Property Management Agreement (Affiliated) (Short Form)

by Practical Law Real Estate

A Standard Document providing a short-form property management agreement for the management of commercial property, such as a multitenant office, retail, or industrial asset, by a manager that is an affiliate of the property owner. This Standard Document is useful for a real estate joint venture where an operating member manages the property through an affiliated entity. It outlines the manager's key duties and responsibilities, including serving as the leasing agent, handling rent collection, overseeing property maintenance, and preparing the annual budget. The agreement also details financial reporting obligations, the process for managing an operating account and tenant security deposits, and compliance with laws. This Standard Document addresses the manager's compensation structure, defines how the management fee is calculated based on gross revenues, and establishes reimbursement parameters for manager's expenses. It includes important risk allocation mechanisms through insurance requirements and tailored indemnification clauses. It defines specific events that trigger termination for cause and clarifies limitations on the manager's authority, which are often linked to the owner's joint venture agreement. This Standard Document has integrated notes with important explanations and drafting and negotiating tips for owners and managers. While management agreements are generally governed by state law, this jurisdictionally neutral template is useful and relevant in every state.