Property Management Agreement (Commercial)

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This Property Management Agreement is for use by a property owner who wants to engage a manager to operate and manage commercial properties on a day-to-day basis. This form sets out the details of the management arrangement and can be easily tailored to fit your unique situation.

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This Property Management Agreement (Commercial) is between a property owner and a manager who will operate and manage one or more commercial properties. This management arrangement is helpful for out-of-state or rental property owners or an individual who is no longer able to manage their commercial property. This management agreement sets out the specific services the property manager will perform, the continuing responsibilities of the owner and the compensation the property manager will be paid. It is important that this business arrangement be clearly set out in writing. A written Property Management Agreement will prove valuable in the event there are disagreements or miscommunications regarding the management of an owner's commercial property.

This Property Management Agreement (Commercial Property) contains the following provisions:
  • Parties/Date: Sets forth the name and address of the commercial property owner, property manager and the date the agreement is signed;
  • Appointment/Owners Obligations: The property owner appoints manager as his/her sole and exclusive agent and agrees to provide the manager with all the necessary tools in order to effectively manage the commercial property;
  • Authority of Broker: Sets out in specific detail the services the property manager will provide including management responsibilities, leasing authority, maintenance of accurate records and holding of security deposits;
  • Broker Fees: Sets out in specific detail the fees the owner will pay to property manager including management, leasing, renewal or extension, service, administrative and reimbursement fees;
  • Term and Termination: Sets out the specific commencement date and options under which either party may terminate this agreement;
  • Expenses: Property manager agrees to bear all reasonable out-of-pocket expenses which may include fees for attorneys and other professionals;
  • Dispute Resolution: Disputes under this management agreement will be settled by the American Arbitration Association;
  • Signature: Both commercial property owner and property manager must sign the management agreement.

Protect yourself, your rights and your property by purchasing this attorney-prepared form.

This attorney-prepared package includes:
  1. General Information
  2. Instructions and Checklist
  3. Property Management Agreement (Commercial Property)
State Law Compliance: This form complies with the laws of all states
Number of Pages13
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#43439
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.














Property Management Agreement
(Commercial Property)








This Packet Includes:
1.  General Information
2.  Instructions and Checklist
3.  Property Management Agreement (Commercial Property)





General Information
Property Management Agreement
(Commercial Property)

This Property Management Agreement is for use when a property owner desires to engage a manager to operate and manage a commercial piece of property.  These agreements are extremely useful to individuals who own rental properties and want to hire a manager to oversee these properties, an out-of-state property owner or an owner who is no longer able to manage the property.  

The property manager will act as the owners exclusive agent and representative.  His or her duties may include collection of rents, paying expenses and taxes, maintaining the property according to the owners standards, supervising all independent contractors, rent or leasing the property and rendering emergency repairs when warranted.  The Owner agrees not to deal or negotiate with any prospective tenants or to enter into any management agreement with another property manager.  The Owner also agrees to provide property manager with copies of all property warranties and keys and access devices to the property.  

It is imperative that a Commercial Property Management Agreement be memorialized in writing rather than via an oral agreement.  A written agreement will be useful in the event of disagreements or misunderstandings between the property owner and the property manager.   





Instructions and Checklist
Property Management Agreement
(Commercial Property)



   The parties should read the agreement carefully.

   Insert all requested information in the spaces provided on the form.

     This form contains the basic terms and language that should be included in similar agreements.  

   Read the “Property Management” and “Owner Responsibility” provisions carefully.  If there are disagreements, they will likely focus on one of these provisions.  

    This agreement includes an arbitration provision.  If you would prefer to settle your disputes through the court system, simply remove this provision and renumber if applicable.

     Both the Commercial Property Owner and Property Manager must sign the Agreement.

   Both parties should retain either an original or copy of the signed agreement.

   All legal documents should be kept in a safe location such as a fireproof safe or safe deposit box.  











