PROPERTY MANAGEMENT AGREEMENT

(Washington)

[// GUIDANCE: This template is drafted for use in the State of Washington and is intended for residential and/or commercial income-producing properties. It presumes that the Manager is a Washington-licensed real estate firm or managing broker and that the Owner is the fee-simple owner of record. All bracketed text must be customized before execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Appointment & Scope of Authority
4. Manager’s Duties
5. Owner’s Duties
6. Compensation & Expenses
7. Trust Accounts & Client Funds
8. Licensure & Regulatory Compliance
9. Insurance Requirements
10. Representations & Warranties
11. Covenants
12. Term; Renewal; Termination
13. Default & Remedies
14. Risk Allocation
15. Dispute Resolution
16. General Provisions
17. Execution Block

(Hyper-linked table of contents is optional in print format.)

1. DOCUMENT HEADER

1.1 Parties.
This Property Management Agreement (“Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [LEGAL NAME OF PROPERTY OWNER], a [STATE & ENTITY TYPE] (“Owner”), and [LEGAL NAME OF PROPERTY MANAGER], a Washington-licensed [real estate brokerage/managing broker] (“Manager”). Owner and Manager are each a “Party” and collectively the “Parties.”

1.2 Property.
Owner is the fee-simple owner of the real property and improvements commonly known as [STREET ADDRESS, CITY, WA ZIP] and legally described on Exhibit A (the “Property”).

1.3 Consideration & Purpose.
Owner desires to engage Manager, and Manager desires to accept such engagement, to manage, operate, control, rent, and lease the Property, all upon the terms and conditions set forth herein.

2. DEFINITIONS

For ease of reference, capitalized terms have the meanings assigned below; terms defined elsewhere have the same meaning throughout.

“Applicable Law” means all federal, state, county, and municipal statutes, regulations, ordinances, codes, and common-law doctrines governing the Property, the tenancy, or the services rendered hereunder, including without limitation Washington real estate licensing statutes (currently codified in Chapter 18.85 RCW), agency disclosure requirements, and trust-account regulations promulgated by the Washington Department of Licensing.

“Approved Expense” means any cost or charge (a) specifically authorized in Section 6.3; or (b) approved in writing by Owner in advance; or (c) required by an emergency under Section 4.2(e).

“Client Funds” means all tenant security deposits, rents, fees, or other monies received in connection with the Property and belonging to Owner or a tenant.

“Management Fee” has the meaning given in Section 6.1.

“Operating Account” means a demand deposit account maintained by Manager for the benefit of Owner, separate from any trust account, into which rental proceeds are transferred after reconciliation.

“Trust Account” means a Washington trust account established and maintained by Manager in compliance with Applicable Law for the sole purpose of holding Client Funds.

[Add additional definitions as needed.]

3. APPOINTMENT & SCOPE OF AUTHORITY

3.1 Exclusive Appointment.
Owner hereby engages Manager as sole and exclusive agent to manage the Property during the Term, and Manager accepts such appointment, subject to the limitations set forth herein.

3.2 Agency Relationship.
Manager shall act as Owner’s [limited/dual] agent in leasing and managing the Property, shall provide the statutory “Real Estate Brokerage Services Agreement” disclosure to Owner, and shall provide the required “Agency Law Pamphlet” to each prospective tenant when applicable.

[// GUIDANCE: Washington now follows a transactional agency regime; modify agency language to fit your brokerage model.]

3.3 Delegation.
Manager may delegate duties to properly licensed employees or contractors but remains liable for their compliance.

3.4 Limitations on Authority.
Manager may not:
a. Sell or encumber the Property;
b. Incur any single expense exceeding $[DOLLAR AMOUNT] without prior written consent, except as permitted in Section 4.2(e);
c. Initiate litigation in Owner’s name without written authorization, except for routine unlawful-detainer actions.

4. MANAGER’S DUTIES

4.1 Ordinary Course Duties. Manager shall:
a. Market the Property and screen prospective tenants in accordance with fair-housing laws;
b. Negotiate, execute, renew, and terminate leases on Owner’s behalf using forms approved by Owner;
c. Collect rents and other charges when due;
d. Conduct periodic inspections and prepare written reports to Owner at [FREQUENCY] intervals;
e. Coordinate routine maintenance and repairs and obtain lien waivers when applicable;
f. Keep complete and accurate books and records in accordance with Generally Accepted Accounting Principles (GAAP) and Applicable Law;
g. Remit monthly statements and net proceeds to Owner no later than the [DAY] day of the following month.

