Spencer Sutton - Thursday, May 24, 2018
A Chattanooga property management contract will cover many issues from fees to liability to pets and termination.
Most of the owners who get in touch with us are interested to see our Chattanooga property management contract. We share it with them and give them an opportunity to read through it from start to finish.
In this article, we wanted to share the main aspects of a Chattanooga property management contract to help you make sense of some of the legal jargon. We will not cover every nuance that may be in a management agreement you see. We will only cover the main aspects.
You will also learn what you should expect, no matter what property manager in Chattanooga you use!
Don’t expect a thorough and detailed list of contract items, but the main highlights.
The Basics Of A Chattanooga Property Management Contract
The most basic elements of the management agreement include the date, name of the client or entity, and the property address of the home to be managed.
After these formalities, the agreement picks up steam.
1. Leasing Authority
This section of the property management contract is mostly centered around the property managers authority when leasing your home.
- Term – This will be the beginning date of the contract and will usually last for one year. Some companies will let you cancel with a 30-day notice, and some may attempt to hold you to that term. Make sure you are comfortable with the term before signing.
- Owner Representations and Disclosures – This portion of the contract states that the owner will disclose any known defects to the property manager. This ensures that the property manager is presenting all of the correct information to the tenant when leasing the home. The disclosure would include any lead-based paint, delinquent payments, or unpaid taxes.
- Marketing – In this section, you are giving the property management company the right to market your home for lease to find a tenant. The agreement will also give your property management company permission to hang a lockbox on the house.
- Security Deposit – This states that your property manager will charge a security deposit to the tenant and hold it in a separate account. Once the tenant moves out, your manager will be responsible for returning that deposit to the tenant minus any tenant-related damage caused to the home.
- Agent Duties – In this section of the contract, the owner gives the agent the ability to perform the following leasing activities:
- Advertise the property
- Show the property
- Process applications
- Provide a lease to the tenant
2. Management Authority
This section of your Chattanooga property management contract moves from the leasing and marketing aspect to the day-to-day management of the property.
Here is each duty from our Chattanooga property management contract:
a. Collection of rent – We will take all reasonable steps to collect rent from the tenant
b. Expenses and mortgage – We will pay all costs incurred while managing your property and the owner be responsible for paying anything like the mortgage, taxes, HOA dues, and insurance premiums
c. Inspection and repairs – The owner is responsible for paying for repairs, and we will be responsible for supervising and managing any repairs
d. Negotiation of leases – We retain exclusive right to negotiate leases on the owner’s behalf
e. Independent contractors – We can hire or fire contractors while managing the property
f. Tenants – We will handle all tenant requests
g. Records – We will keep an accurate record of any money received or paid out on the owner’s behalf
h. Payment of owner – We will pay the owner after all expenses settle for managing the property
There are other terms that we explain underneath the ‘management authority‘ of our contract.
- Insurance – We require every owner to carry liability and hazard insurance
- Financial Responsibility of Owner – This portion of the contract covers the responsibility of the owner to pay for any expenses that are incurred by the property manager. Usually, the management agreement will have wording about non-payment and any penalties for non-payment.
- Habitability – The owner agrees that the property is safe and can be lived in by a tenant. Also, the home must comply with all state and local ordinances.
- Agent Compensation – This section of your Chattanooga property management contract will explain any fees that they are going to charge. These fees can be management fees, tenant fees, maintenance fees, contractor fees, and any miscellaneous fees that might come up while managing your property.
This is the part of the Chattanooga Property Manager contract where you promise to hold the property manager harmless for anything that happens while they are managing the property.
This indemnity can include lack of performance or bodily harm. It is standard for most any management agreement.
In return, the property manager also agrees to hold you, the owner, harmless.
This section of the agreement will describe the termination policy of the management company. In the case of our management company, gkhouses, we have a 30 day written notice termination policy.
The reason we ask for 30 days is so that we can settle accounts and make sure we prepare any documents you may need to either self-manage or send it to another property manager.
Some Chattanooga property managers may have a cancellation penalty if it terminates before the 12-month contract date. We have a 100% Happiness Guarantee that gives the owner the opportunity to cancel at any time for any reason without penalty.
It is important for you not only to understand the property management contract before you sign, but you need to feel comfortable. Every contract is going to include some give and take. What is important is that you believe what is being asked of you by the Chattanooga property manager is fair and reasonable.
As your agent, a good property manager wants to represent you and provide you with valuable service.
We hope that this article has been helpful in explaining parts of a Chattanooga Property Management Contract.
If you would like to see our actual management agreement or speak to someone about managing your property, please give us a call at (423) 648-7368.