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COMMERCIAL PROPERTY MANAGEMENT AGREEMENT

THIS COMMERCIAL PROPERTY MANAGEMENT AGREEMENT (the "Agreement") is made as of this [date] day of [month], 2011 (the "Agreement Date") by and among

[name], of [address] (the "Owner"), and

[name], a [address] corporation (the "Broker")

RECITALS
 
WHEREAS, Owner is the lawful owner of the Commercial Property, whose description is stated in Schedule 1-Property Description; and

WHEREAS, Owner desires to appoint an agent for management of Commercial Property and for collection of rent deriving from Property, and Broker has shown its interest to be appointed as such agent and Owner has agreed to appoint the Broker as its sole agent from the aforesaid purpose, on the terms and conditions mentioned herein below;

Now, therefore, the Parties agree as follows:

1.   APPOINTMENT & OWNERS OBLIGATIONS

1.1   Owner hereby appoints Broker as Owners sole and exclusive agent of the real property described in Schedule 1-Property Description to: (a) manage the Property; and (b) lease the Property. 

1.2   Owner agrees to cooperate with Broker to facilitate the management of the Property. Owner further agrees that Owner shall: (a) not deal with or negotiate with any tenant in the Property concerning any matter related to the management of the Property but refer all such dealings to Broker; (b) not enter into a management agreement with another broker for the management of the Property to become effective during this agreement; (c) provide Broker with copies of any existing leases or rental agreements related to the Property; (d) provide Broker with keys and access devices to the Property; (e) provide Broker with copies of all warranties related to the Property or any item in the Property; (f) complete any disclosures or notices required by law or a lease of the Property; and (g) amend applicable notices and disclosures if a material change occurs during the validity of this Agreement.
1.3   Owner further agrees to (a) cooperate with Broker to facilitate the showing, marketing, and lease of the Property; (b) not rent or lease the Property to anyone without Brokers prior written approval; (c) not negotiate with any prospective tenant who might contact Owner directly, but refer all prospective tenants to Broker; (d) not deal with or negotiate with any tenant in the Property concerning any matter related to the leasing of the Property but refer all such dealings to Broker; and (e) not enter into a listing agreement with another broker for the rental or leasing of the Property to become effective during this agreement.
2.   AUTHORITY OF BROKER

2.1   Management Authority: Owner grants to Broker the following authority, which Broker shall exercise ensuring Owners interest:

a.   collect and deposit for Owner rents (including other charges, viz., returned check charges and late charges) from tenants in the Property in a trust account;
b.   collect and deposit security deposits from tenants in: (a) a trust account separate from the account described under Section 2.1 (a);  (b) pay from the account described under Section 2.1 (a) expenses to operate the Property, including but not limited to, maintenance, taxes, insurance, utilities, repairs, security, management fees, leasing fees, and expenses authorized under this agreement; (c) hire Brokers to renovate, remodel, or redecorate the Property provided that Broker does not exceed the expense beyond the limit of $___ and takes prior approval from Owner for such renovation, remodel, or redecoration; (d) terminate leases for the Property, negotiate lease terminations, and serve notices of termination; (e) institute and prosecute, at Owners expense, actions to evict tenants in the Property or recover possession of the Property; (e) settle, compromise, or withdraw any such action; (f) report payment from tenants in the Property to consumer reporting agencies; (g) authorize inspectors, appraisers, Brokers, and other brokers and their associates to access the Property at reasonable times for purposes contemplated by this Agreement and to lend keys and disclose security codes to such persons to enter the Property; and (h) perform other necessary services related to the management of the Property.

2.3   Leasing Authority: Owner hereby grants to Broker the following authority which Broker shall exercise ensuring Owners interest:

a.   advertise the Property for lease by means and methods that are reasonably competitive;
b.   place For Lease signs or other signs on the Property in accordance with applicable laws, regulations, ordinances, restrictions, and owners association rules;
c.   remove all other signs offering the Property for sale or lease;
d.   authorize other brokers, their associates, and their clients to access the Property at reasonable times and to lend keys and disclose security codes to such persons to enter the Property;
e.   verify information and references in rental applications from prospective tenants;
f.   negotiate and execute leases on Owners behalf for the Property at market rates and on competitively reasonable terms for initial terms of not less than ___ months and not more than ___ months;
g.   negotiate and execute any amendments, extensions, or renewals to any leases for the Property on Owners behalf;
h.   collect application fees from prospective tenants; and
i.   perform other necessary services related to the leasing of the Property.

