What should be included in a property management agreement?

A comprehensive U.S. agreement should include the names and contact information of both parties, the property address and description, the fee structure and payment schedule, specific American manager duties, spending authority limits, insurance requirements, financial reporting frequency, termination notice periods and grounds for cause, transition procedures, indemnification clauses, dispute resolution methods, and the governing state law.

How much do property managers typically charge?

U.S. property management fees vary by market, property type, and scope of services. Common American structures include a percentage of monthly rent collected (typically 6% to 12%), a flat monthly fee, or a hybrid combining a base fee with a percentage. Many managers also charge a one-time tenant placement fee for finding and screening new tenants. Additional fees may apply for lease renewals, eviction coordination, or major maintenance oversight.

Do property managers need a license?

Licensing requirements vary by U.S. state. Many American states require a real estate broker's license or a specific property management license. Some states allow unlicensed management under certain conditions, such as managing one's own property or working directly under a licensed broker. Always verify your U.S. state's requirements before entering a management agreement to ensure full regulatory compliance.

Can a property management agreement be terminated early?

Yes, most U.S. agreements include provisions for early termination. Either American party can typically terminate without cause by providing written notice, commonly 30 to 90 days in advance. Agreements may also allow immediate termination for cause in cases of material breach, fraud, or gross negligence. Some contracts include an early termination fee to compensate the non-terminating party for the unexpired portion of the contract term.

What is a spending authority limit?

A U.S. spending authority limit is the maximum amount a property manager can spend on a single repair or expense without obtaining prior written approval from the owner. This protects the American owner from unauthorized large expenditures while giving the manager flexibility to handle routine maintenance. Common limits range from $250 to $1,000 per occurrence. Emergency provisions often allow higher spending when tenant safety or property integrity is at immediate risk.

What happens when a property management agreement expires?

When a fixed-term U.S. agreement expires, it typically either terminates or automatically renews on a month-to-month basis, depending on the contract terms. If the American agreement ends, the manager must complete a transition process that includes providing final financial statements, transferring security deposits and reserve funds, delivering all keys and access codes, handing over current lease agreements, and providing a current rent roll with tenant contact information.

Is a property management agreement legally binding?

Yes, a properly executed property management agreement is a legally binding contract under U.S. law. Once both parties sign, it creates enforceable obligations for the American property owner and the manager alike. The agreement can be enforced in court if either party fails to meet their contractual obligations. To ensure enforceability, the agreement should be in writing, signed by both parties, and comply with all applicable U.S. state property management laws and licensing regulations.

Rental & Real EstateUnited States

Free Property Management Agreement Template

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PROPERTY MANAGEMENT AGREEMENT

Exclusive Property Management Services Agreement

OWNER

Greenfield Properties, LLC

4500 Lakewood Drive, Suite 200, Dallas, TX 75201, (214) 555-0318, info@greenfieldproperties.com

MANAGER

Elite Property Management, Inc.

1200 Commerce Street, Suite 450, Dallas, TX 75202, (214) 555-0742, management@eliteproperty.com, License: PM-TX-2026-04892

Multi-Family Residential – 24 unit(s)

Fee: 8% of gross rent | Term: one (1) year

This Property Management Agreement (this "Agreement") is entered into as of April 1, 2026 by and between Greenfield Properties, LLC ("Owner") and Elite Property Management, Inc. ("Manager"). Owner and Manager may be referred to individually as a "Party" and collectively as the "Parties." The parties agree as follows:

PROPERTY

Owner hereby engages Manager to manage the following real property ("Property"):

Address: 8750 Ridgewood Apartments, Dallas, TX 75231
Type: Multi-Family Residential
Total Units: 24
Currently Occupied: 21

Property Description: Three-story apartment complex with 24 units (12 one-bedroom, 8 two-bedroom, 4 three-bedroom), gated parking lot with 36 spaces, on-site laundry facility, community courtyard

APPOINTMENT, LICENSING, AND TERM

Owner hereby appoints Manager as the exclusive property manager for the Property described herein. Manager accepts such appointment and agrees to manage the Property in accordance with the terms and conditions of this Agreement and with all applicable federal, state, and local laws. Manager represents and warrants that, where the Property is located in a jurisdiction requiring a real-estate broker, property-manager, or equivalent license for the services contemplated herein — including, without limitation, California Business and Professions Code §§ 10131, 10131.01, and 10131.6 (California); New York Real Property Law §§ 440 and 441 and implementing regulations (New York); Florida Statutes §§ 475.01 and 475.42 (Florida); and Texas Occupations Code § 1101.002 (Texas) — Manager and its qualifying broker or designated officer hold, and shall maintain in good standing for the entire term of this Agreement, all licenses, bonds, trust-account registrations, and continuing-education credits required by the applicable state commission or regulatory authority. Manager shall promptly notify Owner in writing of any suspension, revocation, surrender, or material change in the status of any such license.

