PROPERTY MANAGEMENT AGREEMENT

(State of Texas)

[// GUIDANCE: This template is drafted for residential and/or commercial rental property located in Texas. It incorporates key requirements of the Texas Real Estate License Act (TRELA) and Texas Real Estate Commission (TREC) Rules concerning licensing, trust accounts, and disclosures. Customize bracketed items before use.]

TABLE OF CONTENTS

1. Document Header............................................................ 2
2. Definitions................................................................ 3
3. Operative Provisions....................................................... 5
4. Representations & Warranties............................................... 9
5. Covenants & Restrictions.................................................. 11
6. Default & Remedies........................................................ 13
7. Risk Allocation........................................................... 15
8. Dispute Resolution........................................................ 17
9. General Provisions........................................................ 19
10. Execution Block.......................................................... 22

(Page numbers are illustrative and should be updated after final formatting.)

1. DOCUMENT HEADER

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] (“Manager”).

1.1 Recitals

WHEREAS, Owner is the fee simple owner of the real property and improvements commonly known as [PROPERTY ADDRESS] (the “Property”); and
WHEREAS, Manager is duly licensed as a real estate broker in the State of Texas, License No. [LICENSE NO.], and is experienced in the management of properties similar to the Property; and
WHEREAS, Owner desires to engage Manager, and Manager desires to accept such engagement, to provide property management services for the Property, all on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below:

“Applicable Law” means all federal, state, and local statutes, regulations, rules, ordinances, and common-law requirements, including without limitation the Texas Real Estate License Act, the rules of the Texas Real Estate Commission (“TREC Rules”), the Texas Property Code, fair-housing laws, and any habitability or health and safety laws applicable to the Property.

“Broker Trust Account” means a separate, federally-insured trust or escrow account maintained by Manager at a financial institution located in Texas, into which all Rents and Security Deposits are deposited in accordance with Applicable Law.

“Leases” means all present and future leases, rental agreements, and occupancy agreements with respect to any portion of the Property, and all amendments, extensions, and renewals thereof.

“Management Fee” has the meaning set forth in Section 3.4(a).

“Rents” means all base rents, additional rents, late fees, utility reimbursements, and any other amounts payable by Tenants under the Leases.

“Security Deposit” means any deposit or other amount held to secure a Tenant’s obligations under a Lease.

“Services” means the property management services described in Section 3.2.

“Tenant” means any person or entity entitled to occupy any portion of the Property pursuant to a Lease.

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

3. OPERATIVE PROVISIONS

3.1 Appointment; Scope of Agency

Owner hereby engages Manager as the exclusive agent for the purpose of providing the Services, and Manager hereby accepts such engagement, subject to the limitations set forth in this Agreement. The relationship created hereby is that of principal and agent only; nothing herein shall be construed to create a partnership, joint venture, or other fiduciary relationship beyond duties imposed by Applicable Law.

3.2 Services

Manager shall diligently perform the following Services in a manner consistent with the highest professional standards and in compliance with Applicable Law:
a. Leasing & Marketing. Advertise vacancies, screen prospective Tenants, negotiate and execute Leases on Owner’s behalf, and comply with all fair-housing requirements.
b. Rent Collection. Collect Rents when due, deliver notices to delinquent Tenants, and institute eviction or other proceedings as necessary, subject to Owner’s prior written instructions where required by law.
c. Repairs & Maintenance. Arrange for and supervise maintenance, repairs, capital improvements, and emergency services to the Property.
d. Financial Management. Maintain accurate books and records, deposit and disburse Rents and Security Deposits through the Broker Trust Account, and remit net proceeds to Owner monthly together with detailed statements.
e. Tenant Relations. Respond promptly to Tenant inquiries and complaints.
f. Compliance. Ensure the Property and management activities comply with Applicable Law, including habitability, safety, and disclosure requirements.
g. Other Services. Perform such additional services as are reasonably necessary or as Owner and Manager may agree in writing.

[// GUIDANCE: Consider attaching a Schedule of Services for complex properties.]

3.3 Term

a. Initial Term. The term of this Agreement shall commence on the Effective Date and continue for [INITIAL TERM (e.g., one year)] (the “Initial Term”) unless earlier terminated pursuant to Section 6.2.
b. Renewal. This Agreement shall automatically renew for successive periods of [RENEWAL TERM] unless either party gives written notice of non-renewal at least [90] days before the expiration of the then-current term.

3.4 Compensation

a. Management Fee. As consideration for the Services, Owner shall pay Manager a management fee equal to [PERCENTAGE]% of the monthly Rents actually collected (the “Management Fee”).
b. Leasing Fee. For each new Lease procured or renewed by Manager, Owner shall pay Manager a leasing fee equal to [AMOUNT or % OF FIRST MONTH’S RENT].
c. Maintenance Coordination Fee. Manager shall be entitled to a coordination fee of [AMOUNT or %] of each invoice for repairs exceeding [$___].
d. Reimbursement of Expenses. Owner shall reimburse Manager for all out-of-pocket expenses reasonably incurred in performing the Services, provided such expenses are itemized and supported by receipts.
e. Offset. Manager may deduct the Management Fee and reimbursable expenses from Rents prior to remitting proceeds to Owner.