2.4   Record Keeping: Broker will:
a.   maintain accurate records related to the Property and retain such records for not less than 4 years;
b.   file reports with the Internal Revenue Service which Broker may be required to file concerning funds received on behalf of Owner under this agreement (for example, Form 1099);
c.   send to Owner each quarter  month a statement of receipts, disbursements, and charges; and
d.   remit to Owner the funds collected by Broker for Owner under this agreement, less authorized deductions on a  quarterly  monthly basis.

2.5   Security Deposits: (1) Broker will:

a.   maintain security deposits received from tenants in the trust account described under Section 2.1 (a); and
b.   in accordance with applicable law and the leases for the Property, account to the tenants for the security deposits, make lawful deductions from the security deposits, and return the security deposit balances to the tenants from the trust account.

Upon termination or expiry of this Agreement, Broker will deliver to Owner the security deposits held by Broker under leases of the Property, less deductions authorized by this Agreement, and will send written notices to the tenants stating: (a) that this Agreement has terminated/ expired; (b) the contact information for the Owner; and (c) that Owner is responsible for accounting for and returning the tenants security deposit.

3.   BROKER FEES 

   Owner shall pay the following fees to Broker:

3.1   Management Fees: Every month, Owner will pay Broker the greater of __% of the gross monthly rents collected in a month.  

3.2   Leasing Fees for New Tenancies: Each time the Property is leased to a new tenant, Owner will pay Broker a leasing fee equal to: __ % of the gross rents to be paid under the lease.

3.3   Renewal or Extension Fees: Each time a tenant in the Property renews or extends a lease, Owner will pay Broker a renewal or extension fee equal to: ___ % of the gross rents to be paid under the renewal or extension.

3.4   Service Fees: Each time Broker arranges for the Property to be repaired, maintained, redecorated, or altered as permitted by this agreement, Owner will pay Broker a service fee equal to: __ % of the total cost of each repair, maintenance, alteration, or redecoration.  

3.5   Administrative Fees: If Broker collects administrative charges from tenants or prospective tenants, including but not limited to, application fees, returned check fees, or late charges, Broker will retain such fees as compensation under this Agreement.

3.6   Reimbursement Fees. Upon Owners receipt of Brokers invoice, Owner will reimburse Broker the following expenses that are related to the leasing or management of the Property: (a) copy charges; (b) charges for communication expenses; (c) notary fees; (d) reasonable travel expenses, including but not limited to mileage reimbursement (at the standard mileage rate published by the IRS), parking expenses, and tolls; and (e) any other expenditures Broker is authorized to make under this Agreement for Owner or that Owner otherwise authorizes Broker to make for Owner.

4.   INSURANCE

4.1   Broker shall keep in force during progress of the management of the Property, and shall furnish to Owner, upon Owners request, copies of the following insurance policies:

a.   Brokers Risk Insurance in the amount of the Contract Price (including any costs incurred due to change in Scope of Work), naming Owner as loss payee;
b.   Statutory Workers Compensation Insurance for Brokers employees; and
c.   Comprehensive General Liability Insurance with limits of $__________ per person, per occurrence for personal injury, ($__________ aggregate), with $___________ coverage for completed operations.

5.   WARRANTY & INDEMNITY

5.1   In relation to any work carried out by Broker in terms of Clause 3.3, Broker warrants the quality of all materials and workmanship for a period of five years. Any defects in the materials or workmanship will be repaired or replaced at no cost to Owner.

