THIS PROPERTY MANAGEMENT CONTRACT is made and entered into on
by and between
("Manager"), having an address of
, and
("Owner") having an address of
.
RECITALS
WHEREAS, Manager is in the business of managing properties for owners and is willing to undertake the management of Owner's properties in accordance with the terms and conditions set forth herein;
WHEREAS, Owner desires to hire Manager to manage the following property(s) legally owned by Owner:
NOW, THEREFORE, in consideration of the premises and promises set forth herein and for other good and valuable consideration, intending to be legally bound, the parties hereto hereby agree as follows:
I. Definitions.
As used in this Agreement, the following terms have the following meanings:
Property. The property(s) listed above that are legally owned by the Owner and to which this Management Agreement applies.
Term of this Contract. The Term of this Contract shall be for two years and shall continue thereafter unless terminated in writing by one of the parties at least sixty (60) days prior to the expiration of the then current term.
In the event of a breach hereof by any party that is capable of remedy, such party shall be given written notice thereof and a ten calendar day period to cure such breach, a failure thereof justifying an immediate termination of this Contract. In the event of a breach hereof not capable of remedy, the non-breaching party shall be entitled to immediately cancel this Contract and the obligations hereunder without penalty. Each party shall be entitled to all remedies available under applicable law in the event of a breach hereof.
Renewal of Contract. The parties will have the option to renew or extend this Contract for a further term, commencing at the expiration of the original term, and on the same terms and conditions as provided for in this Contract. Any renewal will be set into force with a Management Renewal Addendum. The Management Renewal Addendum and this Contract will represent the entirety of the agreement between the Owner and Manager.
II. Authority and Power of Manager.
Owner hereby confers upon the Manager the following authority and power, all of which may be exercised in the name of the Owner by the Manager, subject to the expense approvals included in this Contract:
Employees and Independent Contractors. To hire, supervise and discharge any and all real estate brokers, attorneys, employees and independent contractors necessary for the operation, leasing, and maintenance of the Property, it being specifically agreed to and understood that all employees shall be deemed to be employees or subcontractors of the Manager and all Independent Contractors shall be deemed to be working on behalf of the Manager.
Leasing. To discharge real estate brokers working on behalf of the Manager to advertise the Property or any part thereof for rent in accordance with a budget supplied by Owner and to display signs thereon and to execute leases and lease renewals according to a rent schedule, terms and a lease approved in advance by Owner.
Termination of Tenancies. To serve tenants with appropriate notices on behalf of Owner; to terminate tenancies; and to institute legal proceedings with eviction lawyers in the Owner's name for purposes of recovering rents and other sums due and for possession of the Property.
Notices. To advise Owner promptly of the service upon Manager of any notice from any tenant or receipt of any notice, summons, subpoena or other legal document or other communication setting out or claiming an actual or alleged potential liability of the Owner. To serve tenants with appropriate notices on behalf of the Owner, including, but not limited to, late rent notices, utility arrearage notices, and notice of lease non-renewal.
Rent Collection. To keep oversee, record and enforce prompt rent deposits to landlord. Tenant(s) will deposit monthly rent directly into Owner's accounts using previously approved means by Owner including direct deposit and deliver receipt of prompt payment to Owner.
In-House Service. To perform any work needed to properly maintain the property.
Service Contracts. To execute contracts for utilities and services for the operation, maintenance, repair and safety of the Property as the Manager shall deem advisable.
Repairs. To oversee all repairs and alterations to the Property.
III. Duties of the Manager.
The Manager agrees to perform its duties in good faith and in the best interests of the Owner in accordance with the authority and powers granted to the Manager by the Owner as set forth above. Manager will carry out its duties in managing the Property as follows and as applicable as set forth above:
A. To advertise and show the Property.
B. To fully screen and evaluate prospective tenants by obtaining credit reports, tenant eviction and rental history, tenant criminal history, tenant employment history and the like, and to require a security deposit of the tenant that is equal to an amount no less than one month's rent for the Property. Owner shall have the right to object to any tenant to the extent permitted by applicable law.
C. To inspect the Property on a regular basis, but no less than once every three calendar months and, in connection therewith, shall advise Owner of issues with respect to the Property reasonably noticeable by the Manager, including, but not limited to, tenant-related damage, potential breaches of any lease agreement relating to the Property and reasonably necessary repairs and maintenance of the Property.
D. To assist the Owner in complying with all Federal, State and Local laws, codes and regulations affecting the Property.
