Will I need a property management agreement or contract, or can I enter into a "verbal agreement?"  What information should be included in a management agreement between a property owner and a property manager?

It is never a good idea to enter into a "verbal agreement" or a "handshake agreement." Always, always, always ask for it in writing.   A written agreement between the owner of the property and the property manager or property management company is very important. The property manager will be taking on significant responsibilities with the owners rental property.  An agreement between the property owner and the property manager or property management company is vital for both parties.  Without a written agreement between a property owner and a Property Manager a simple misunderstanding can turn into a costly nightmare for the property owner and the Property Management Company.

A Property Management Agreement or Property Management Contract should include and identify following topics:

• Physical address and legal description of the rental property as well as ownership of the property, 
• Fees associated with leasing the property. Those fees should be spelled out as to whether they are for a base monthly fee, a percentage of rents collected, whether a management set-up fee is charged, whether a marketing charge is assessed over and above any paid advertising such as newspapers or online advertising,
• Specify the length of time the Property Management Agreement is in force and whether it cancels at the end of the term or whether it automatically renews for a specified time,
• Specify how a contract can be terminated by either the Property Owner or the Property Management Company,
• Specify how, when and where the rents collected on the property be paid to the owner,
• List the responsibilities and the authority given to the Property Manager,
• Identify the responsibilities of the property owner,
• Include the date of the agreement and the signatures of both parties, 
• Other forms that should be included in the contract or Management Agreement should identify whether the utilities are to be transferred back to the Property Owner when the unit is vacant or whether the utilities be turned off,
• Will the Property Management Company be listed as Additional Insured on the insurance policy,
• The agreement should identify maintenance expectations and whether the Management Company needs to obtain permission for necessary repairs and what maintenance is don in the event of a mechanical emergency and the owner cannot be contacted.