PROPERTY MANAGEMENT AGREEMENT

(AZ – Court-Ready Template)

[// GUIDANCE: This template is drafted for residential or commercial properties located in Arizona. Practicing attorneys should tailor bracketed items, confirm all factual inputs, and attach any required schedules/exhibits before execution.]

TABLE OF CONTENTS

1. Document Header & Recitals
2. Definitions
3. Appointment & Scope of Services
4. Term; Renewal; Transition
5. Manager’s Compensation
6. Trust Account & Financial Management
7. Owner’s Representations & Warranties
8. Manager’s Representations, Warranties & Covenants
9. Insurance Requirements
10. Indemnification; Limitation of Liability
11. Compliance With Laws & Disclosure Obligations
12. Records; Inspection & Audit Rights
13. Defaults; Notice & Cure; Remedies
14. Termination
15. Dispute Resolution
16. General Provisions
17. Execution Block

1. DOCUMENT HEADER & RECITALS

This Property Management Agreement (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

• [OWNER LEGAL NAME], a [STATE] [ENTITY TYPE] (“Owner”); and
• [MANAGER LEGAL NAME], a [STATE] [ENTITY TYPE], Arizona Real Estate Broker License No. [LICENSE #] (“Manager”).

(Each a “Party” and collectively, the “Parties.”)

WHEREAS, Owner is the legal owner of the real property located at [PROPERTY ADDRESS / LEGAL DESCRIPTION] (the “Property”); and

WHEREAS, Owner desires to retain Manager to perform certain property management services, and Manager is willing to accept such retention under the terms set forth herein;

NOW, THEREFORE, in consideration of the mutual promises contained herein and other valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below. Defined terms used in singular include the plural and vice-versa:

“Applicable Law” – collectively, (a) the Arizona Revised Statutes, including without limitation Title 32, Ch. 20 (the “Arizona Real Estate Law”) and A.R.S. § 32-2151 et seq. (trust account rules); (b) all federal, state, county, and local statutes, ordinances, regulations, and codes applicable to the Property or the Services; and (c) any judicial or administrative orders binding on a Party.

“Gross Collected Rents” – all amounts actually received by Manager on Owner’s behalf from tenants for rent, late fees, utility reimbursements, parking, and other recurring charges, excluding (i) security deposits until properly applied, and (ii) tenant application fees remitted to Manager.

“Management Fees” – the fees payable to Manager under Section 5.1.

“Services” – the property management services identified in Section 3.1, together with any Additional Services agreed under Section 3.4.

“Trust Account” – the separate, designated property management trust account(s) maintained by Manager pursuant to Section 6 and A.R.S. § 32-2151.

[// GUIDANCE: Add additional defined terms here as needed for your transaction.]

3. APPOINTMENT & SCOPE OF SERVICES

3.1 Engagement. Owner hereby engages Manager as Owner’s exclusive agent to manage, operate, and lease the Property, and Manager hereby accepts such engagement, subject to the limitations of authority set forth herein.

3.2 Standard Services. Manager shall, consistent with industry best practices and Applicable Law:
(a) Market the Property, screen prospective tenants, negotiate and execute leases on Owner’s approved form;
(b) Collect rents and other charges, issue receipts, and pursue collection actions;
(c) Coordinate routine maintenance, repairs, and capital improvements not exceeding the Authorization Limit (defined below);
(d) Hire, supervise, and discharge on-site personnel, independent contractors, and vendors;
(e) Respond to tenant inquiries and complaints;
(f) Serve notices and commence lawful eviction proceedings when necessary;
(g) Prepare and deliver monthly owner statements and annual operating budgets; and
(h) Perform all other duties reasonably incidental to the foregoing.

3.3 Authorization Limit. Without Owner’s prior written consent, Manager shall not incur any single expense exceeding $[DOLLAR AMOUNT] (“Authorization Limit”), except (i) in emergencies affecting life, safety, or property, or (ii) as expressly permitted elsewhere in this Agreement.

3.4 Additional Services. Services outside the scope of Section 3.2 (e.g., major capital projects, legal proceedings, or environmental remediation) shall be performed only pursuant to a mutually executed written addendum and may be billed at Manager’s then-standard hourly rates or on another agreed basis.