4.2 Extraordinary Duties.
a. Capital Improvements. Manager shall not undertake capital projects in excess of $[CAPITAL LIMIT] without Owner’s written approval.
b. Legal Proceedings. Manager shall promptly advise Owner of tenant defaults and shall coordinate with legal counsel designated by Owner.
c. Governmental Compliance. Manager shall coordinate inspections, registrations, or licensing (e.g., Seattle RRIO) and pass through associated fees as Approved Expenses.
d. Environmental Matters. Manager shall notify Owner of any suspected environmental hazard and cooperate with remediation efforts as directed by Owner.
e. Emergency Expenditures. In events posing imminent risk to persons or property, Manager may make expenditures reasonably necessary to mitigate such risk, notifying Owner within [24] hours.

5. OWNER’S DUTIES

5.1 Information & Cooperation.
Owner shall timely provide Manager with all documentation, records, access, and authority reasonably requested to perform hereunder.

5.2 Funding Obligations.
Owner shall maintain a minimum reserve of $[RESERVE AMOUNT] in the Operating Account for ordinary operating expenses and shall promptly reimburse Manager for any Approved Expense advanced by Manager on Owner’s behalf.

5.3 Insurance.
Owner shall maintain, at its sole cost, (a) all-risk property insurance covering at least the full replacement value of the Property; and (b) commercial general liability insurance with limits not less than $[LIMIT] per occurrence, naming Manager as an additional insured.

5.4 Legal Compliance.
Owner warrants that the Property is in compliance with all building, zoning, housing, and environmental codes and that no known conditions exist that would materially interfere with residential or commercial tenancy.

6. COMPENSATION & EXPENSES

6.1 Management Fee.
Owner shall pay Manager a monthly management fee equal to [PERCENT]% of Gross Rents collected (the “Management Fee”).

6.2 Leasing Fee.
For each new tenancy procured, Owner shall pay a leasing fee of [AMOUNT OR %] of the first full month’s rent, due upon execution of the lease.

6.3 Approved Expenses & Reimbursements.
Owner shall be responsible for and shall reimburse Manager for: (a) routine maintenance and repair costs; (b) utilities not paid directly by tenants; (c) governmental fees; and (d) any other Approved Expense.

6.4 Late Fees; NSF.
Late fees, non-sufficient-funds charges, and similar tenant penalties shall be collected by Manager and retained [in full / divided % to Manager, % to Owner].

7. TRUST ACCOUNTS & CLIENT FUNDS

7.1 Trust Account Requirement.
Manager shall deposit all Client Funds into a designated Trust Account in a Washington-chartered financial institution, titled in accordance with Applicable Law, within one (1) banking day of receipt.

7.2 Recordkeeping & Reconciliation.
Manager shall maintain complete trust-account ledgers and perform monthly reconciliations, retaining records for not less than six (6) years or as otherwise required by Applicable Law.

7.3 Security Deposits.
Security deposits shall remain in the Trust Account until legally disbursed. Manager shall perform all move-in/move-out inspections, prepare itemized deposit accounting, and issue refunds or claims in compliance with RCW 59.18 (Residential Landlord-Tenant Act) or other applicable statutes.

7.4 Audit Rights.
Owner or Owner’s designated auditor may inspect the Trust Account records upon five (5) business days’ written notice, during normal business hours, at Owner’s sole cost.

8. LICENSURE & REGULATORY COMPLIANCE

8.1 Licensing.
Manager certifies that it holds, and during the Term will maintain, all licenses and endorsements required under Chapter 18.85 RCW and related Washington Administrative Code provisions.

8.2 Continuing Education & Supervision.
Manager shall ensure that all affiliated licensees meet continuing-education requirements and that the designated broker provides active supervision.

8.3 Agency Disclosure.
Manager shall deliver all statutory agency disclosures to tenants and prospective tenants and shall secure written acknowledgments as required.

9. INSURANCE REQUIREMENTS

9.1 Manager Insurance.
Manager shall maintain (a) professional liability/errors & omissions insurance with limits not less than $[LIMIT] per claim; and (b) fidelity bond coverage of at least $[LIMIT] covering all employees handling Client Funds.

