PROPERTY MANAGEMENT AGREEMENT
(Virginia – Comprehensive Template)
[// GUIDANCE: This template is drafted for use in the Commonwealth of Virginia and incorporates core Virginia-specific property management requirements, including licensure, trust/escrow accounting, and statutory disclosure duties. All bracketed items must be customized and reviewed by counsel prior to execution.]
TABLE OF CONTENTS
- Document Header & Recitals
- Definitions
- Appointment; Scope of Authority
- Term; Renewal
- Management Duties & Performance Standards
- Owner Duties & Authority Retained
- Compensation; Expenses; Accounting
- Licensure, Trust Accounts & Statutory Compliance (VA Specific)
- Representations & Warranties
- Covenants
- Insurance Requirements
- Indemnification; Limitation of Liability; Risk Allocation
- Default; Remedies
- Termination
- Dispute Resolution; Injunctive Relief
- General Provisions
- Execution Block
1. DOCUMENT HEADER & RECITALS
PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [PROPERTY OWNER LEGAL NAME], a [STATE OF ORGANIZATION & ENTITY TYPE] (“Owner”), and [PROPERTY MANAGER LEGAL NAME], a [STATE OF ORGANIZATION & ENTITY TYPE] (“Manager”).
WHEREAS, Owner is the fee simple owner of the real property commonly known as [PROPERTY ADDRESS/LEGAL DESCRIPTION] (the “Property”); and
WHEREAS, Manager is duly licensed (or employs individuals duly licensed) under the Virginia Real Estate License Law and applicable Virginia Real Estate Board regulations to engage in property management activities; and
WHEREAS, Owner desires to retain Manager, and Manager desires to accept such engagement, to manage, operate, maintain, and lease the Property pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other 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. Terms defined herein include their singular and plural forms and apply equally to any gender.
“Applicable Law” – All federal, state, and local statutes, ordinances, regulations, codes, orders, and case law, including without limitation the Virginia Real Estate License Law and Real Estate Board regulations.
“Confidential Information” – All non-public information disclosed by either party that is designated confidential or that a reasonable person would understand to be confidential.
“Management Fee” – The fee payable to Manager pursuant to Section 7.1.
“Rent” – All payments of rent or other sums collectible from tenants of the Property.
“Security Deposit(s)” – All tenant security deposits, pet deposits, and other similar sums required under any lease.
[ADD additional defined terms as needed]
3. APPOINTMENT; SCOPE OF AUTHORITY
3.1 Appointment. Owner hereby appoints Manager as the exclusive agent to manage, operate, maintain, and lease the Property, and Manager hereby accepts such appointment, subject to the terms of this Agreement.
3.2 General Duties. Manager shall perform all services reasonably necessary for the prudent and competent operation of the Property, including those set forth in Section 5.
3.3 Standard of Care. Manager shall perform its duties (i) in a fiduciary capacity to Owner, (ii) in good faith, (iii) in a manner consistent with industry best practices for comparable properties in Virginia, and (iv) in compliance with Applicable Law.
3.4 Limitations. Manager shall not, without prior written consent of Owner:
(a) Expend or commit to expend more than [DOLLAR THRESHOLD] for any single item (except emergency repairs as provided in Section 5.2);
(b) Enter into any service contract exceeding [CONTRACT TERM LIMIT] months;
(c) Sell, convey, or encumber any interest in the Property; or
(d) Engage in any action that would reasonably be expected to create a lien against the Property other than Permitted Liens.
4. TERM; RENEWAL
4.1 Initial Term. The term of this Agreement shall commence on the Effective Date and continue for [INITIAL TERM NUMBER] years (the “Initial Term”) unless sooner terminated pursuant to Section 14.
4.2 Renewal. Unless either party delivers written notice of non-renewal at least [X] days prior to expiration of the Initial Term (or any Renewal Term), this Agreement shall automatically renew for successive periods of [RENEWAL TERM LENGTH] (each, a “Renewal Term”).