5.2   Broker shall defend, indemnify and hold harmless Owner against all claims, liabilities, expenses, costs, loss or damage of whatsoever nature (including legal costs on a full indemnity basis incurred by Owner) brought against, suffered or incurred by Owner, and defend any suit brought against Owner, arising out of or in connection with this Agreement, including without prejudice to the generality of the foregoing:
   
a.   Any breach of the terms and conditions of this Agreement by the Broker;
b.   Any act, omission, fraud and negligence or default whatsoever of sub-Brokers, employees or agents employed by Broker to perform its obligations hereunder;
c.   Any wrongful, incorrect, dishonest, criminal, fraudulent or negligent work, misfeasance, bad faith, disregard of its duties and obligations hereunder, service, act or omission of /by Broker or any of its personnel.

5.3   Indemnification For Losses Sustained During Management of the Property. Because of potential safety and health hazards present during management of the Property that may arise from repair activities, the Parties agree as follows:

a.   Personal Safety. To ensure and to protect the personal health and safety of Owner and Owners licensees and invitees, Broker shall restrict entry of any unauthorized personnel onto the Property. When Owner chooses to enter the Property, and irrespective of Brokers presence on the Property at such time, Broker agrees to release and/or indemnify and hold Owner harmless from and against any and all claims, demands or causes of action arising in favor of Broker or Brokers licensees and invitees on account of bodily injury, death or damage to or loss of property in any way occurring or incident to the condition of the property.

b.   Losses And Damage Related To Management of the Property. During the management of the Property, Broker shall indemnify the Owner as provided herein from losses and damages that may occur incident to or affect the management of the Property, but not as to any such loss or damage caused in whole or in part by the negligence of those employed by or contracting with the Owner. Broker agrees, during the management of the Property to indemnify and save Owner harmless from (i) any and all liens, contract damages, suits, claims and causes of action related to management of the Property; and (ii) any suits, claims and causes of action for damages to property or personal injury to or death of Brokers employees, agents, representatives and independent Brokers (and their employees) associated with performance of the management of the Property by the Broker.

6.   TERM & TERMINATION

6.1   Term. This Agreement shall commence from the Commencement Date specified in Schedule 1, and continue for a period of ___ years, unless terminated earlier by the Owner.

6.2   Termination. Owner shall have the option to terminate this Agreement, 

a.   In the event that the Broker fails to complete any part of the work on the deadlines agreed with Owner, and as agreed in Schedule 1;
b.   In the event that the Broker is in material breach of any of its covenants under this Agreement and where capable of remedy, fails to remedy such breach within fifteen (15) days of being notified by Owner to remedy the breach.

6.3   Without prejudice to any other rights or remedies it may have, Owner shall have the right at any time to terminate the Agreement forthwith by serving a written notice of termination on  Broker:

a.   Broker becomes insolvent or ceases to trade or enters into any composition with its creditors; or
b.   A bankruptcy order is made against Broker; or
c.   A Receiver or an Administrative Receiver is appointed in respect of any of Broker's assets; or
d.   An order to wind up Brokers business is made or a Liquidator is appointed in respect of Broker (otherwise than for the purposes of reconstruction or amalgamation).
e.   If Broker is prevented from providing the services by any court, other judicial, quasi-judicial, governmental orders, for any reasons attributable to Broker.

6.4   Effect of Termination. Notwithstanding any other rights and remedies provided elsewhere in the Agreement, on termination of this Agreement with effect from the effective date of termination and thereafter:

a.   Neither Party will represent the other Party in any of its dealings.
b.   The expiration or termination of this Agreement for any reason whatsoever shall not affect any obligation of either Party having accrued under the Agreement prior to the expiration or termination of this Agreement and such expiration or termination shall be without prejudice to any liabilities of either Party to the other Party existing at the date of expiration or termination of this Agreement.
c.   If Broker receives any funds on behalf of Owner after this Agreement ends (for example, rent, damages, past due amounts, and others), Broker will deposit those funds in Brokers trust account and will pay such funds received to Broker. This provision survives termination of this agreement.