E. To arrange for exterior painting, pavement repairs, roof repairs, gutter and downspout repairs, window well repairs, fence repair, plumbing repair, electric repair, sewer cleaning, and in general to provide for appropriate attention and service to all interior and exterior parts of the property and the utilities thereon.
F. To provide Owner with a monthly statement that itemizes all receipts, expenses, charges and accruals. Charges made to the Owner will be detailed in a monthly invoice.
G. To provide Owner with periodic reports, no more than every three calendar months, on the condition of the Property in addition to monthly financial statements.
H. To maintain books of accounts and records of the Owner and to permit the inspection and audit of such books and records by the Owner or any of its authorized representatives.
I. To use reasonable diligence to assure that contracts and agreements between the Owner and suppliers or servicemen are performed in accordance with their terms and to inform the Owner in the event performance is considered by Manager to be inadequate or contrary to the agreed terms.
J. To obtain Owner's prior authorization for any expense reasonably likely to be in excess of $200 or any series of expenses in any one calendar month likely to be in excess of $200 in the aggregate, except the following: (i) previously approved in writing monthly or recurring operating expenses, (ii) emergency repairs to protect the Property or a tenant; or (iii) necessary expenses if the Owner is not reasonably available for consultation. Notwithstanding anything to the contrary in the foregoing, including with respect to expenses likely to be less than $200, in all cases Manager shall take all steps reasonably necessary to mitigate costs and expenses to Owner, including, but not limited to, requiring tenant pay for such repairs resulting from its negligence and, when reasonable, shall advise any tenant on items of repair that a reasonable person under like circumstances could remedy without the need for the assistance of a third-party, including but not limited to, minor household repairs and maintenance issues.
K. To provide Owner with its best consultation and advice with respect to market and rental terms for the Property following its due diligence with respect thereto.
L. To notify Owner at least two months in advance of lease expirations with respect to the Property and help facilitate the renewal thereof on the terms provided therefor by the Owner.
M. To have reasonable systems in place to provide for the services of the Manager required hereunder in the case of Manager's temporary or permanent unavailability that shall not result in additional expenses to the Owner as compared to those that would have been applicable to Owner should Manager have been providing such services pursuant to this Contract.
N. To not assign the obligations under this Contract to any other person or entity absent the written consent of the Owner.
IV. Owner's Obligations and Duties.
The Owner covenants and agrees as follows:
A. To employ Manager as its exclusive agent to perform the property management services set forth herein during the Term of the Contract, provided, however, that such exclusivity shall terminate in the event the Property is not rented within 30 days of Owner's authorization to Manager to rent the Property.
B. To pay to Manager the following fees and expenses which Manager is authorized to charge to the Owner and which shall be deemed to compensate Manager in full for all services to be provided to Owner under this Contract. The Owner shall promptly pay the Manager any charges within 30 days of receipt of invoice:
1. Leasing fee not to exceed the amount of one month's rent for signing of a 12-month lease with a new tenant. Fee is to be paid to Manager within 30 days upon signing new tenant's Lease Agreement and Owner's receipt of security deposit. Payment of leasing fee for lease terms outside of a 12-month shall be negotiated between Manager and Owner. Manager shall not permit lease terms of less than 12-months absent the express written consent of Owner.
2. 10% of collected rent. The Manager and Owner acknowledge and agree that they are or expect to be in a property manager-owner relationship with respect to the Property and other properties of the Owner. In the event that Manager and Owner are parties to (i) three property management contracts, including this Contract, the fee provided in this paragraph shall be reduced to 8% of collected rent at the time such third contract is entered and thereafter; (ii) in the event that Manager and Owner are parties to four to nine property management contracts, including this Contract, the fee provided in this paragraph shall be reduced to 7% of collected rent at the time such fourth contract is entered and thereafter; and (iii) in the event that Manager and Owner are parties to ten or more property management contracts, including this Contract, the fee provided in this paragraph shall be reduced to 5% of collected rent at the time such tenth contract is entered and thereafter.
3. Any necessary, previously approved, or emergency property maintenance expenses and labor.
4. $100 lease renewal fee.
5. Notwithstanding anything to the contrary in the foregoing, in the event of an eviction reasonably resulting from the negligence of the Manager in the tenant selection process contemplated within six months of the start of any lease term, Manager shall refund to Owner all expenses previously paid hereunder within 30 calendar days thereof.
C. To provide Manager with such specific directions as Manager may reasonably require from time to time to guide Manager in the operation of the Property.
