What is a typical property management fee?

Residential property management fees typically range from 8–12% of monthly collected rent, with 10% being the most common benchmark. Some managers charge flat monthly fees ranging from $75–$300 depending on the market and property type. Most managers also charge a lease-up or tenant placement fee (often one-half to one full month's rent) when they find and place a new tenant. Fees for commercial and vacation rental properties vary more widely.

What is a maintenance approval threshold?

The maintenance approval threshold is the maximum dollar amount a property manager may spend on a single repair or maintenance item without first obtaining the owner's written approval. A threshold of $300–$500 is common for residential properties. Emergency repairs (such as a burst pipe or heating failure in winter) are typically excluded from this limit and may be authorized by the manager regardless of cost, with prompt notification to the owner.

Can the property manager sign leases on the owner's behalf?

Yes, if the property management agreement expressly grants this authority. Most management agreements authorize the manager to execute leases on the owner's behalf as the owner's agent. The owner should review and approve the standard lease form used by the manager and set clear parameters for lease terms, rent rates, and tenant qualification criteria.

How should security deposits be handled under a property management agreement?

Security deposits collected from tenants must be held in a separate trust or escrow account, not commingled with the manager's or owner's personal funds. State laws strictly regulate security deposit handling, including deadlines for returning deposits (typically 14–30 days after move-out), itemized deduction requirements, and penalties for non-compliance. The management agreement should specify who holds the security deposit and how it is accounted for.

How do I terminate a property management agreement?

Most agreements require 30–90 days' written notice to terminate. Review the agreement carefully for any termination penalties or early exit fees. Upon termination, the manager must transfer all tenant files, leases, accounting records, security deposits, and reserve funds to the owner or the new manager. Some agreements prohibit the owner from hiring the manager's employees or contractors for a specified period.

Free Property Management Agreement Template — Fill Out & Download Instantly

Free — No Sign-Up RequiredPDF & WordUpdated April 4, 2026

⚠️ Legal Disclaimer: This template is attorney-reviewed and built to US legal standards. It does not substitute for professional legal advice. For complex situations, we recommend consulting a licensed attorney.

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Governing State*

The state where the managed property is located

Property Owner Name*

Owner Mailing Address*

Property Manager / Company Name*

Manager Business Address*

Property Address*

Property Type*

Management fee structure, lease-up fees, and other charges

Management Fee Structure*

Fee Amount or Percentage*

Maintenance Approval Threshold*

Maximum amount manager may spend on repairs without owner approval

Owner Reserve Fund (Minimum Balance)*

Minimum balance owner must maintain for operating expenses

Manager Duties*

Manager is authorized to screen and approve tenants

Manager is authorized to coordinate maintenance and repairs

Accounting and Reporting Frequency*

Agreement Term*

Termination Notice Period*

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PROPERTY MANAGEMENT AGREEMENT

This Property Management Agreement ("Agreement") is entered into as of the date last signed below, by and between:

OWNER: [Property Owner Name], with a mailing address of [Owner Mailing Address] ("Owner"); and

MANAGER: [Property Manager / Company Name], with a business address of [Manager Business Address] ("Manager").

1. PROPERTY

Owner hereby appoints Manager as the exclusive managing agent for the property located at [Property Address], classified as [Property Type] ("Property"), for the term of this Agreement.

2. TERM

This Agreement shall be in effect for [Agreement Term]. Either party may terminate this Agreement by providing [Termination Notice Period] written notice to the other party. Owner may terminate immediately for cause, including Manager's fraud, gross negligence, or material breach.

3. MANAGEMENT DUTIES

Manager shall perform the following services on behalf of Owner: [Manager Duties].

3.1 Tenant Screening. Manager is authorized to advertise vacancies, screen prospective tenants (including credit, background, and income verification), and execute leases on Owner's behalf, provided leases comply with applicable fair housing laws and Owner's stated rental criteria.

3.2 Maintenance and Repairs. Manager is authorized to arrange for ordinary and necessary maintenance and repairs to the Property. Manager shall obtain Owner's prior written approval before authorizing any single repair or expenditure exceeding $[Maintenance Approval Threshold], except in the case of emergency repairs necessary to protect the Property or tenants' safety.

4. MANAGEMENT FEE

5. OWNER RESERVE FUND

Owner shall maintain a reserve fund of no less than $[Owner Reserve Fund (Minimum Balance)] in the property management trust account at all times. Manager shall notify Owner promptly if the reserve falls below this amount. Owner shall replenish the reserve within 10 business days of such notice.

6. ACCOUNTING AND REPORTING

Manager shall provide Owner with a detailed accounting of all income and expenses relating to the Property on a [Accounting and Reporting Frequency] basis. Manager shall maintain accurate records of all transactions for a minimum of five (5) years.

7. OWNER'S RESPONSIBILITIES

Owner shall: (a) maintain hazard and liability insurance on the Property in amounts sufficient to protect against loss; (b) inform Manager of all known defects or hazards affecting the Property; (c) comply with all applicable laws and codes regarding the Property; and (d) maintain sufficient funds in the reserve account.

