Investor-friendly Property Management agreement

alexmaz

New Forum Member
REIN Member
Just curious how investor-friendly Property Management agreement would look like ?

I`ve got a draft agreement from my Property Manager and not sure if it favours too much the Manager. It`s got the following clauses that I`m concerned the most :

1. The Agent shall use his best efforts to rent, manage and operate the property in such manner as to produce the maximum possible net rental income from the property consistent with good real estate management and operating practices.

2. The Owner appoints the Agent as his legal agent to commence any type of legal action for the collection of rent or other income from the property or the evicting of tenants or other persons from the property or such other legal actions as may be necessary for the good management of the property and the Owner agrees to pay all expenses incurred by the Agent or on his behalf including the cost of legal fees and disbursements.

3. The Owner agrees to indemnify and save harmless the Agent and his employees from any costs or judgments incurred as a result of any legal actions or other proceedings taken against the Agent or his employees for actions taken by the Agent or his employees in the execution of their obligations under this Agreement. This indemnification by the Owner does not apply to any responsibility the Agent or his employees may have for gross negligence or willful misconduct.



Thank you in advance for all comments,
Alex
 

housingrental

Frequent Forum Member
Registered
As a property manager I use like clauses. An alternative of taking on potentially unlimited liability for a few hundred dollars a month is not particularly desireable.

For further landlord protection a reasonable change might be for clause 1 that the rental rates are to be approved by the owner, and for clause 2 that the owner approve any legal expenses.



QUOTE (alexmaz @ May 27 2008, 05:54 PM) Just curious how investor-friendly Property Management agreement would look like ?

I`ve got a draft agreement from my Property Manager and not sure if it favours too much the Manager. It`s got the following clauses that I`m concerned the most :

1. The Agent shall use his best efforts to rent, manage and operate the property in such manner as to produce the maximum possible net rental income from the property consistent with good real estate management and operating practices.

2. The Owner appoints the Agent as his legal agent to commence any type of legal action for the collection of rent or other income from the property or the evicting of tenants or other persons from the property or such other legal actions as may be necessary for the good management of the property and the Owner agrees to pay all expenses incurred by the Agent or on his behalf including the cost of legal fees and disbursements.

3. The Owner agrees to indemnify and save harmless the Agent and his employees from any costs or judgments incurred as a result of any legal actions or other proceedings taken against the Agent or his employees for actions taken by the Agent or his employees in the execution of their obligations under this Agreement. This indemnification by the Owner does not apply to any responsibility the Agent or his employees may have for gross negligence or willful misconduct.



Thank you in advance for all comments,
Alex
 

KenBoutilier

New Forum Member
Registered
As a property managers we too have similar clauses in our agreement. As an investor I would agree you should have approval of all rental rates and legal expenses. We have a clause that all expenses above $200 must be approved by the property owner.

Regards,
 

brentdavies

Inspired Forum Member
Registered
Our property management agreements are similar, but there is not "standard" agreement similar to the real sales contracts.

Rental rates, and tenant selection is up to the Property Manager, acting as your agent. Some owners take an active interest in this area, and many do not.

Hold harmless clauses are very common. Legal costs typically arise for 2 different reasons, tenant issues ( Evictions,small claims), and the other is general liability suits such as a slip & falls.
 
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