What is the purpose of a management agreement?

A management agreement serves a specific and vital role in the property management sector by clearly outlining the responsibilities and duties assigned to a property manager. This document acts as a contractual basis that defines what is expected from the property manager, including their scope of work, management fee, and the authority granted to them with respect to the property.

By detailing the duties of the property manager, the management agreement helps ensure that both the property owner and the manager have aligned expectations. It typically includes provisions related to tenant relations, maintenance and repair responsibilities, financial management, and reporting obligations. This clear delineation of responsibilities not only protects the interests of the property owner but also provides the property manager with a framework within which to operate effectively.

Thus, the correct purpose of a management agreement is to establish the duties and expectations associated with property management, ensuring a smooth operation and maintenance of the property.