8. FAIR HOUSING COMPLIANCE

Manager shall conduct all management activities in compliance with the Fair Housing Act (42 U.S.C. § 3604), the Americans with Disabilities Act, and all applicable state and local fair housing laws. Manager shall not discriminate in tenant selection based on race, color, religion, national origin, sex, familial status, disability, or any other protected class.

9. GOVERNING LAW

This Agreement shall be governed by the laws of the State of [Governing State]. Any disputes shall be resolved in the courts of [Governing State].

10. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties and supersedes all prior understandings regarding the management of the Property.

OWNER:

Signature: ___________________________ Date: ___________

Printed Name: [Property Owner Name]

MANAGER:

Signature: ___________________________ Date: ___________

Printed Name / Entity: [Property Manager / Company Name]

Document Completeness0%

Governing State*

The state where the managed property is located

Property Owner Name*

Owner Mailing Address*

Property Manager / Company Name*

Manager Business Address*

Property Address*

Property Type*

Management fee structure, lease-up fees, and other charges

Management Fee Structure*

Fee Amount or Percentage*

Maintenance Approval Threshold*

Maximum amount manager may spend on repairs without owner approval

Owner Reserve Fund (Minimum Balance)*

Minimum balance owner must maintain for operating expenses

Manager Duties*

Manager is authorized to screen and approve tenants

Manager is authorized to coordinate maintenance and repairs

Accounting and Reporting Frequency*

Agreement Term*

Termination Notice Period*

What Is a Property Management Agreement?

A Property Management Agreement is a contract between a property owner and a professional property manager or management company that defines the scope of management services, fee structure, authority limits, and reporting obligations. This agreement establishes the manager's duties — including tenant screening, lease execution, rent collection, maintenance coordination, and financial accounting — and sets clear boundaries on spending authority without owner approval. Our free template supports both percentage-based and flat-fee management structures, and includes optional provisions for lease-up fees, maintenance approval thresholds, owner reserve funds, and tenant screening policies.

When Do You Need It?

You need a Property Management Agreement whenever you hire a property manager or management company to oversee a rental property on your behalf. Common situations include: hiring a management company to handle a single-family rental while you live out of state; engaging a manager for a multi-unit residential apartment building; retaining a commercial property management firm for an office or retail property; or formalizing an arrangement with a property manager who was previously operating on an informal basis. A written agreement is essential to define the manager's authority and protect the owner from unauthorized expenditures..

What's Included in This Template

Property owner and manager identification
Property address and type
Management fee structure (percentage or flat fee)
Lease-up and vacancy fee provisions
Maintenance and repair spending authority
Owner reserve fund requirements
Scope of management duties
Tenant screening authorization
Maintenance coordination policy
Accounting and reporting frequency
Agreement term and termination provisions
Manager license number (optional)
Governing law
Signature blocks for both parties

How to Fill It Out

Select the Governing State — Choose the state where the managed property is located. Property management is a licensed profession in most states, and managers must hold a valid real estate broker's or property manager's license.

Enter Owner and Manager Information — Provide the full legal names and addresses of the property owner and the management company or individual manager. Include the manager's state license number if applicable.

Describe the Property — Enter the full street address and select the property type. The agreement should clearly identify the specific property being managed.

Set the Management Fee — Choose whether the management fee will be a percentage of collected rents or a flat monthly fee. Enter the applicable rate or dollar amount. Typical residential property management fees range from 8–12% of monthly rent.

Define Spending Authority and Reserve Fund — Set the maximum amount the manager may spend on repairs or maintenance without prior owner approval. Establish the minimum owner reserve fund to be maintained for operating expenses.

Configure Duties and Reporting — Specify the manager's duties including tenant screening, maintenance coordination, and rent collection. Select the accounting and reporting frequency to keep the owner informed of property performance.

Legal Requirements & Notes

Property management is regulated by state real estate licensing laws in most U.S. states. Key legal considerations: (1) Licensing — property managers who collect rent, negotiate leases, or manage properties for others are typically required to hold a real estate broker's license or a dedicated property manager's license; operating without a license may be illegal and render the agreement void; (2) Fair Housing Act (42 U.S.C. § 3604) — managers must comply with federal and state fair housing laws in all tenant screening and lease enforcement activities; (3) Trust accounts — most states require property managers to maintain separate trust (escrow) accounts for client funds; commingling of client and personal funds is prohibited; (4) Security deposit handling — state statutes strictly regulate how security deposits are held, documented, and returned; violations can result in penalties of 2–3× the deposit amount; (5) Agency law — the property manager acts as the owner's agent and owes fiduciary duties including loyalty, disclosure, and care; (6) EPA Lead RRP Rule — properties built before 1978 require lead-safe practices during renovation. This template is for informational purposes and does not constitute legal advice. Consult a licensed real estate attorney in your state.

Frequently Asked Questions

In most states, yes. Property managers who perform activities such as leasing, collecting rent, or negotiating contracts on behalf of property owners are required to hold a real estate broker's license or a property manager's license. A few states (such as Idaho and Maine) have limited or no licensing requirements. Hiring an unlicensed manager where licensure is required can void the management agreement and expose the owner to liability.