---
title: "What to put in a property management agreement"
description: "See what a property management agreement should name: parties, term, fees, repair limits, and how either side can end it."
url: https://tivio.io/blog/what-to-put-in-a-property-management-agreement
author: "Tivio Team"
publisher: Tivio (https://tivio.io)
published: 2026-10-28
updated: 2026-10-28
topic: "Growing your business"
---

# What to put in a property management agreement

> A property management agreement should name the parties and the property, the term, your authority, every fee, a repair spending limit, and how either side can end it. A $500 routine limit lets you approve a $180 lock and requires a call before a $1,400 water heater. Put the deal in a signed writing and give the owner a copy. Have a local attorney review the form, because state and provincial requirements differ.

## Key takeaways

- Use one written agreement that names the property, the fees, the repair limit, and the notice required to end it.
- Separate routine spending, which stops at your dollar limit, from emergency work that stops active damage.
- List every fee the owner will pay, including a leasing fee and any markup, and disclose rebates.
- Have a local attorney review the form before the first owner signs it.

A property management agreement is the written contract that names the property, your authority, the fees, and how either side can end the relationship. Put every fee and every spending limit in that document before you collect rent or sign a lease for the owner. A $500 repair limit means you can approve a $180 lock change and you call the owner before a $1,400 water heater. State rules differ, so have a local attorney review the form before you use it.

![A fountain pen resting on printed contract pages with signature lines.](https://tivio.io/blog/media/2026/10/a-fountain-pen-resting-on-printed-contract-pages-with-signat-zbtplw.webp)

## What does the agreement need to settle?

The agreement is how the owner hires you. It states what you will do, what you will not do, what you will be paid, and what happens to keys, deposits, and records when the job ends. A handshake feels faster on the first duplex. It is how fee fights start in month four.

[NARPM's Code of Ethics](https://www.narpm.org/docs/about/ethics/2024-code-of-ethics.pdf), standard 3-1, tells members to use written agreements, and written extensions when a term is extended, outlining all responsibilities and fees. The client gets a copy. You keep a copy. Standard 3-6 adds that you disclose pertinent facts about a transaction. The [California Department of Real Estate reference book](https://www.dre.ca.gov/files/pdf/refbook/ref22.pdf) calls a written management contract ordinary good practice and says it should cover the term, the management policies, the fees, and the authority the owner gives you. The [DRE brochure for landlords hiring a manager](https://www.dre.ca.gov/files/pdf/landlord_brochure_14-264.pdf) tells owners to read for extra fees, including markups. Other states and provinces set their own required clauses. Use those sources as a checklist, then have counsel in your jurisdiction mark up the form.

## Who and which property are covered?

Name the legal parties. If the owner is an LLC, the agreement is with the LLC, and the person who signs needs authority to bind it. Name every property by street address. If you will manage only four of six units, say so. A vague "all my rentals" pulls a cabin three states away into your duty on a Tuesday night.

Name the people on your side. If a licensed broker must supervise the work, the agreement should match that structure. If a particular person is the day-to-day contact, say that the firm is the manager and name the contact as a convenience. That wording matters later, when you hire someone else to carry the same portfolio.

Describe the owner's duties in the same section. The owner provides accurate lease information, keeps insurance in force, and funds habitability repairs. NARPM standard 5-1 says a member does not manage for a client who refuses or is unable to maintain the property to local safety and habitability rules. Give yourself a clean exit if funding stops. Standard 5-2 is the matching duty to terminate when the client will not comply.

## How long does it last, and how does it end?

Write a start date and a term. Month-to-month with 30 days' notice is common for a first agreement. A one-year term with a 60-day non-renewal notice is easier to plan around. Automatic renewal is fine when the notice window is real and you calendar it.

Write both exits. The owner can end the agreement. You can end it. State the notice in days, whether email counts, and what is owed for a lease you already signed. A leasing fee you earned before termination stays earned if the agreement says so. The monthly fee stops on the end date. The agreement states the amount due for a partial final month. Say who finishes a repair that is already in progress.

On the end date you hand back keys, leases, applicant records you are allowed to transfer, deposit records, unpaid invoices, and the owner's funds, in the form your state or province requires. You keep copies of what your license or your insurer tells you to keep. NARPM standard 1-5 expects members to protect confidential information and to release it when the work, or the law, requires it. Tenant information is part of that duty. You transfer what the next manager needs to operate, and you do not post it anywhere else.

## What authority and spending limit should you set?

Authority is the list of acts the owner allows you to perform. Typical items are collecting rent, depositing it as your local rules require, signing leases within a rent range the owner approved, hiring vendors, and starting a nonpayment process the agreement describes. Some owners want to approve every lease. That is workable if the agreement gives them a response time, such as two business days, and treats silence as approval or as a hold. Pick one. Silence with no rule is how a unit sits empty while you wait.

