When property owners partner with a property management company they trust, their business thrives: Owners can focus on big-picture activities, while property managers ensure units are occupied, attract tenants, collect rent, and arrange maintenance.
Owners benefit by paying close attention to contracts proposed by property management companies. Though there is an average length for the typical contract, the details vary and may be found in the fine print.
The majority of property management contracts are 12 months long, but they can be shorter or longer. In addition to the length of the agreement, a property management contract covers everything the property manager will do for the owner and fees for the service. The contract also stipulates which party is responsible for the functions of the daily operations of the property.
Some parts of a property management agreement are non-negotiable and unlikely to change during the tenure of your relationship with the property manager. These include:
A property management contract, like other contracts, is legally binding. Both parties benefit by talking to an attorney before signing the contract. Government lenders, like the U.S. Department of Housing and Urban Development, also have
sample contracts online. Other online legal sites include property management contracts. The forms include spaces to fill in regarding how long the contract will be in effect and other terms.
Property owners who partner with
Select Leasing & Management don’t need to worry about drafting a contract, because we have a contract covering all the pertinent details.
Property management contracts are living documents, updated as conditions change. If you have a year-long contract, we recommend reviewing it two months before your contract is set to renew. Think about whether you want to change some things. If you do, present your requests to the property management company.
Property management companies also review contracts annually and inform owners of pending changes approximately two months before the contract renews. A property manager might increase fees with the new contract and change services, policies, or procedures
Once it’s clear how the property management company wants to modify a contract, and the company has seen your requests, it is time to negotiate. An amended contract will need to be created and reviewed by an attorney.
Some property management contracts automatically renew at the conclusion of the contract for another term. If the contract is for 12 months, it will renew for 12 months. Before signing an auto-renewing lease, property owners must know they will be able to cancel the contract only at the end of the contract term. If the contract renews and they want to end the agreement a few months later, they are prevented from doing so.
Other contracts offer month-to-month agreements after the first year. Owners pay more for the flexibility of month-to-month contracts.
If you sign an auto-renewing contract, realize you may cancel the contract only at the end of the contract term, even if you have been a client of the property management company for years.
While most property management contracts are 12 months long, there are benefits to shorter ones. Normally there are no changes to contracts until they renew. With a shorter contract, both owners and property management companies have more opportunities to make changes benefiting their working arrangement.
A property owner might think a
multi-year contract is a good idea. Maybe it is for them. However, many think 12 month contracts are best because they allow for annual adjustments based on market trends and the needs of both parties. If a multi-year agreement is reached, the contract needs to include the possibility of amending the contract if both parties agree. The same is true for 12 month contracts that automatically renew.
If you are searching for a St. Louis property management company, consider Select Leasing & Management. Our services are designed to take the stress out of owning rental property. We manage condominiums, single-family homes, apartments, and multi-family units. Our agents create comprehensive marketing plans to give each property the visibility to help attract quality tenants. Other services include:
Property owners see their financial statements, access shared documents, and make online payments through the Select Leasing & Management Owner Portal.
If you’re looking for a better property management experience at competitive prices, drop us a note online or call us at 314-835-6002.
12851 Manchester Rd., Ste 110
St. Louis, MO, 63131
