What to Look for In a Property Management Contract
Note: This is designed to be a helpful overview of property management contracts, but keep in mind that I am not a lawyer and this does not constitute legal advice.
The contract you sign with a property management company should not be viewed as a mere formality, but rather the sole determiner of what services you or will not receive, what costs you will incur and what rights you will have in the relationship.
Choosing to not thoroughly read the contract is no different that choosing to not interview a property manager before you hire them. The contract is designed to eliminate confusion and create a clear mutual understanding of how the relationship will function in all foreseeable circumstances where a dispute could arise.
Don’t let positive impressions about the company’s professionalism and ethics make you less attentive when reviewing the actual terms of the contract.
The "fine print" may seem like a chore to read through, but not doing so can lead to misunderstandings about fees, the services that are included, the way tenants are treated and what you must do and/or owe in the event you want to end the relationship. Make sure to ask questions about anything that isn't crystal clear.
Also, don’t wait till the end of your search to ask for the contract; get a copy from each company early on while you are still talking to and interviewing multiple management companies. This way you get a clear picture of what each company is truly offering early on while you have a number of options available.
A Three Part Guide to Breaking Down Management Contracts
Most management contracts aren't exactly what you would call spellbinding. This guide is meant to cut through the legal jargon and help you see both what is in the contract and how it will affect your relationship with the management company.
Remember that nothing is set in stone and if you take issue with a certain point, feel free to ask about it and see if they are flexible. While hiring a lawyer to review the contract is not absolutely necessary, it is recommended if you feel unqualified or just want to make sure you aren't missing anything.
Part 1: Responsibilities and Representations (Coming Soon)
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