3.5 Accounting; Records

a. Monthly Statements. Within [10] days after the end of each calendar month, Manager shall deliver to Owner a statement of cash receipts and disbursements, a rent roll, and such other reports as Owner may reasonably request.
b. Annual Statement. Within [30] days after each calendar year-end, Manager shall deliver to Owner an annual operating statement and Form 1099 reporting as required by the Internal Revenue Code.
c. Books and Records. All books and records maintained by Manager relating to the Property (collectively, the “Books and Records”) are and shall remain the property of Owner. Books and Records shall be kept in accordance with generally accepted accounting principles (GAAP) and Available for inspection by Owner upon [48] hours’ notice.

3.6 Broker Trust Account

Manager shall deposit all Rents and Security Deposits in the Broker Trust Account and shall maintain such account strictly in accordance with Applicable Law, keeping Owner funds segregated from Manager’s own funds. Interest, if any, earned on the Broker Trust Account shall accrue to [Owner/Manager] unless otherwise required by law.

3.7 Security Deposits

Manager shall collect, hold, and disburse Security Deposits in compliance with the Texas Property Code. Upon termination of this Agreement, Manager shall promptly transfer all outstanding Security Deposits, together with an accounting, to Owner or Owner’s designee.

4. REPRESENTATIONS & WARRANTIES

4.1 Manager’s Representations

Manager represents and warrants to Owner that:
a. Licensing. Manager holds and will maintain throughout the Term an active Texas real estate broker license in good standing.
b. Authority. Manager has full power and authority to enter into and perform this Agreement.
c. No Conflict. The execution and performance of this Agreement do not and will not violate any agreement binding on Manager.
d. Compliance. Manager is, and will remain, in compliance with Applicable Law.

4.2 Owner’s Representations

Owner represents and warrants to Manager that:
a. Title. Owner is the lawful owner of the Property and has full power and authority to engage Manager.
b. Legal Compliance. To Owner’s knowledge, the Property is in material compliance with Applicable Law, or Owner will promptly disclose any non-compliance.
c. Adequate Funding. Owner shall provide sufficient funds to Manager to cover Property operating expenses in excess of Rents collected.

4.3 Survival

All representations and warranties shall survive the termination or expiration of this Agreement for a period of [12] months.

5. COVENANTS & RESTRICTIONS

5.1 Affirmative Covenants of Manager

a. Standard of Care. Manager shall perform the Services with the degree of care, skill, and diligence commonly possessed by property managers of first-class properties in Texas.
b. Equal Housing Compliance. Manager shall comply with the Fair Housing Act and analogous Texas statutes.
c. Insurance. Manager shall maintain at its own expense (i) commercial general liability insurance with limits of not less than [$1,000,000] per occurrence, (ii) professional liability (errors & omissions) insurance in an amount not less than [$1,000,000], and (iii) workers’ compensation coverage as required by law, listing Owner as an additional insured where applicable.

5.2 Negative Covenants of Manager

Manager shall not, without Owner’s prior written consent:
a. Enter into any Lease with a term exceeding [____] months;
b. Make any single non-emergency expenditure in excess of [$____];
c. Confess judgment against Owner, release any Tenant from material obligations, or modify rental rates except as permitted herein.

5.3 Notice & Cure

Each party shall promptly notify the other of any event, condition, or legal action that could reasonably be expected to affect the Property or either party’s ability to perform under this Agreement. Unless otherwise specified, a defaulting party shall have [10] days (monetary) or [30] days (non-monetary) after receipt of notice to cure, provided that if non-monetary default is not reasonably curable within such period, the defaulting party may commence cure within the period and diligently pursue completion.

6. DEFAULT & REMEDIES

6.1 Events of Default

The occurrence of any of the following shall constitute an “Event of Default”:
a. Monetary default not cured within the period specified in Section 5.3;
b. Non-monetary default not cured within the period specified in Section 5.3;
c. Insolvency or bankruptcy of either party;
d. Revocation, suspension, or lapse of Manager’s real estate broker license.

6.2 Termination Rights

a. Termination for Cause. Upon an Event of Default by the other party, the non-defaulting party may terminate this Agreement upon [10] days’ written notice.
b. Termination for Convenience. Either party may terminate this Agreement without cause upon [30/60/90] days’ prior written notice, subject to payment of all amounts then owed to Manager.
c. Duties on Termination. Upon termination, Manager shall (i) deliver all Books and Records to Owner, (ii) transfer Security Deposits and trust funds, (iii) assign all Leases and contracts to Owner or its designee, and (iv) cooperate reasonably to ensure orderly transition.

