Real Estate Management Agreement

If you have a self storage facility or real property and appoint a management company or a manager to look after it you must enter into a real estate management agreement . Your relationship with the management company will be a contract that both of you will be responsible to honor. There are specific duties of both of you and it is not that only the managers will have to obey the words of the contract because they are the ones getting paid. Similarly you will also have to share the rights with the managers because as a landowner and appointing authority you will not always have all the rights. It is a balance of give and take and there are fine points laid down in the agreements that should guide both of your actions.

The agreement begins with the rights of the manager to take control of the property and take care of managing its leases, incomes and expenses, and the property physically in return of a fee. It should be accompanied by clear specifications of the rights and duties of the managers and the landowner. It should also specify the responsibilities of both the parties as well as the expectations from both. The other matter that must be included in the real estate management agreement is authorization and which of the activities can be called authorized activities. The limitations of expenses and the performance standards should also be agreed upon at the very beginning.

As an owner your responsibilities will begin with handing over all the necessary information and documents that will be needed for managing the property to the manager. This should include the existing rent and lease agreements, service and maintenance agreements, the insurance related papers, tax history, etc. you will also have to declare the hazards and in such cases might have to pay for workers compensation insurance before the manager begins his duties. Once you enter into the real estate management agreement , your manager will have the authorization to search for tenants, enter into agreements with them on your behalf, collect rents and incur the expenditure related to maintenance and also the financial duties like paying the fees, mortgages, etc.

Real estate management agreement can be elaborate or indicative, usually termed Long agreement and Short agreement. The short agreement is easy to go through and understand for the landowner, but it is suggested that the agreement should be done elaborately in the long form so that no problem arises out of misinterpretation of the generalized terms. The problem with the generalized agreements is that the points are not discussed elaborately, neither is there any clarification regarding the performance and expectations and this often have been found to be the bone of contention for both the manager and the owner. In cases of disagreement the prevalent interpretation reigns supreme. These are not new to the manager but the owner hardly knows them and feels cheated.

The long or the detailed real estate management agreement is much safer for both the property or storage owner and the manager. The detailed and elaborate description of the rights and duties, job specification and spelling out the expectations and standards can be easily interpreted in these agreements and in a way alerts the owner as to what and how much service he should get. The chance of any misunderstanding is reduced. It helps in strengthening of the manager-owner relationship and the customer service to tenants and for any property venture to succeed this is the most important target that should be set.

Tweet This Post 

Disclamer: This entry is intended to promote our partner StorageMart and some or all participants received compensation.

View Staff's Profile      Subscribe via RSS