Manager owes Owner the fiduciary duties of a real-estate agent, including loyalty, care, obedience to lawful instructions, full disclosure, confidentiality, and the duty to account for funds, consistent with Restatement (Third) of Agency §§ 8.01–8.15 (in particular § 8.14, duty to use reasonable effort and care).

This Agreement shall commence on April 1, 2026 and shall continue for a term of one (1) year, unless earlier terminated in accordance with the termination provisions of this Agreement. Upon expiration of the initial term, this Agreement shall automatically renew on a month-to-month basis unless either Party provides written notice of non-renewal at least thirty (30) days prior to the expiration of the then-current term.

MANAGEMENT FEE AND COMPENSATION

In consideration for the management services provided under this Agreement, Owner shall compensate Manager as follows. The Parties acknowledge that no portion of the compensation set forth in this Section constitutes a fee, kickback, or thing of value exchanged for the referral of real-estate settlement services in violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2607 (RESPA), or any implementing regulation under 12 C.F.R. Part 1024.

Management Fee: 8% of the monthly gross rent actually collected from the Property.

Payment Schedule: Management fees shall be deducted by Manager from collected rents on a monthly basis before disbursement of remaining funds to Owner.

Tenant Placement Fee: Manager shall receive a one-time fee of 750.00 USD for each new tenant placed in the Property, payable upon execution of a new lease agreement.

Late Fee Revenue: Manager shall retain 50% of all late fees collected from tenants as additional compensation. The remaining balance shall be credited to Owner.

Manager shall maintain accurate records of all income and expenses related to the Property and shall provide Owner with a detailed accounting statement monthly.

INDEPENDENT CONTRACTOR

Manager is an independent contractor and nothing in this Agreement shall be construed to create a partnership, joint venture, agency, or employment relationship between Owner and Manager. Manager shall have sole control over the methods and means of performing the management services, subject to the terms of this Agreement.

MANAGER DUTIES, FAIR HOUSING, AND REGULATORY COMPLIANCE

Manager shall perform the following duties and responsibilities in connection with the management of the Property:

Tenant screening, background checks, and credit verification
Rent collection, deposit handling, and late fee enforcement
Maintenance coordination, vendor management, and emergency repairs
Financial reporting, accounting, and owner disbursements

Manager shall perform all duties in a professional manner consistent with prevailing industry standards for property management services in the applicable jurisdiction.

Fair Housing and Anti-Discrimination Compliance. In marketing, screening, leasing, renewing, and managing the Property, Manager shall comply in all respects with the federal Fair Housing Act, 42 U.S.C. §§ 3601–3619, and HUD’s implementing regulations at 24 C.F.R. Part 100, prohibiting discrimination based on race, color, national origin, religion, sex (including sexual orientation and gender identity per HUD’s 2021 Memorandum), familial status, and disability. Manager shall also comply with all applicable state and local fair-housing statutes, source-of-income protections (where enacted), and reasonable-accommodation and reasonable-modification obligations. Any public-facing leasing office, rental office, or similar facility shall comply with Title III of the Americans with Disabilities Act, 42 U.S.C. §§ 12181 et seq., and the ADA Standards for Accessible Design.

Tenant Screening. Any consumer-report-based tenant screening conducted or procured by Manager shall comply with the federal Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq., including the permissible-purpose, pre-adverse-action, and adverse-action notice requirements of 15 U.S.C. §§ 1681b and 1681m, as well as any state “mini-FCRA” statutes and criminal-history or eviction-history limitations enacted in the jurisdiction of the Property.

Trust Accounting and Security Deposits. Manager shall hold all tenant security deposits and prepaid rents in a trust, escrow, or segregated operating account in compliance with applicable state law, including, where applicable, California Civil Code § 1950.5 (interest, accounting, and 21-day itemization), New York General Obligations Law § 7-103 (segregation and interest), Texas Property Code §§ 92.101–92.110 (30-day return and itemization), and Florida Statutes § 83.49. Manager shall never commingle trust funds with its own operating funds except as expressly authorized by statute.

SPENDING AUTHORITY

Spending Authority: Manager is authorized to make expenditures up to 500.00 USD per occurrence for necessary repairs, maintenance, and operational expenses without prior written approval from Owner.

Emergency Authority: In the event of an emergency threatening the safety of tenants or the structural integrity of the Property, Manager is authorized to spend up to two (2) times the standard spending limit without prior Owner approval. Manager shall notify Owner of any emergency expenditure within twenty-four (24) hours.