D. To carry a fire insurance policy in broad form on the Property.
E. To cooperate with Manager to the extent required to enable Manager to perform expeditiously, efficiently and economically the management services required under this Contract.
F. To make available to Manager all data, records and documents pertaining to the Property which the Manager may require to properly exercise its duties hereunder.
V. Representations, Warranties and Covenants.
The parties hereby represent, warrant and covenant in their own capacities as follows:
A. Power. Each of the parties has the legal power, right and authority to enter into this Contract and to consummate the transactions contemplated hereby.
B. Validity. This Contract and all documents required hereby to be executed by the parties are and shall be valid, legally binding obligations of and enforceable against each of the parties in accordance with their terms.
C. Conflicts. None of the execution and delivery of this Agreement and documents referenced herein, the incurrence of the obligations set forth herein, the consummation of the transactions herein contemplated or referenced herein conflicts with or results in the material breach of any terms, conditions or provisions of or constitutes a default under, any bond, note, or other evidence of indebtedness or any contract, lease or other agreements or instruments to which each of the parties is a party.
D. Litigation. No litigation has been served upon either of the parties, nor to the best of the Owner's knowledge has been filed, or threatened in writing, affecting the Property.
E. No Violations. Owner represents that the Property, as of the inception of this Contract and continuing forward, complies with all applicable building codes, laws and regulations.
F. Environmental Condition. Owner has no knowledge of any violation of Environmental Laws related to the Property or the presence or release (other than as permitted by law) of Hazardous Materials on or from the Property except as disclosed in the environmental reports delivered by Owner to Manager. The term "Environmental Laws" includes, without limitation, the Resource Conservation and Recovery Act and the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA") and other federal laws governing the environment as in effect on the date of this Contract together with their implementing regulations and guidelines as of the date of this Contract, and all state, regional, county, municipal and other local laws, regulations and ordinances that are equivalent or similar to the federal laws recited above or that purport to regulate Hazardous Materials in effect as of the date of this Agreement. "Hazardous Materials" means any substance which is (i) designated, defined, classified or regulated as a hazardous substance, hazardous material, hazardous waste, pollutant or contaminant under any Environmental Law, as currently in effect as of the date of this Contract, (ii) petroleum hydrocarbon, including crude oil or any fraction thereof and all petroleum products, (iii) PCBs, (iv) lead, (v) friable asbestos, (vi) flammable explosives, (vii) infectious materials, or (viii) radioactive materials.
VIII. Miscellaneous.
A. Entire Contract. This Contract constitutes the entire agreement of the parties hereto, and all prior agreements, understandings, representations and statements, oral or written, are hereby merged herein. In the event of a conflict between the terms of this Contract and any prior written agreements, the terms of this Contract shall prevail. This Contract may only be amended or modified by an instrument in writing, signed by the party intended to be bound thereby.
B. Time. All parties hereto agree that time is of the essence in this Contract. If the time for performance of any obligation hereunder shall fall on a Saturday, Sunday or holiday (national or in the state in which the Property is located) such that the transaction contemplated hereby cannot be performed, the time for performance shall be extended to the next such succeeding day where performance is possible.
C. Counterpart Execution. This Contract may be executed in one or more counterparts, each of which shall be deemed an original.
D. Governing Law. This Contract shall be deemed to be a contract made under the laws of
and for all purposes shall be governed by and interpreted in accordance with the laws of
.
E. Section Headings. The Section headings contained in this Contract are for convenience only and shall in no way enlarge or limit the scope or meaning of the various and several Sections hereof.
F. Severability. If any portion of this Contract is held to be unenforceable by a court of competent jurisdiction, the remainder of this Contract shall remain in full force and effect.
G. Waiver of Trial by Jury. Owner and Manager, to the extent they may legally do so, hereby expressly waive any right to trial by jury of any claim, demand, action, cause of action, or proceeding arising under or with respect to this Contract, or in any way connected with, or related to, or incidental to, the dealings of the parties hereto with respect to this Contract or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, and irrespective of whether sounding in contract, tort, or otherwise. To the extent they may legally do so, Owner and Manager hereby agree that any such claim, demand, action, cause of action, or proceeding shall be decided by a court trial without a jury and that any party hereto may file an original counterpart or a copy of this Section with any court as written evidence of the consent of the other party or parties hereto to waiver of its or their right to trial by jury.
H. No Waiver. No covenant, term or condition of this Contract other than as expressly set forth herein shall be deemed to have been waived by Owner or Manager unless such waiver is in writing and executed by Owner or Manager, as the case may be.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this contract to be made as of the day and year first above stated.