How to read a property management agreement

The short answer

Read the fee schedule, the term-and-termination clause, the maintenance authority and markup clause, and the definition of "rent collected" before anything else. Those four decide what you pay and whether you can leave. Everything else is detail. A fair agreement puts every fee in one table, lets you exit with reasonable notice, and tells you what happens to your money and your tenant if you do.

The twelve clauses

1. 01

   Management fee basis

   Percentage of rent charged, rent collected, or scheduled rent? "Scheduled rent" means you pay the fee whether or not the tenant paid. Fair: a fee on collected rent only, or a flat fee that is waived in months nothing is collected.

2. 02

   Vacancy fee

   Some agreements charge a reduced monthly fee, or the full fee, while the unit is empty. Fair: nothing while vacant. Ask the question directly; it is almost never on the pricing page.

3. 03

   Leasing / placement fee and what triggers it

   Usually 50–100% of one month's rent, or a flat amount. Check whether it is charged again if the tenant leaves early, and whether the manager owes you a replacement if their tenant is evicted. Fair: a written replacement guarantee for tenants the manager screened.

4. 04

   Renewal fee

   Charged when an existing tenant signs another term. Ranges from under $100 to a percentage of rent with a $1,000 cap in Greenville. Fair: a flat amount that reflects the work, which is small.

5. 05

   Maintenance markup and authority

   Two questions: what percentage is added to vendor invoices, and how much can the manager spend without asking you. A 10% management fee with 20% on every repair costs more than a 12% fee with none. Fair: markup disclosed as a number, a spending limit you set, and itemized invoices on your statement.

6. 06

   Term and auto-renewal

   Twelve-month initial terms that renew automatically are common. Fair: a short term or none, with the renewal mechanics stated in one sentence.

7. 07

   Termination notice and penalty

   Look for early-termination fees, "liquidated damages," or a requirement to pay the remaining months' fees. Fair: 30 days' notice, no penalty, or at most a fee equal to one month's management.

8. 08

   What happens to the lease and the deposit when you leave

   The tenant's lease should transfer to you or your next manager, with the security deposit and all records. Some agreements are silent, which means an argument later. Fair: explicit transfer language and a timeline.

9. 09

   Sale clause

   Some agreements require you to list through the manager's brokerage if you sell during the term, or pay a commission if you sell to a tenant they placed. Fair: no obligation to list with them, or a clearly stated and limited tenant-sale commission.

10. 10

    Eviction cost allocation

    Who pays filing fees, court costs, and attorney fees? Fair: the manager covers eviction of a tenant they screened, and quotes contested matters before incurring cost. See how we handle it.

11. 11

    Reserve requirement

    The amount of your money the manager holds in the operating account for repairs. $250–$500 per unit is normal. Fair: stated, held in a trust account, and shown on your statement.

12. 12

    Miscellaneous fees

    Technology or portal fees, inspection fees, advertising fees, setup or onboarding fees, "administrative" fees, and late-fee splits where the manager keeps the tenant's late fees. Each is small; together they can add 20–30% to the headline rate. Fair: one fee table, and "if it isn't in the table we don't charge it."

Five questions to ask before you sign

• "Send me a real owner statement from last month, with a repair on it, names redacted." You will learn more from one statement than from the whole brochure.
• "If I want to leave in six months, what do I pay and what do I get back?"
• "Who does the maintenance, what is added to the invoice, and what's my approval limit?"
• "If your tenant stops paying, what does the eviction cost me?"
• "Do you charge anything in a month rent doesn't come in?"

A manager who answers all five in writing before you sign is telling you how the relationship will go.

How ours reads

Flat $115 per door per month, charged only in months rent is collected. $500 placement, $250 renewal. No markup on in-house repairs, which are about 95% of jobs; 10% on outside vendors, itemized. No term, 30 days' notice, no penalty, lease and deposit transfer with you. $0 eviction on tenants we placed. No technology, inspection, advertising, or setup fees. The whole thing is on the pricing page and the guarantees page, and we will send the agreement itself before you commit to anything.