4. TERM; RENEWAL; TRANSITION

4.1 Initial Term. The term commences on the Effective Date and continues for [INITIAL TERM] (“Initial Term”), unless earlier terminated in accordance with Section 14.

4.2 Automatic Renewal. Upon expiration of the Initial Term, the Agreement shall automatically renew for successive one-year periods (each, a “Renewal Term”) unless either Party delivers written notice of non-renewal at least [30/60] days before the end of the then-current term.

4.3 Transition Assistance. Upon termination or expiration, Manager shall (a) cooperate in good faith to transfer management responsibilities, (b) deliver all Property records, keys, and funds, and (c) remain entitled to accrued but unpaid compensation.

5. MANAGER’S COMPENSATION

5.1 Management Fee. Owner shall pay Manager a monthly fee equal to [__]% of Gross Collected Rents, due and payable on the [DAY] of each calendar month and payable from funds held in the Trust Account.

5.2 Leasing Fee. For each new lease of the Property procured by Manager, Owner shall pay a one-time leasing fee of [__]% of the first month’s rent (or $[AMOUNT] flat fee), payable upon tenant’s rent commencement.

5.3 Maintenance Oversight Fee. For any single repair or improvement exceeding $[THRESHOLD], Manager may charge an oversight fee equal to [__]% of the project cost.

5.4 Expense Reimbursement. Owner shall promptly reimburse Manager for all reasonable out-of-pocket costs incurred on Owner’s behalf (e.g., advertising, background checks), provided such costs are supported by receipts and within the Authorization Limit or otherwise approved.

[// GUIDANCE: Delete or modify fee structures to align with brokerage regulations and fair housing guidelines.]

6. TRUST ACCOUNT & FINANCIAL MANAGEMENT

6.1 Establishment and Maintenance. Manager shall maintain one or more Trust Accounts, titled “[MANAGER NAME] Trust Account – [PROPERTY IDENTIFIER],” at a federally insured depository located in Arizona, in compliance with A.R.S. § 32-2151 and related Arizona Department of Real Estate (“ADRE”) rules.

6.2 Deposits. All rents, security deposits, and other funds collected on Owner’s behalf shall be deposited into the Trust Account within three (3) banking days of receipt or as otherwise required by Applicable Law.

6.3 Prohibitions. Manager shall not commingle Owner funds with Manager’s own funds or with funds of other owners, except as expressly allowed under A.R.S. § 32-2151(C).

6.4 Disbursements. Manager is authorized to disburse Trust Account funds for (i) payment of Management Fees and reimbursable expenses, (ii) payment of operating expenses and approved capital expenditures, and (iii) remittance of net proceeds to Owner on or before the [DAY] of the following month.

6.5 Accounting & Reconciliation. Manager shall perform monthly three-way reconciliations of each Trust Account and retain supporting records for at least five (5) years or the period required by ADRE, whichever is longer.

7. OWNER’S REPRESENTATIONS & WARRANTIES

Owner represents and warrants that:
(a) Owner holds good and marketable title to the Property and full authority to enter into and perform this Agreement;
(b) The Property is in compliance with all Applicable Law, including zoning, building codes, and life-safety regulations, except as disclosed in writing to Manager;
(c) Owner will provide Manager with all current leases, service contracts, warranties, permits, and Property records necessary for performance; and
(d) No litigation, condemnation, or other proceeding is pending or threatened that would materially impair Owner’s ability to perform hereunder.

The foregoing representations and warranties shall survive termination of this Agreement with respect to matters arising during the Term.

8. MANAGER’S REPRESENTATIONS, WARRANTIES & COVENANTS

8.1 Licensure. Manager represents that it (i) is duly licensed as a real estate broker in the State of Arizona, (ii) will maintain such license in good standing throughout the Term, and (iii) will cause all persons engaging in licensed activity to hold appropriate licenses.

8.2 Standard of Care. Manager shall perform the Services in a diligent, commercially reasonable manner, consistent with professional property management standards in Arizona.