7.   EXPENSES

7.1   Broker agrees to bear all reasonable out-of-pocket expenses and costs (including reasonable attorney and other professional fees and expenses) incurred in connection with the transactions contemplated by Agreement.

8.   MISCELLANEOUS  

8.1   Waiver. Any term or provision of this Agreement may be waived at any time by the party entitled to the benefit thereof by a written instrument executed by such party.
 
8.2    Notices. Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted hereunder shall be in writing and shall be deemed given only if delivered personally (to the attention of the person identified) to the address of such person maintained on the book and records of the party sending the notice, or sent by telecopy, telegram or by certified mail, postage prepaid, or to such other address as the addressee may have specified in a notice duly given to the sender as provided herein. Such notice, request, demand, waiver, consent, approval or other communication will be deemed to have been given as of the date so delivered or telegraphed or, if mailed, three business days after the date so mailed.
 
8.3    Governing Law. This Agreement shall be governed by, and interpreted and enforced in accordance with, the substantive laws of the State of _____________________.

8.4   No Benefit to Others. The representations, warranties, covenants and agreements contained in this Agreement are for the sole benefit of the parties hereto and their executors, legal representatives, successors and assigns, and they shall not be construed as conferring and are not intended to confer any rights on any other persons.

8.5   Contents of Agreement. This Agreement together with any documents referred to herein set forth the entire agreement of the parties hereto and supersede any prior agreement or understanding of the parties with respect to the transactions contemplated hereby. This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto, and no claimed amendment, modification, termination or waiver shall be binding unless in writing and signed by the party against whom or which such claimed amendment, modification, termination or waiver is sought to be enforced.

8.6   Severability. Any provision of this Agreement which is invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

8.7   Counterparts. This Agreement may be executed in any number of counterparts, which when taken together, shall constitute but one and the same instrument. Any and all counterparts may be executed by facsimile.

9.   DISPUTE RESOLUTION AND ARBITRATION

9.1   The Parties agree to negotiate in good faith to resolve any dispute between them arising out of, under or in connection with this Agreement. In the event the negotiations do not resolve the dispute to the reasonable satisfaction of the Parties, then each Party shall nominate a person of respectable professional standing and unimpeachable conduct as its representative.  These representatives shall, within thirty (30) days of a written request by any Party to call such a meeting, meet in person and shall attempt in good faith to resolve the dispute.

9.2   Upon the Parties being unable to appoint the representatives as aforesaid, or if the disputes cannot be resolved by such representatives in such meeting as aforesaid, then in such an event, the disputes or differences shall be submitted to final and binding arbitration at the request of either Party upon written notice to that effect to the other Party. In the event of such arbitration:

a.   Such arbitration shall be in accordance with the rules of American Arbitration Association (or any amendment thereof) (which are deemed to be incorporated in this Agreement by reference). All proceedings of such arbitration shall be in the English language.  The venue of arbitration shall be _______.
b.   The arbitration panel shall consist of three arbitrators, one arbitrator to be appointed by each of the Parties and the third arbitrator to be appointed by two arbitrators so appointed.
c.   Arbitration awards rendered shall be final and binding and.  The losing Party, as determined by arbitrators, shall pay all reasonable out-of-pocket expenses (including, without limitation, reasonable attorneys fees) incurred by the prevailing Party, as determined by the arbitrators, in connection with any dispute unless the arbitrators direct otherwise.
d.   Nothing shall preclude a Party from seeking interim or permanent equitable or injunctive relief, or both, from any court having jurisdiction to grant the same. The pursuit of equitable or injunctive relief shall not be a waiver of the duty of the Parties to pursue any remedy for actual monetary damages through the arbitration described in this Section.

IN WITNESS WHEREOF, each Party hereto has signed, or caused to be signed by its officer thereunto duly authorized, this Agreement as of the date first above written.

Owner
               
Name:            _____
Title:               

Broker
               
Name:               
Title:               
SCHEDULE 1
COMMERCIAL PROPERTY DESCRIPTION

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