Set a dollar limit for repairs you may order without a fresh approval. Emergency work that protects safety or stops ongoing damage needs a separate sentence, with a cap or a "reasonable cost" phrase your attorney accepts. Routine work above the limit waits for the owner.

| Clause | What you write | Example |
| --- | --- | --- |
| Parties and property | Legal names and street addresses | Northside LLC, 14 Oak Street, Units 1–4 |
| Term and notice | Start, end, and how notice is delivered | 12 months, then 30 days' written notice |
| Leasing authority | Rent range and who approves an applicant who meets your criteria | List at $1,500 to $1,600; you approve inside the written criteria |
| Repair limit | Routine cap, plus an emergency path | $500 routine; emergency work to stop active damage |
| Fees | Every amount the owner will pay you | Monthly fee as stated, leasing fee on its own line |
| Reserve | Minimum owner funds kept for repairs | $1,500, replenished when it falls below $500 |
| Insurance | Owner's property policy and your own coverage | Owner keeps liability and property coverage in force |
| End of job | What you return, and by when | Keys, leases, deposit records, and owner funds within 10 business days |

The monthly management fee is whatever method the agreement states: a flat amount, a percent, or another formula you both signed. This contract article is the place you name that method. The arithmetic of a percent fee is a separate habit you repeat every month from the sentence you wrote. Additional charges, including a leasing fee and any markup, get their own sentences. The DRE brochure's point is simple. The owner should be able to find every extra fee without guessing.

Standard 3-4 belongs in the fee section too. If you receive a rebate, a referral fee, or a vendor discount, you disclose it and the owner approves it. A markup you keep is a fee. Write the percent or the flat amount.

## What does a $500 limit look like in dollars?

Your agreement with Harbor Street LLC sets a $500 routine repair limit and requires a call above that, except for emergency work to stop active damage. In March the lock on Unit 2 fails. The locksmith invoices $180. You approve it, note it, and it appears on the owner's next report. The same week the water heater on Unit 4 dies. Two quotes come in at $1,250 and $1,400. You stop. You email the owner the same day with both quotes, a one-sentence recommendation for the $1,250 bid, and a request for a yes or no within two business days, which is the response time in the agreement.

If you order the $1,400 heater because the tenant is unhappy and you hope the owner will understand, you have spent $900 past your authority. Some owners pay it. Some do not. The agreement is what you point to, in either direction. The emergency sentence covers a burst supply line the same night: you hire the plumber to stop the water, you tell the owner in the morning, and a full replacement still comes back through the $500 rule if the emergency spend did not already finish the job.

## What do you leave out of the first version?

Leave out special deals you cannot explain to the next owner who asks for the same form. One agreement template, with blanks for address, rent range, fee, and repair limit, is enough for the first dozen clients. A side letter that changes the fee and never makes it back into the template will be the letter you forget at statement time.

Leave out duties you do not actually perform. If you do not provide tax preparation, say that the owner handles their own taxes. If you do not guarantee a tenant, say that you will market and screen to the written criteria and that a vacant month can still happen. Overpromising reads well on a sales call and reads badly in a dispute. The DRE reference book's agency point is the practical one: you owe the owner loyalty, care, and disclosure of the facts that matter. You can disclose a slow market in one sentence. You cannot promise a rent the building will not fetch.

Keep the signed agreement where you can find it. Once it is signed, enter the owner, the property, and the management fee percentage in Tivio.

A one-page fee schedule and a one-line spending limit will save you more arguments than anything else in the agreement. [Tivio](https://tivio.io/) takes the management fee as rent is collected, so the fee on the owner statement follows the rate you set instead of a hand calculation each month.

## Frequently asked questions

### Does a handshake count as a management agreement?

Treat a signed writing as the agreement. NARPM members are required to use written agreements that list responsibilities and fees. A verbal deal is where fee disputes start, and some states expect a written contract for licensed work.

### What repair limit should I set?

Pick a number you can live with on ordinary calls, such as $500, and write a separate path for emergency work that stops active damage. The right number depends on your market and the owner. The agreement has to state it.

### Should every fee be in the agreement?

Yes. The monthly fee, any leasing fee, any markup, and any rebate you keep should be written down and disclosed. An owner should be able to find every charge without guessing.

### Can I copy another firm's agreement?

Use a form your own attorney has reviewed for the state or province where the property sits. Required clauses differ. A form that fits California can miss a rule in Texas or Ontario.

## Sources

- [California Department of Real Estate Reference Book, Chapter 22: Property Management](https://www.dre.ca.gov/files/pdf/refbook/ref22.pdf), California Department of Real Estate
- [NARPM Code of Ethics and Standards of Professionalism (updated February 2024)](https://www.narpm.org/docs/about/ethics/2024-code-of-ethics.pdf), National Association of Residential Property Managers
- [Quick Guide for Landlords Hiring a Property Manager](https://www.dre.ca.gov/files/pdf/landlord_brochure_14-264.pdf), California Department of Real Estate