8.3 Employees & Contractors. Manager shall ensure that all employees and third-party contractors are properly qualified and insured. Any employees placed at the Property shall remain employees of Manager, not Owner.

8.4 Compliance Covenant. Manager shall (a) comply with all Applicable Law, including fair housing, landlord-tenant, environmental, and employment laws; (b) maintain policies and procedures to prevent discrimination and harassment; and (c) timely file all tax forms and informational returns required in connection with rents collected.

9. INSURANCE REQUIREMENTS

9.1 Owner’s Insurance. Owner shall maintain, at its expense, (i) all-risk property insurance covering the full replacement cost of the Property, and (ii) commercial general liability coverage of at least $[AMOUNT] per occurrence/$[AMOUNT] aggregate, naming Manager as an additional insured.

9.2 Manager’s Insurance. Manager shall maintain (i) errors & omissions/professional liability insurance with limits not less than $[AMOUNT] per claim, (ii) workers’ compensation insurance as required by law, and (iii) fidelity bond or crime coverage consistent with ADRE guidelines.

10. INDEMNIFICATION; LIMITATION OF LIABILITY

10.1 Manager’s Indemnification of Owner. Manager shall indemnify, defend, and hold harmless Owner, its affiliates, and their respective officers, directors, members, and employees from and against any and all claims, damages, losses, liabilities, and expenses (including reasonable attorneys’ fees) (collectively, “Losses”) arising out of (i) Manager’s gross negligence, willful misconduct, or breach of this Agreement; or (ii) any violation of Applicable Law by Manager or its personnel.

10.2 Limitation of Liability. EXCEPT FOR (A) MANAGER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, (B) MANAGER’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 10.1, AND (C) CLAIMS THAT CANNOT BE LIMITED BY LAW, THE TOTAL LIABILITY OF MANAGER ARISING OUT OF OR RELATED TO THIS AGREEMENT SHALL NOT EXCEED THE MANAGEMENT FEES ACTUALLY PAID TO MANAGER DURING THE [12]-MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

10.3 No Consequential Damages. In no event shall either Party be liable for special, incidental, punitive, or consequential damages (including lost profits), whether in contract, tort, or otherwise, even if advised of the possibility thereof.

11. COMPLIANCE WITH LAWS & DISCLOSURE OBLIGATIONS

11.1 Licensing Compliance. Manager shall satisfy all continuing education and record-keeping requirements imposed by the ADRE.

11.2 Lead-Based Paint & Environmental. For residential properties built prior to 1978, Manager shall provide tenants with required lead-based paint disclosures pursuant to 42 U.S.C. § 4852d and 24 C.F.R. Part 35. Manager shall also provide any statutorily mandated bedbug, pool safety, asbestos, or other environmental disclosures applicable to the Property.

11.3 Fiduciary Duty. Manager acknowledges its fiduciary obligation to Owner under Arizona common law and A.R.S. § 32-2153 and shall act in good faith and in Owner’s best interests at all times.

11.4 Trust Account Audits. Owner acknowledges and consents to ADRE audits of the Trust Account. Manager shall promptly notify Owner of any material audit findings.

12. RECORDS; INSPECTION & AUDIT RIGHTS

12.1 Record Maintenance. Manager shall keep accurate and complete books and records regarding the Property and the Trust Account in accordance with GAAP and ADRE rules.

12.2 Owner Inspection. Owner or its designated representatives may, upon [5] business days’ prior written notice, inspect and copy such records during normal business hours at Manager’s principal office.

12.3 Audit. Owner may, at its expense, cause an independent CPA to audit Manager’s books and records relating to the Property once per calendar year, provided such CPA executes a reasonable confidentiality agreement. If an audit reveals an overcharge to Owner exceeding [3]% of annual Gross Collected Rents, Manager shall reimburse Owner for the audit cost.

13. DEFAULTS; NOTICE & CURE; REMEDIES

13.1 Events of Default. A Party is in default if it:
(a) Fails to make any payment when due and such failure continues for [10] days after written notice;
(b) Materially breaches any non-monetary obligation and fails to cure within [30] days after written notice (or such longer period as reasonably necessary so long as diligent efforts to cure are commenced within the initial 30-day period);
(c) Becomes insolvent, makes an assignment for the benefit of creditors, or files for bankruptcy; or
(d) Loses any license or insurance required for performance of this Agreement.

