What is the primary purpose of a management contract?

The primary purpose of a management contract is to outline the responsibilities of the owner and the property management agent. This document serves as a formal agreement that specifies the roles and obligations each party has in regard to the property management relationship. It typically details what tasks the property manager will handle, such as marketing the property, collecting rent, maintaining the property, and dealing with tenant issues, while also clarifying the owner’s responsibilities, such as providing funds for maintenance or making decisions about significant expenditures.

By clearly defining these roles, both parties have a mutual understanding of their obligations, which helps ensure that the property is managed effectively and that expectations are aligned. This clarity can prevent disputes and facilitate smoother operations, as both the property owner and the management agent will know their duties.