9.2 Waiver of Subrogation.
Each Party waives, and shall cause its insurers to waive, subrogation rights against the other Party to the extent permitted by policy terms and Applicable Law.

10. REPRESENTATIONS & WARRANTIES

10.1 Mutual.
Each Party represents that (a) it has full power and authority to enter into and perform this Agreement; (b) the execution has been duly authorized; and (c) the Agreement is enforceable against it in accordance with its terms.

10.2 Owner Specific.
Owner further represents that:
i. Owner has good and marketable title to the Property;
ii. No pending or threatened litigation or condemnation affects the Property;
iii. All loan instruments permit professional management.

10.3 Manager Specific.
Manager further represents that:
i. Manager is duly licensed and in good standing;
ii. Manager is not subject to any disciplinary action that would impair performance;
iii. All personnel performing on Manager’s behalf are properly trained and supervised.

10.4 Survival.
All representations and warranties survive termination for a period of two (2) years.

11. COVENANTS

11.1 Compliance with Laws.
Manager shall comply with all Applicable Law, including, without limitation, fair-housing, landlord-tenant, antitrust, and consumer-protection statutes.

11.2 Books & Records.
Manager shall keep the books, records, and supporting documentation described in Section 4.1(f) and make the same available to Owner within five (5) business days of request.

11.3 Confidentiality.
Both Parties shall keep confidential any non-public information obtained under or in connection with this Agreement, except as legally compelled or as necessary to perform hereunder.

11.4 Non-Solicitation.
Owner agrees not to solicit or hire any of Manager’s employees directly involved in managing the Property during the Term and for twelve (12) months thereafter.

12. TERM; RENEWAL; TERMINATION

12.1 Initial Term.
The initial term begins on the Effective Date and continues for [ONE (1) YEAR] (the “Initial Term”) unless earlier terminated.

12.2 Renewal.
After the Initial Term, the Agreement automatically renews for successive [ONE (1)-YEAR] periods (each a “Renewal Term”) unless either Party gives at least sixty (60) days’ written notice of non-renewal.

12.3 Termination for Cause.
Either Party may terminate upon thirty (30) days’ written notice if the other Party materially breaches this Agreement and fails to cure within fifteen (15) days after written notice specifying the breach.

12.4 Termination Without Cause.
Owner may terminate without cause upon ninety (90) days’ prior written notice, subject to payment of all accrued fees and a termination fee equal to [ONE (1) MONTH] of the average Management Fee.

12.5 Duties on Termination.
Upon termination, Manager shall:
a. Provide a final accounting within thirty (30) days;
b. Transfer Client Funds and tenant records as directed by Owner;
c. Assign all leases and service contracts to Owner or Owner’s designee.

Owner shall promptly reimburse Manager for any Approved Expenses incurred through the termination date.

13. DEFAULT & REMEDIES

13.1 Events of Default.
Each of the following constitutes an “Event of Default”:
a. Failure to remit payments when due;
b. Failure to perform any material covenant, condition, or agreement and continuation thereof beyond applicable cure periods;
c. Bankruptcy or insolvency;
d. Loss, suspension, or expiration of Manager’s real estate license.

13.2 Remedies.
Upon an Event of Default, the non-defaulting Party may, in addition to any other remedies available at law or equity:
i. Terminate this Agreement immediately by written notice;
ii. Offset amounts due against any monies otherwise payable;
iii. Obtain specific performance or injunctive relief;
iv. Recover actual damages, including reasonable attorney fees and costs.

13.3 Cumulative Remedies; Mitigation.
Remedies are cumulative. The non-defaulting Party shall use commercially reasonable efforts to mitigate damages.

14. RISK ALLOCATION

14.1 Indemnification by Manager.
Manager shall indemnify, defend, and hold Owner, its members, managers, officers, and employees harmless from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable attorney fees) arising out of (a) Manager’s gross negligence or willful misconduct; (b) breach of this Agreement; or (c) violation of Applicable Law.