13.2 Remedies. Upon any uncured Event of Default, the non-defaulting Party may (i) terminate this Agreement upon written notice; (ii) seek injunctive relief to prevent further default; (iii) offset damages against any amounts owed; and (iv) pursue any other remedy available at law or in equity. All remedies are cumulative.

13.3 Attorney Fees. The prevailing Party in any dispute arising under this Agreement is entitled to recover its reasonable attorney fees, court costs, and expenses.

14. TERMINATION

14.1 Termination for Convenience. Either Party may terminate this Agreement without cause upon [30/60] days’ prior written notice.

14.2 Effect of Termination. Sections 5 (to the extent of accrued fees), 6.5, 7, 8.4, 9, 10, 12, 13, 15, and 16 survive termination.

15. DISPUTE RESOLUTION

15.1 Governing Law. This Agreement and any dispute arising hereunder shall be governed by the laws of the State of Arizona, without regard to its conflict-of-law principles.

15.2 Forum Selection. The Parties consent to exclusive jurisdiction of the state courts located in [COUNTY], Arizona (and, if applicable, the U.S. District Court for the District of Arizona).

15.3 Optional Arbitration. At the election of either Party, any dispute (except for actions seeking injunctive relief per Section 15.4) shall be submitted to binding arbitration administered by [AAA/JAMS] in accordance with its commercial arbitration rules, held in [CITY], Arizona. Judgment on the award may be entered in any court of competent jurisdiction.

15.4 Injunctive Relief. Notwithstanding Section 15.3, either Party may seek temporary, preliminary, or permanent injunctive relief or specific performance in a court of competent jurisdiction without posting bond, in order to prevent actual or threatened irreparable harm.

15.5 Jury Trial Waiver. TO THE EXTENT PERMITTED BY LAW, EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT.

[// GUIDANCE: Jury waivers should be reviewed for enforceability under Arizona law and federal constitutional standards.]

16. GENERAL PROVISIONS

16.1 Amendment; Waiver. No amendment or waiver of any provision of this Agreement is effective unless in a writing signed by both Parties. A waiver on one occasion shall not constitute a waiver on any other occasion.

16.2 Assignment. Neither Party may assign or delegate its rights or obligations without the prior written consent of the other Party, except that Owner may assign to a purchaser of the Property upon written notice to Manager. Any prohibited assignment is void.

16.3 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their permitted successors and assigns.

16.4 Severability. If any provision is held unenforceable, the remainder shall be interpreted to effect the intent of the Parties, and the invalid provision shall be reformed to the minimum extent necessary for enforceability.

16.5 Entire Agreement. This Agreement, including all schedules and exhibits, constitutes the complete and exclusive statement of the agreement between the Parties and supersedes all prior or contemporaneous agreements or understandings.

16.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and all of which constitute one and the same instrument. Signatures transmitted by facsimile, PDF, or electronic signature platform (e.g., DocuSign) are binding for all purposes.

17. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Property Management Agreement as of the Effective Date.

[// GUIDANCE: Notarization is generally not required for enforceability of a property management agreement in Arizona, but may be advisable if recordation or heightened evidentiary value is desired.]

SCHEDULE 1

(Description of Property)

[Insert legal description, parcel number, and any improvements]

SCHEDULE 2

(Management Fee Schedule & Expense Categories)

[Insert detailed chart or list]

SCHEDULE 3

(Required Disclosures & Tenant Notices)

• Lead-Based Paint Pamphlet (pre-1978 residential)
• Arizona Residential Landlord-Tenant Act Summary (A.R.S. § 33-1322)
• Pool Safety Notice (if applicable)
• Bedbug Disclosure (A.R.S. § 33-1319)
• Mold Information Sheet (if applicable)

[// GUIDANCE: Attach additional federal, state, and municipal disclosures as required.]

END OF DOCUMENT