All expenditures exceeding the authorized limit require Owner's prior written approval. Manager shall obtain at least two (2) competitive bids for any single repair or capital improvement exceeding the spending authority limit.

FINANCIAL REPORTING

Manager shall provide Owner with comprehensive financial reports on a monthly basis. Each report shall include, at a minimum:

Summary of all rents collected and outstanding balances
Itemized list of all expenses paid from the operating account
Current bank account balance and reconciliation
Vacancy report and tenant status updates
Maintenance and repair log with costs

Manager shall maintain all financial records related to the Property for a minimum of seven (7) years. Owner shall have the right to inspect and audit all books and records at any time upon reasonable notice.

OWNER OBLIGATIONS AND INSURANCE

Owner Obligations: Owner shall:

Maintain the Property in compliance with all applicable building codes, health and safety regulations, and environmental laws
Provide Manager with all necessary keys, access codes, and security information for the Property
Cooperate with Manager in all matters relating to the management and leasing of the Property
Respond to Manager's requests for approval within a reasonable time frame (not to exceed five (5) business days)
Maintain current all mortgage payments, property taxes, and assessments on the Property

Insurance Requirements: Owner shall maintain, at Owner's sole expense, the following insurance coverage throughout the term of this Agreement:

Property / hazard insurance
General liability insurance

Owner shall name Manager as an additional insured on all liability policies and shall provide Manager with certificates of insurance upon request.

RESERVE FUND

Owner shall establish and maintain a reserve fund in the amount of 10,000.00 USD for routine maintenance, emergency repairs, and operational expenses relating to the Property. Manager shall deposit the reserve fund into a separate, dedicated account and shall replenish the fund from collected rents as needed.

If the reserve fund balance falls below fifty percent (50%) of the required amount, Manager shall promptly notify Owner, and Owner shall replenish the fund within fifteen (15) business days.

Capital Expenditure Threshold: Any single expenditure or improvement exceeding 3,000.00 USD shall be classified as a capital expenditure and shall require Owner's prior written approval, regardless of the reserve fund balance.

10.

TERMINATION

Termination Without Cause: Either Party may terminate this Agreement by providing thirty (30) days' prior written notice to the other Party.

Termination for Cause: Either Party may terminate this Agreement immediately upon written notice if the other Party:

Material breach of this Agreement
Fraud, embezzlement, or misrepresentation
Gross negligence or willful misconduct

11.

TRANSITION AND DOCUMENT HANDOVER

Upon termination or expiration of this Agreement, Manager shall cooperate fully with Owner to ensure a smooth transition of management responsibilities within thirty (30) days of the effective date of termination. Manager shall:

Provide Owner with a final accounting of all income, expenses, and outstanding balances within fifteen (15) days of termination
Transfer all security deposits, reserve funds, and other Owner funds to Owner or Owner's designee
Deliver all keys, access codes, and security devices related to the Property
Provide copies of all current lease agreements, tenant correspondence, and maintenance records
Assign or transfer all vendor contracts and service agreements as directed by Owner
Provide a current rent roll, tenant contact information, and outstanding work order status report

Manager shall not be entitled to any management fees for periods following the effective date of termination, except for fees earned but not yet paid as of the termination date.

12.

INDEMNIFICATION

Each Party ("Indemnifying Party") agrees to indemnify, defend, and hold harmless the other Party and its officers, directors, employees, agents, and successors ("Indemnified Party") from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or related to: (a) the Indemnifying Party's breach of any representation, warranty, or obligation under this Agreement; (b) the Indemnifying Party's negligence or willful misconduct; or (c) any violation of applicable law by the Indemnifying Party.

Owner shall indemnify and hold Manager harmless from all claims, costs, and liabilities arising from the ownership, management, or condition of the Property, except to the extent caused by Manager's negligence, willful misconduct, or breach of this Agreement.

13.

DISPUTE RESOLUTION

Any dispute, controversy, or claim arising out of or relating to this Agreement shall first be submitted to good-faith mediation. If mediation is unsuccessful within thirty (30) days, the dispute shall be resolved through binding arbitration in accordance with the rules of the American Arbitration Association. The arbitrator's decision shall be final and binding, and judgment upon the award may be entered in any court of competent jurisdiction.

14.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to its conflict of laws principles. Any legal action or proceeding arising under this Agreement shall be brought exclusively in the courts located in the State of Texas, and the Parties hereby consent to personal jurisdiction and venue therein.

15.

ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written. No amendment or modification of this Agreement shall be valid unless made in writing and signed by both Parties. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.

OWNER

Greenfield Properties, LLC

Property Owner

Date: ____________________

MANAGER

Elite Property Management, Inc.

Property Manager

Date: ____________________

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What Is a Property Management Agreement?