5. MANAGEMENT DUTIES & PERFORMANCE STANDARDS
5.1 Leasing & Marketing. Manager shall:
(a) Advertise and market available units;
(b) Screen prospective tenants in compliance with fair housing laws;
(c) Negotiate, execute, renew, and terminate leases using forms approved by Owner;
(d) Collect Rent and other charges.
5.2 Maintenance & Repairs. Manager shall:
(a) Maintain the Property in a clean, safe, and tenantable condition;
(b) Make or cause to be made ordinary repairs, replacements, and improvements not exceeding the spending limit in Section 3.4(a);
(c) In emergencies threatening life or property, incur reasonable expenses without limit, promptly notifying Owner thereafter.
5.3 Financial Reporting. Manager shall provide Owner with monthly income/expense statements, rent rolls, and variance reports within [X] days after month-end, and annual statements within [X] days after fiscal year-end.
5.4 Compliance & Disclosures. Manager shall:
(a) Ensure all legally required notices and disclosures are provided to tenants (including, where applicable, lead-based paint, mold, radon, and landlord-tenant rights);
(b) Coordinate required inspections;
(c) Maintain records for not less than [RECORD RETENTION YEARS] years or as otherwise required by law.
[// GUIDANCE: Insert any property-specific duties (e.g., pool maintenance, parking enforcement) here.]
6. OWNER DUTIES & AUTHORITY RETAINED
6.1 Funding. Owner shall maintain a minimum working capital reserve of [RESERVE AMOUNT] in Manager’s trust account to fund operating expenses.
6.2 Insurance. Owner shall procure and maintain the insurance required by Section 11 naming Manager as an additional insured.
6.3 Approvals. Owner agrees to act promptly on all requests by Manager for approvals or instructions and to execute documents reasonably necessary for Manager’s performance.
6.4 Owner Representations. Owner represents that it (i) has good and marketable title to the Property, free of undisclosed liens, and (ii) is authorized to enter into this Agreement.
7. COMPENSATION; EXPENSES; ACCOUNTING
7.1 Management Fee. Owner shall pay Manager a management fee equal to [MANAGEMENT FEE PERCENTAGE]% of monthly collected Rent, payable [timing] (“Management Fee”).
7.2 Leasing Fee. For each new lease or renewal, Owner shall pay Manager a leasing fee of [LEASING FEE]% of the first month’s Rent (or other agreed amount).
7.3 Expense Reimbursement. Owner shall reimburse Manager for all reasonable, out-of-pocket expenses incurred on Owner’s behalf and approved pursuant to Section 3.4.
7.4 Delinquent Accounts. Late fees and other tenant penalty charges shall be [allocated to Owner / retained by Manager].
7.5 Accounting Method. All funds shall be accounted for on a [cash/accrual] basis.
8. LICENSURE, TRUST ACCOUNTS & STATUTORY COMPLIANCE (VA SPECIFIC)
8.1 Licensure Warranty. Manager warrants that it (and/or its supervising broker) holds a current and unencumbered Virginia real estate broker’s license authorizing property management services. Manager shall promptly notify Owner of any license suspension, revocation, or disciplinary action.
8.2 Trust/Escrow Accounts.
(a) Establishment. Manager shall maintain one or more federally insured trust/escrow accounts titled “[TRUST ACCOUNT NAME] – Escrow/Trust Account” at [DEPOSITORY INSTITUTION], segregated from Manager’s operating accounts, for all Rents, Security Deposits, and other funds belonging to others, consistent with Virginia Real Estate Board rules.
(b) Deposits. All funds collected shall be deposited within the timeframes required by Applicable Law.
(c) Disbursements. Disbursement of trust funds shall be made only for authorized expenses, security-deposit returns, or Owner distributions.
(d) Recordkeeping & Reconciliation. Manager shall maintain complete ledgers and shall reconcile each trust account monthly.
