Define Management Agreement In Real Estate

If you own real estate and want to entrust the management to a company or an individual, you need this agreement. If you were working as a management company, you will also need this contract to protect your business. A handshake agreement works well as long as the trading partnership runs smoothly. A written contract offers better protection to both parties in the event of a dispute. To protect yourself, make sure the agreement contains a “due diligence” clause. For example, the manager is not held liable if the recruitment of a third party demonstrates “due diligence”, also known as being expected to do his research and not hire a contractor with a history of complaints against them. A. Administrative Costs. In compensation for the services provided by the Manager, the Owner pays the Manager an amount equal to the greater amount (“administrative fee”) (i) [INSERT %] of the gross revenues received by the owner of the operation of the property during each year (or sub-year) during the term, or (ii) $[NUMBER] per year. Administrative costs may be paid by the manager from the operating account; provided that the monthly financial report described in Section 7 reflects the amount of the administrative fee paid to the AIFM in respect of the period covered by this financial report. “gross receipts” means (1) the amount of all rents paid by tenants under leases, including base and additional rents, (2) payments for incidentals paid by tenants to the landlord under lease agreements, and (3) parking payments paid by tenants to the landlord under lease agreements. .