A property management agreement is a legally binding contract used throughout the United States between a property owner and a property management company or individual manager. It establishes the terms under which the manager will oversee the day-to-day operations of a rental property, including tenant relations, rent collection, maintenance coordination, and financial reporting. This American agreement protects both parties by clearly defining responsibilities, compensation, and authority limits.

American property owners commonly use management agreements when they own rental properties in locations far from their primary residence, when they lack the time or expertise to manage tenants directly, or when they own multiple units that require professional oversight. Whether the property is a single-family home, a multi-unit apartment complex, a condominium, or a commercial space in the United States, a written agreement prevents misunderstandings and disputes.

Without a formal management agreement, property owners risk unauthorized spending, unclear fee arrangements, and difficulties when the business relationship needs to end. A well-drafted agreement addresses fee structures, spending authority thresholds, insurance obligations, termination procedures, and transition protocols, giving both the owner and manager a clear framework to operate within.

What's Covered in This Template

Doxuno's property management agreement template includes all essential sections needed to establish a professional management relationship. Each section can be customized to fit your specific property and management arrangement.

Parties Identification

Property Description

Fee Structure

Agreement Term

Manager Duties

Spending Authority

Financial Reporting

Insurance Requirements

Reserve Fund

Termination Clause

Transition Protocol

Governing Law

How to Create a Property Management Agreement

Creating a property management agreement requires attention to detail and a clear understanding of both parties' expectations. Our template guides you through each section with live preview so you can see your agreement take shape in real time. Follow these five steps to complete your document.

1
Identify the Parties
Enter the full legal names and contact information for the property owner and the management company. Include business addresses, phone numbers, email addresses, and any applicable property management license or registration numbers. Accurate identification prevents disputes over who is bound by the agreement.
2
Describe the Property
Provide the complete street address of the property being managed. Select the property type, specify the total number of units, note how many are currently occupied, and add any relevant details about amenities, parking, or common areas. This ensures the scope of management is clearly documented.
3
Set the Fee Structure and Term
Choose between a percentage of rent collected, a flat monthly fee, or a hybrid arrangement combining both. Set the agreement start date, pick the contract duration, define the payment schedule, and specify any tenant placement fees or late rent fee splits. Clear compensation terms prevent financial disagreements.
4
Define Manager Duties and Authority
Select which responsibilities the manager will handle, such as tenant screening, rent collection, maintenance coordination, financial reporting, eviction proceedings, vacancy marketing, property inspections, and legal compliance. Set the spending authority limit per occurrence and configure emergency spending rules to protect the property.
5
Establish Termination and Insurance Terms
Configure the notice period required for termination, define grounds that allow immediate termination for cause, set any early termination fees, and specify the transition period for handing over records and funds. Choose the required insurance policies the owner must maintain and set the reserve fund amount for ongoing expenses.

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Templates carrying statute references are continuously updated as the law changes. Your document always reflects the current legal framework.

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Legal Considerations for US Property Management Agreements

U.S. property management agreements create binding legal obligations for both the owner and the manager. Understanding the American legal framework helps both parties protect their interests and avoid common pitfalls that can lead to costly disputes or regulatory violations.

This template is provided for informational purposes and does not constitute legal advice. Property management regulations vary by state and locality. Consult a licensed attorney in your jurisdiction for guidance specific to your situation.

Reviewed by legal professionals. The content on this page and the template clauses have been reviewed by licensed attorneys in the United States to ensure accuracy and legal soundness for standard property management scenarios.

State Licensing Requirements

Property management licensing laws differ significantly from U.S. state to state. Many American states require property managers to hold a real estate broker's license or a dedicated property management license. Some U.S. states allow exemptions for property owners managing their own properties or for managers working under a licensed broker. Before signing a management agreement, verify that the manager holds all required licenses and registrations in your state. Operating without proper licensing can void the agreement and expose both parties to penalties.

Independent Contractor vs. Employee Relationship

A properly drafted property management agreement establishes an independent contractor relationship, not an employment relationship. This distinction has important implications for tax withholding, liability, workers' compensation, and control over work methods. The agreement should clearly state that the manager controls how services are performed and is responsible for their own taxes, insurance, and employee obligations. Misclassifying the relationship can result in back taxes, penalties, and unexpected liability for the property owner.

Spending Authority and Fiduciary Duties

Property managers often handle significant amounts of money on behalf of owners, including rent payments, security deposits, and maintenance funds. The agreement should clearly define spending limits, require competitive bids above certain thresholds, and establish separate trust accounts for owner funds. Most U.S. states have specific laws governing how American property managers must handle client funds, including requirements for trust accounts and detailed record-keeping. Clear spending authority protections prevent unauthorized expenditures and financial disputes.

Frequently Asked Questions

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