8.3 Statutory Disclosures. Manager shall provide or coordinate delivery of all disclosures required under Applicable Law, including but not limited to:
(i) Lead-based paint disclosure for housing constructed prior to 1978;
(ii) Mold remediation notice where applicable;
(iii) Any disclosures mandated by the Virginia Residential Landlord and Tenant Act (VRLTA) or successor statutes.
9. REPRESENTATIONS & WARRANTIES
9.1 Mutual. Each party represents and warrants that:
(a) It is duly organized, validly existing, and in good standing in its jurisdiction of formation;
(b) It has full power and authority to execute and deliver this Agreement and to perform its obligations;
(c) This Agreement constitutes a valid and binding obligation enforceable against such party in accordance with its terms.
9.2 Manager. Manager further represents that:
(a) All personnel involved in property management activities are properly licensed or qualified;
(b) Manager carries the insurance required under Section 11;
(c) Manager is not a party to any agreement or litigation that would materially interfere with its ability to perform hereunder.
9.3 Survival. All representations and warranties shall survive the termination of this Agreement for a period of [X] years.
10. COVENANTS
10.1 Affirmative Covenants of Manager. Manager shall:
(a) Maintain all licenses and permits;
(b) Comply with federal, state, and local fair housing laws and regulations;
(c) Cooperate with any Owner audit upon [reasonable] notice;
(d) Maintain Confidential Information.
10.2 Negative Covenants of Manager. Manager shall not commingle trust funds with its own funds, nor pay its own debts from trust accounts.
10.3 Owner Covenants. Owner shall not interfere with Manager’s day-to-day management responsibilities except as expressly reserved herein.
11. INSURANCE REQUIREMENTS
11.1 Owner Policies. Owner shall maintain:
(a) Property/all-risk insurance in an amount not less than [REPLACEMENT COST];
(b) Commercial general liability insurance with limits of at least [LIMITS] per occurrence, naming Manager as additional insured;
(c) [Flood / other specialty coverage as applicable].
11.2 Manager Policies. Manager shall maintain:
(a) Errors & omissions/professional liability coverage of at least [LIMITS] per claim;
(b) Fidelity/employee dishonesty bond covering personnel with trust-fund access;
(c) Workers’ compensation as required by law.
12. INDEMNIFICATION; LIMITATION OF LIABILITY; RISK ALLOCATION
12.1 Manager Indemnity. Manager shall indemnify, defend, and hold harmless Owner and its affiliates, and their respective managers, members, officers, directors, and employees (collectively, “Owner Indemnified Parties”) from and against any and all claims, damages, losses, liabilities, penalties, fines, costs, and expenses (including reasonable attorneys’ fees) to the extent arising out of (i) Manager’s gross negligence, willful misconduct, or breach of this Agreement, or (ii) violations of Applicable Law by Manager.
12.2 Limitation of Liability. Except for (a) indemnification obligations under Section 12.1, (b) fraud, or (c) intentional misconduct, Manager’s aggregate liability under this Agreement shall not exceed an amount equal to the total Management Fees actually received by Manager during the [12 / 24] months immediately preceding the event giving rise to liability.
12.3 Consequential Damages. Neither party shall be liable to the other for special, indirect, or consequential damages, including lost profits, except to the extent such damages are included in a third-party claim indemnified under Section 12.1.
13. DEFAULT; REMEDIES
13.1 Events of Default. The following constitute “Events of Default”:
(a) Material breach of this Agreement not cured within [30] days after written notice;
(b) Insolvency, assignment for the benefit of creditors, or commencement of bankruptcy proceedings by either party;
(c) Loss, suspension, or revocation of Manager’s required license;
(d) Fraud or willful misconduct.
13.2 Remedies. Upon an Event of Default, the non-defaulting party may:
(a) Terminate this Agreement immediately upon written notice;
(b) Seek injunctive relief;
(c) Exercise any other rights at law or in equity, including recovery of actual damages, costs, and reasonable attorneys’ fees.
