Free Property Management Agreement Template

A property management agreement delegates the day-to-day operations of a rental property to a professional manager. It's essential for landlords who own multiple properties, live far from their rentals, or simply prefer not to handle tenant relations, maintenance, and rent collection themselves.

What property managers typically handle: - Tenant sourcing: Advertising vacancies, screening applicants (credit checks, references, employment verification), and executing lease agreements. - Rent collection: Collecting monthly rent, pursuing late payments, issuing notices for non-payment, and handling deposit returns. - Maintenance: Coordinating repairs, managing contractors, handling emergency maintenance calls, and conducting regular property inspections. - Legal compliance: Ensuring the property meets local housing standards, fire safety requirements, and licensing obligations. - Financial reporting: Monthly income statements, annual tax reporting, and expense tracking.

Key clauses to negotiate: 1. Management fee structure — Typically 8-12% of monthly rent collected for residential properties. Some managers charge a flat fee instead. Clarify whether the fee is based on rent collected or rent due (if rent collected, the manager has incentive to chase arrears). 2. Leasing fee — A separate one-time fee for finding new tenants, typically 50-100% of one month's rent. Covers advertising, showings, and screening costs. 3. Maintenance authority — The spending limit the manager can authorise without owner approval (typically £200-£500 per repair). Emergency repairs should have a higher or no limit. 4. Scope of services — Define exactly what's included and what costs extra. Eviction proceedings, major renovations, and legal actions are usually excluded from the standard management fee. 5. Reserve fund — The manager may hold a reserve (typically 1-2 months' rent) for unexpected expenses. Define the initial amount and replenishment process. 6. Reporting — Frequency (monthly is standard), format, and detail level. The owner should receive income statements, expense reports, and maintenance logs. 7. Termination — Notice period (typically 60-90 days), grounds for immediate termination (fraud, negligence), and transition process for handing over tenant relationships and records. 8. Insurance — The manager should carry professional indemnity insurance and public liability insurance. Verify coverage amounts and ensure the owner is named as an additional insured.

Red flags when choosing a property manager: no written agreement offered, no professional indemnity insurance, unwillingness to provide references from current clients, and vague fee structures with hidden charges.