limit for repairs without approval, with an emergency exception.
- Owner guidelines. Rent setting, lease length, pets and screening criteria.
- Duties on both sides, including legal compliance and insurance.
- Money handling. Trust account, operating reserve, monthly statements and owner payouts.
- Fees, each with when it is earned, and disclosure of any markups or vendor referral payments.
- Reports and records. Monthly and annual statements and tax information.
- Insurance and indemnity.
- Fair housing commitments.
- Termination. Notice, breach, early termination costs and the handover list.
State rules to check
- Licensing for managers and their staff.
- Trust account rules for rent and deposits, including where accounts may be held and record keeping.
- Deposit holding requirements that pass through to the manager.
- Required agreement terms in some states, such as written fee disclosures.
- Record retention periods.
Common mistakes
- No repair limit. Without one, the owner may be surprised by large bills or the manager may wait too long for approvals.
- Fees that are not tied to an event. “Leasing fee” should say whether it is earned when a lease is signed, when rent is collected, or both.
- Mixing funds. Commingling owner money with the manager’s operating money can violate state trust rules.
- No handover terms. When management changes, missing deposit records and keys are the hardest part.
Managing owners in TenantLoop
TenantLoop keeps each owner’s properties, rent and expenses in one set of books. Owners get their own portal with statements that come straight from the ledger, and you can pay owners and track the reserve per property without copying numbers between tools.
What is in the template
An agreement between an owner and a property manager that sets the properties, the manager's authority and duties, fees, trust account handling, reports, insurance and how either side can end it.
- Parties
- Properties
- Term
- Appointment and authority
- Owner guidelines
- Manager duties
- Owner duties
- Money handling
- Fees
- Reports and records
- Insurance and indemnity
- Fair housing
- Ending this Agreement
- General terms
- Signatures
Read the whole property management agreement template
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General template, not legal advice. Have an attorney in your state review before use.
Before you send it.
What is a typical property management fee?
Fees vary by market and property type. Common structures are a percentage of collected rent, a flat monthly fee per unit, or a mix, plus separate leasing and renewal fees. Write each fee and when it is earned in the agreement.
Does a property manager need a license?
In many states, managing rentals for others for a fee requires a real estate broker license or a property management license. A few states exempt certain activities. Check your state's licensing board.
Who holds the tenants' security deposits?
Usually the manager, in a trust account separate from the manager's own money. State law may set where and how deposits are held.
Can the owner end the agreement at any time?
Only as the agreement allows. Most agreements have an initial term, a notice period after that, and termination for an uncured breach. Some charge a fee for ending early.