Question 1

What is a property management agreement?

Accepted Answer

A property management agreement is a contract between a property owner and a property manager that authorizes the manager to operate, maintain, and manage the owner’s property. The agreement typically covers: the manager’s authority (leasing, rent collection, maintenance, tenant relations), compensation (management fee, typically 4-10% of gross rental income for residential, 3-6% for commercial), term and termination (duration of the agreement and conditions for early termination), financial reporting (monthly statements, annual accounting), insurance requirements, and the manager’s responsibilities (marketing, tenant screening, lease administration, maintenance coordination, and compliance with Florida landlord-tenant law). In Florida, property managers who lease or rent real property for others must hold a valid Florida real estate license (Chapter 475).

Question 2

What should a Florida property management agreement include?

Accepted Answer

Essential provisions: scope of authority (what the manager can and cannot do without owner approval; specific dollar thresholds for expenditures), compensation structure (management fee percentage, leasing commissions, maintenance markups, late fee retention), tenant screening criteria (credit score, income requirements, background checks), maintenance and repair authority (emergency spending limits, preferred vendors, competitive bidding requirements), financial controls (separate trust account for owner funds, monthly reporting, annual audit rights), termination provisions (notice period, typically 30-90 days, transition requirements), and indemnification (allocation of liability between the owner and manager). The agreement should comply with Chapter 475 requirements for real estate licensees.

Question 3

What are common disputes in Florida property management?

Accepted Answer

Common disputes: unauthorized expenditures (the manager spent money without the owner’s approval), commingling of funds (the manager failed to keep owner funds separate from the manager’s operating funds, violating Section 475.25), failure to maintain the property (the manager neglected maintenance, resulting in property damage or code violations), failure to screen tenants properly (the manager rented to unqualified tenants, leading to non-payment or property damage), inaccurate financial reporting (the manager’s reports do not match actual income and expenses), and unauthorized lease terms (the manager entered into leases with terms the owner did not approve). Property owners should review reports regularly and audit the manager’s performance.

Management Agreement: Property

Property Management Agreements

Key Provisions

Florida Requirements

Common Disputes

Related Terms

Barnes Walker Real Estate

Ready to Get Started?