14.2 Limitation of Liability.
EXCEPT FOR (i) MANAGER’S INDEMNITY OBLIGATIONS UNDER SECTION 14.1; (ii) CLAIMS COVERED BY INSURANCE; OR (iii) MANAGER’S FRAUD OR WILLFUL MISCONDUCT, THE TOTAL AGGREGATE LIABILITY OF MANAGER UNDER THIS AGREEMENT SHALL NOT EXCEED THE MANAGEMENT FEES ACTUALLY PAID TO MANAGER DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

14.3 Waiver of Consequential Damages.
Neither Party shall be liable to the other for consequential, incidental, special, punitive, or exemplary damages, except to the extent such damages are awarded to a third party and are subject to indemnification hereunder.

14.4 Force Majeure.
A Party is excused from performance to the extent prevented by acts of God, war, terrorism, pandemic, governmental order, labor disturbance, or other events beyond reasonable control, provided it uses diligent efforts to resume performance.

15. DISPUTE RESOLUTION

15.1 Governing Law.
This Agreement shall be governed by and construed in accordance with the real estate laws of the State of Washington, without regard to its conflict-of-law rules.

15.2 Forum Selection.
The Superior Court of [COUNTY], Washington shall have exclusive jurisdiction and venue over any action arising out of or relating to this Agreement.

15.3 Arbitration.
[OPTIONAL] Upon written election by either Party delivered within thirty (30) days after the filing of litigation, the dispute shall be resolved by binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.

15.4 Jury Trial Waiver.
[OPTIONAL] EACH PARTY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT.

15.5 Injunctive Relief.
Notwithstanding the foregoing, either Party may seek temporary, preliminary, or permanent injunctive relief or other equitable remedies in a court of competent jurisdiction to preserve the status quo or prevent irreparable harm.

15.6 Attorney Fees.
The prevailing Party in any dispute shall be entitled to recover its reasonable attorney fees and costs, including fees on appeal and in bankruptcy.

16. GENERAL PROVISIONS

16.1 Notices.
All notices must be in writing and delivered (a) by personal delivery; (b) by nationally-recognized overnight courier; (c) by certified mail, return receipt requested; or (d) by email with confirmed receipt, to the addresses set forth below or such other address as a Party may designate in writing.

16.2 Amendment; Waiver.
No amendment or waiver is effective unless in a writing signed by the Party against whom it is enforced. Waiver of any breach is not waiver of any other breach.

16.3 Assignment.
Manager may not assign this Agreement without Owner’s prior written consent, except to an affiliated entity under common ownership and properly licensed. Owner may freely assign to a successor owner of the Property upon notice to Manager.

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

16.5 Severability.
If any provision is held unenforceable, the remaining provisions remain in full force, and the unenforceable provision shall be reformed to the minimum extent necessary to render it enforceable.

16.6 Entire Agreement.
This Agreement (including Exhibits) constitutes the entire agreement between the Parties and supersedes all prior understandings relating to its subject matter.

16.7 Counterparts; Electronic Signature.
This Agreement may be executed in counterparts, each of which is an original and all of which together constitute one instrument. Signatures transmitted electronically or by facsimile are binding.

16.8 Interpretation.
Headings are for convenience only and do not affect interpretation. “Including” means “including without limitation.”

17. EXECUTION BLOCK

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

OWNER:

[NAME & TITLE]
[Entity Name]
Address: ____
Email: ______

MANAGER:

[NAME & TITLE, DESIGNATED BROKER]
[License No. _]
[Brokerage Name]
Address: ____
Email: _________

[OPTIONAL NOTARY BLOCK]
[// GUIDANCE: Use Washington notarial certificate if Owner signature is required to be notarized for recording or other purposes.]

EXHIBIT A

Legal Description of the Property

(Attach or insert complete legal description.)

EXHIBIT B

Management Fee Schedule & Expense Authorization Matrix

(Detail permitted ordinary expenses and approval thresholds.)

EXHIBIT C

Form Tenant Lease & Addenda

(Insert Owner-approved lease package.)

[// GUIDANCE:
1. Review city-specific rental ordinances (e.g., Seattle, Tacoma, Spokane) for supplemental requirements.
2. Confirm that Manager’s trust-account procedures align with the most current Washington Department of Licensing guidelines.
3. Consider adding data-security, privacy, or habitability warranty clauses if managing class-A multifamily properties.
4. For mixed-use or commercial assets, incorporate CAM reconciliation procedures and percentage-rent calculations.
5. Always attach and update exhibits prior to execution.]