6.3 Remedies

In addition to termination, the non-defaulting party may pursue any remedies available at law or in equity, including specific performance, injunctive relief, and recovery of damages. Each party shall be entitled to recover reasonable attorneys’ fees and costs incurred in enforcing this Agreement, whether suit is initiated or not.

7. RISK ALLOCATION

7.1 Indemnification

a. By Manager. Manager shall indemnify, defend, and hold harmless Owner and its affiliates, officers, directors, and employees (each, an “Owner Indemnitee”) from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of (i) Manager’s breach of this Agreement, (ii) the gross negligence or willful misconduct of Manager or its employees or contractors, or (iii) violation of Applicable Law by Manager.
b. By Owner. Owner shall indemnify, defend, and hold harmless Manager and its affiliates, officers, directors, and employees (each, a “Manager Indemnitee”) from and against all claims arising out of (i) Owner’s breach of this Agreement, (ii) hazardous materials or existing violations at the Property not caused by Manager, or (iii) matters outside Manager’s control where Manager acted in accordance with Owner’s written instructions.

7.2 Limitation of Liability

Except for (i) gross negligence or willful misconduct, (ii) fraud, or (iii) amounts payable under the indemnities herein, the total cumulative liability of Manager to Owner under this Agreement shall not exceed the aggregate Management Fees actually paid to Manager during the [12] months immediately preceding the event giving rise to such liability.

7.3 Insurance & Waiver of Subrogation

Owner shall maintain property insurance covering the full replacement cost of the Property, naming Manager as an additional insured and waiving subrogation against Manager to the extent permitted by law.

7.4 Force Majeure

Neither party shall be liable for failure to perform due to events beyond its reasonable control, including acts of God, labor disputes, governmental actions, pandemics, or shortages of materials, provided the affected party gives prompt notice and resumes performance as soon as practicable.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement shall be governed by and construed in accordance with the real estate laws of the State of Texas, without regard to its conflict of law principles.

8.2 Forum Selection

Each party irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY], Texas with respect to any action arising out of or relating to this Agreement.

8.3 Arbitration (Optional)

[OPTION A – Include]
Any dispute not resolved within [30] days after notice may, at the election of [either party/both parties], be submitted to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The arbitration shall be conducted in [CITY, Texas] by a single arbitrator with at least ten (10) years’ experience in real estate matters. Judgment on the award may be entered in any court of competent jurisdiction.

[OPTION B – Omit]
[// GUIDANCE: Delete the arbitration clause if the parties do not wish to arbitrate.]

8.4 Jury Trial Waiver (Optional)

EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.

[// GUIDANCE: Strike this clause if the parties prefer not to waive jury trial.]

8.5 Provisional Remedies

Nothing in this Section shall restrict either party from seeking temporary or preliminary injunctive relief or a temporary restraining order in any court of competent jurisdiction to prevent irreparable harm pending the outcome of any dispute-resolution procedure.

9. GENERAL PROVISIONS

9.1 Amendments; Waiver

No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties. A waiver of any breach shall not constitute a waiver of any subsequent breach.

9.2 Assignment

Neither party may assign or delegate its rights or obligations under this Agreement without the prior written consent of the other party, except that Owner may assign this Agreement to a successor-in-interest to the Property upon written notice to Manager.

9.3 Successors & Assigns

This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

9.4 Severability

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to make it enforceable.

9.5 Integration

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written.

9.6 Notices

All notices shall be in writing and deemed given when delivered personally, sent by certified mail (return receipt requested), or sent by nationally recognized overnight courier to the addresses set forth below (or such other address as a party may designate by notice):

Owner: [ADDRESS]
Manager: [ADDRESS]

9.7 Counterparts; Electronic Signatures

This Agreement may be executed in counterparts, each of which shall be deemed an original. Signatures transmitted electronically (e.g., via PDF or e-signature platform) shall be deemed original signatures and fully enforceable.

9.8 Time of Essence

Time is of the essence with respect to each obligation under this Agreement.

10. EXECUTION BLOCK

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

OWNER:
[OWNER LEGAL NAME]
By: ____
Name: ____
Title: ____

MANAGER:
[MANAGER LEGAL NAME]
By: ____
Name: ____
Title: ____

[ADD NOTARY BLOCK IF DESIRED]
[ADD WITNESS SIGNATURES IF REQUIRED BY OWNER’S POLICIES]

[// GUIDANCE:
1. Confirm Manager’s trust-account structure complies with the banking institution’s policies and TREC Rules before accepting any funds.
2. Review local (city/county) ordinances for additional registration, inspection, or rental-housing licensing requirements.
3. Replace bracketed placeholders, delete optional sections not selected, and adjust monetary limits, cure periods, and insurance coverages to fit the particular transaction.
4. Provide this Agreement to clients along with a summary of key obligations and deadlines to promote compliance.
]