PROPERTY MANAGEMENT AGREEMENT

(State of Maryland)

[// GUIDANCE: This template has been drafted for use by Maryland-licensed real-estate professionals. Insert bracketed information, delete inapplicable options, and confirm compliance with the most current Maryland Real Estate Commission regulations before execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Appointment; Scope of Authority
4. Term; Renewal; Transition
5. Manager Duties
6. Owner Duties
7. Compensation; Expenses
8. Representations & Warranties
9. Covenants & Compliance
10. Insurance Requirements
11. Indemnification; Limitation of Liability
12. Default; Remedies
13. Termination
14. Dispute Resolution
15. General Provisions
16. Execution Block

1. DOCUMENT HEADER

PROPERTY MANAGEMENT AGREEMENT (“Agreement”) made effective as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

1. [OWNER LEGAL NAME], a [STATE] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Owner”); and
2. [MANAGER LEGAL NAME], a Maryland-licensed real estate broker (License No. [LICENSE NO.]) with its principal place of business at [ADDRESS] (“Manager”).

Recitals

A. Owner is the fee simple owner of the real property and improvements commonly known as [PROPERTY ADDRESS / LEGAL DESCRIPTION] (“Property”).
B. Owner desires to engage Manager, and Manager desires to accept such engagement, to provide professional property management services for the Property upon the terms set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following capitalized terms have the meanings set forth below. Defined terms include singular and plural forms as the context requires.

“Affiliate” – Any entity controlling, controlled by, or under common control with a Party.
“Applicable Law” – All federal, state, county, and municipal laws, statutes, regulations, ordinances, and orders applicable to the Parties or the Property, including without limitation (i) the Maryland Real Estate Brokers Act, Md. Code Ann., Bus. Occ. & Prof. § 17-101 et seq.; (ii) Maryland Real Estate Commission regulations regarding trust/escrow accounts; and (iii) all fair-housing, lead-based-paint, and habitability requirements.
“Brokerage Act” – The Maryland Real Estate Brokers Act cited above.
“Gross Rents” – All rent and other amounts collected from tenants of the Property, exclusive of security deposits and tenant application fees.
“Management Fee” – The fee payable to Manager pursuant to Section 7.1.
“Services” – The property management services described in Section 5.
“Trust Account” – A federally insured depository account established and maintained by Manager in accordance with § 17-503 of the Brokerage Act and related regulations, into which tenant monies are deposited.

[// GUIDANCE: Add or delete definitions as needed. Cross-check every capitalized term for consistency.]

3. APPOINTMENT; SCOPE OF AUTHORITY

3.1 Appointment. Owner hereby appoints Manager as the exclusive agent to manage, operate, lease, and maintain the Property, and Manager accepts such appointment subject to the terms of this Agreement.

3.2 Fiduciary Capacity. Manager shall act as a fiduciary of Owner within the scope of real-estate brokerage services as defined in the Brokerage Act.

3.3 Delegation to Employees and Vendors. Manager may delegate tasks to its employees or independent contractors; however, Manager remains fully responsible for the performance of all Services.

3.4 Limitation on Authority. Manager shall not:
(a) Sell, encumber, or convey any interest in the Property;
(b) Expend more than [$____] on any single repair or capital item without Owner’s prior written consent, except in emergencies;
(c) Engage any Affiliate to provide goods or services without prior written disclosure and Owner approval.

4. TERM; RENEWAL; TRANSITION

4.1 Initial Term. The term begins on the Effective Date and continues for [___] years (the “Initial Term”).

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

4.3 Transition Assistance. Upon any termination or expiration, Manager shall cooperate in good faith to transition management to Owner or Owner’s designee, including transfer of all funds, records, and tenant information within [15] business days.

5. MANAGER DUTIES

Manager shall, in accordance with Applicable Law and prudent industry standards:

5.1 Leasing & Marketing
(a) Advertise vacancies, screen applicants, and execute residential leases on Owner-approved forms.
(b) Comply with all federal and state fair-housing laws.

5.2 Rent Collection & Trust Accounting
(a) Collect all rents, fees, and other charges; issue receipts.
(b) Deposit tenant monies into a Trust Account titled “[MANAGER NAME], Trustee for [OWNER NAME]” within the time prescribed by Applicable Law.
(c) Maintain complete and accurate trust-account records, subject to audit by the Maryland Real Estate Commission and Owner.