13.3 Cumulative Rights. All remedies are cumulative and may be exercised concurrently or separately.
14. TERMINATION
14.1 Termination Without Cause. Either party may terminate this Agreement without cause upon [60] days’ prior written notice.
14.2 Obligations Upon Termination. Upon termination, Manager shall:
(a) Provide a final accounting within [30] days;
(b) Transfer all funds, leases, files, and keys to Owner or Owner’s designee;
(c) Cooperate in the orderly transition of management.
14.3 Survival. Sections 8, 9, 11, 12, 13, 15, and 16 shall survive termination.
15. DISPUTE RESOLUTION; INJUNCTIVE RELIEF
15.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without regard to conflict-of-law principles.
15.2 Forum Selection. Any suit arising under this Agreement shall be brought exclusively in the state courts located in [COUNTY/CITY, VA], and each party irrevocably submits to the personal jurisdiction of such courts.
15.3 Optional Arbitration. [OPTIONAL: In lieu of Section 15.2, either party may elect binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The election must be made by written notice within ten (10) days after service of a complaint. Judgment on the award may be entered in any court of competent jurisdiction.]
15.4 Jury Trial Waiver. [OPTIONAL: EACH PARTY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.]
15.5 Injunctive Relief. Each party acknowledges that a breach of confidentiality, trust-account, or licensed-activity obligations may cause irreparable harm for which monetary damages are inadequate and consents to the issuance of injunctive relief to enforce such obligations without the necessity of posting bond (or with bond not to exceed [AMOUNT]).
16. GENERAL PROVISIONS
16.1 Amendments & Waivers. No amendment or waiver of any provision shall be effective unless in writing signed by both parties. No waiver shall be deemed a waiver of any other or subsequent breach.
16.2 Assignment. Neither party may assign this Agreement without prior written consent of the other, except that Owner may assign to a successor in title upon written notice.
16.3 Successors & Assigns. This Agreement binds and benefits the parties and their respective permitted successors and assigns.
16.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the court shall modify the invalid provision to render it enforceable to the maximum extent permitted.
16.5 Entire Agreement. This Agreement constitutes the entire understanding between the parties with respect to the subject matter and supersedes all prior agreements and negotiations.
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 instrument. Signatures delivered by PDF or electronic signature service (e.g., DocuSign) are deemed originals.
16.7 Notices. All notices must be in writing and delivered (i) by certified mail (return receipt requested), (ii) recognized overnight courier, or (iii) email with confirmation of receipt, to the addresses set forth below (or as later changed by notice). Notice is effective on the date of delivery (or attempted delivery, if refused).
16.8 Force Majeure. Neither party shall be liable for failure to perform caused by events beyond its reasonable control, including acts of God, war, terrorism, governmental action, epidemics, or natural disasters, provided the affected party gives prompt written notice and resumes performance as soon as practicable.
17. EXECUTION BLOCK
IN WITNESS WHEREOF, the parties have executed this Property Management Agreement as of the Effective Date.
OWNER:
[PROPERTY OWNER LEGAL NAME]
By: ____
Name: ____
Title: ____
MANAGER:
[PROPERTY MANAGER LEGAL NAME]
By: ____
Name: ____
Title: ____
Date: _________
[NOTARIZATION BLOCK (if required under VA law for recordable memorandum or for Owner’s entity authorization)]
[// GUIDANCE:
1. Insert schedules (e.g., Schedule 1 – Fee Schedule; Schedule 2 – Service Contracts in Place; Schedule 3 – Form Lease) as needed.
2. Consider recording a Memorandum of Management Agreement if required by lenders or for notice purposes.
3. Review VRLTA updates annually for mandatory disclosure or procedural changes.
4. For mixed-use or commercial properties, modify leasing statutes references accordingly.
5. Confirm local (city/county) ordinances on rental inspection programs.]