5.3 Maintenance & Repairs
(a) Conduct routine inspections at least [___] times per year.
(b) Arrange for repairs and maintenance, obtaining competitive bids where costs exceed [$____].
(c) Maintain a 24-hour emergency response service.

5.4 Financial Reporting
(a) Provide Owner with monthly statements of cash receipts and disbursements by the [___] day of the following month.
(b) Provide annual operating statements and IRS Form 1099-MISC no later than January 31 of each year.

5.5 Legal Compliance & Disclosures
(a) Ensure timely delivery of all statutorily required disclosures to tenants, including but not limited to lead-based-paint, radon, and utility cost disclosures.
(b) Register pre-1978 residential properties with the Maryland Department of the Environment lead-paint program, if applicable.

5.6 Record Retention. Maintain books and records for at least five (5) years following the termination of this Agreement.

[// GUIDANCE: Adjust inspection frequency, spending limits, and reporting schedules to the particular project.]

6. OWNER DUTIES

6.1 Provide Funds. Maintain with Manager an operating reserve of [$____], replenishable within five (5) business days of written request.

6.2 Insurance. Maintain property and liability insurance as required in Section 10.

6.3 Information. Furnish all documents, warranties, and prior service agreements relevant to the Property.

6.4 Cooperation. Execute all documents and take all actions reasonably requested by Manager to enable Manager to perform the Services.

7. COMPENSATION; EXPENSES

7.1 Management Fee. As compensation for Services, Owner shall pay Manager a monthly fee equal to [__ %] of Gross Rents or [$____] per month, whichever is greater.

7.2 Leasing Fee. For each new lease executed, Owner shall pay Manager [__ %] of the first month’s rent.

7.3 Late-Fee Participation. Manager shall retain [__ %] of any late fees collected.

7.4 Reimbursable Expenses. Owner shall reimburse Manager for reasonable, out-of-pocket costs incurred in performing the Services, provided such costs are supported by receipts and within budgeted limits.

7.5 Payment Mechanics. Manager may deduct the foregoing amounts from Gross Rents prior to remitting net proceeds to Owner each month.

7.6 No Compensation on Security Deposits. Manager shall not earn fees on tenant security deposits.

8. REPRESENTATIONS & WARRANTIES

8.1 Mutual. Each Party represents that it is duly organized, validly existing, and authorized to enter into this Agreement.

8.2 Owner. Owner represents that:
(a) Owner holds good title to the Property;
(b) The Property is in compliance with Applicable Law or Owner has disclosed any violations in writing to Manager; and
(c) All information provided to Manager is accurate and complete in all material respects.

8.3 Manager. Manager represents that:
(a) Manager holds an active Maryland broker’s license in good standing;
(b) Manager carries the insurance required by Section 10; and
(c) Manager is not subject to any investigation or disciplinary action that would impair its ability to perform under this Agreement.

8.4 Survival. The representations and warranties of this Section 8 shall survive termination of the Agreement.

9. COVENANTS & COMPLIANCE

9.1 Manager Covenants. Manager shall:
(a) Maintain its broker’s license and comply with all continuing-education requirements;
(b) Keep the Trust Account separate from all other accounts and not commingle funds;
(c) Obtain Owner’s prior written consent for any capital expenditure exceeding the threshold in Section 3.4(b); and
(d) Promptly notify Owner of any material tenant disputes or governmental notices.

9.2 Owner Covenants. Owner shall:
(a) Provide timely funding of the operating reserve;
(b) Maintain the Property in habitable condition; and
(c) Not interfere with Manager’s performance of the Services.

9.3 Notice & Cure. A Party alleging breach of any covenant shall provide written notice specifying the breach. The breaching Party shall have [10] business days (or such shorter period as is reasonable in the circumstances) to cure.

10. INSURANCE REQUIREMENTS

10.1 Owner Policies. Owner shall maintain all-risk property insurance and premises liability insurance (minimum bodily injury/property damage limits: $1 million per occurrence), naming Manager as an additional insured.

10.2 Manager Policies. Manager shall maintain:
(a) Errors & Omissions insurance: $1 million per claim; and
(b) Fidelity/Crime bond covering employees handling funds: $100,000 minimum.

10.3 Proof of Coverage. Each Party shall provide certificates of insurance upon request and at each renewal.

11. INDEMNIFICATION; LIMITATION OF LIABILITY

11.1 Manager Indemnification. Manager shall indemnify, defend, and hold Owner harmless from and against any and all claims, losses, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of (a) Manager’s gross negligence, willful misconduct, or breach of this Agreement; or (b) violations of Applicable Law by Manager.

11.2 Owner Indemnification. Owner shall indemnify, defend, and hold Manager harmless from and against claims arising out of (a) conditions at the Property not caused by Manager; (b) Owner’s breach of this Agreement; or (c) Owner’s violation of Applicable Law.

11.3 Limitation of Liability. Except for (i) indemnification obligations, (ii) gross negligence or willful misconduct, and (iii) amounts paid or payable under insurance, Manager’s aggregate liability under this Agreement shall not exceed the total Management Fees actually received by Manager during the twelve (12) months preceding the event giving rise to liability.

[// GUIDANCE: Liability caps tied to fees are common but may be unenforceable for intentional misconduct; always carve out non-waivable liabilities.]

12. DEFAULT; REMEDIES

12.1 Events of Default.
(a) Failure to Pay. Failure of Owner to pay any amount due within five (5) business days after written notice.
(b) Trust Account Violation. Manager’s failure to maintain funds in accordance with Section 5.2.
(c) Insolvency. A Party’s bankruptcy or assignment for the benefit of creditors.
(d) Material Breach. Any other material breach that remains uncured after the notice-and-cure period in Section 9.3.

12.2 Remedies. Upon an Event of Default, the non-defaulting Party may:
(i) Terminate this Agreement immediately on written notice;
(ii) Offset amounts due;
(iii) Seek injunctive relief; and/or
(iv) Pursue any other remedies at law or in equity.

12.3 Attorneys’ Fees. The prevailing Party in any action to enforce this Agreement is entitled to recover its reasonable attorneys’ fees and costs.

13. TERMINATION

13.1 Convenience. Either Party may terminate without cause upon [30/60] days’ prior written notice.

13.2 Effect. Upon termination, Manager shall:
(a) Cease use of Owner’s funds except for authorized disbursements;
(b) Deliver to Owner the balance of all Trust Account funds, tenant security deposits, and accounting thereof;
(c) Transfer leases, keys, and records; and
(d) Be entitled to Management Fees and other compensation earned through the effective date of termination.

14. DISPUTE RESOLUTION

14.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland, without regard to conflict-of-laws principles.

14.2 Forum Selection. The state courts located in [COUNTY], Maryland shall have exclusive jurisdiction, and each Party consents to such venue.

14.3 Optional Arbitration. At the election of [EITHER/BOTH] Party(ies), any dispute arising hereunder shall be submitted to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.

14.4 Jury Trial Waiver. [OPTIONAL—STRIKE IF NOT APPLICABLE] EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT.

14.5 Injunctive Relief. Nothing herein shall limit either Party’s right to seek provisional or injunctive relief in any court of competent jurisdiction to prevent irreparable harm.

15. GENERAL PROVISIONS

15.1 Amendments. No amendment or waiver of any provision shall be effective unless in a writing signed by both Parties.

15.2 Assignment. Neither Party may assign this Agreement without the other’s prior written consent, except that Owner may assign in connection with a sale of the Property after thirty (30) days’ notice to Manager.

15.3 Successors & Assigns. This Agreement binds and benefits the Parties and their respective permitted successors and assigns.

15.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to render it valid.

15.5 Integration. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter and supersedes all prior agreements or understandings.

15.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts (including PDF or electronic signatures), each of which is deemed an original and all of which constitute one instrument.

15.7 Notices. All notices shall be in writing and delivered (i) by hand, (ii) by certified mail, return receipt requested, (iii) by nationally recognized overnight courier, or (iv) by email with confirmation of transmission, to the addresses set forth in the preamble (or as updated by notice). Notices are effective upon receipt.

16. EXECUTION BLOCK

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

OWNER:
[OWNER LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________

MANAGER:
[MANAGER LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________

[// GUIDANCE: Maryland law does not generally require notarization for a property-management agreement; however, certain owners or lenders may prefer notarization. Insert a notary block if desired.]

END OF DOCUMENT