What is Included in a Property Management Agreement?

When you hire a property manager, or you already work with one, there’s one document that matters more than anything else: The Property Management Agreement (PMA).

This contract sets the rules, responsibilities, and expectations for both the landlord and the property manager. It explains what the manager will handle, what they won’t do, how much you pay, and what legal protections you get. So, think of it as the “rulebook” for your rental property.

But here’s the truth:

Most landlords never read the agreement closely; they just sign these agreements without understanding the details. And that’s where problems, disputes, and expensive surprises start.

This blog breaks everything down, so you know exactly what should be included in a property management agreement and what to look for before you sign it.

Whether you own one rental in Oklahoma City, 10 units in Edmond, or a small portfolio across the U.S., this article will give you clarity and confidence.

Let’s dive in.

What Is a Property Management Agreement?

A property management agreement is a legally binding contract between a property owner (you) and a property management company. It outlines:

• The manager’s responsibilities
• Your responsibilities
• How money is handled
• Fees and payment terms
• Maintenance rules
• Legal authority
• Communication expectations
• Termination terms

If the rental property is a business, the management agreement is your operating manual.

Most agreements cover everything from rent collection to tenant screening, maintenance, inspections, and compliance with state landlord-tenant laws.

Why This Agreement Matters So Much

Think of a PMA like the owner’s manual for your rental property relationship.

It tells you:

• Who handles what
• How your money is managed
• When and how communication happens
• What a property manager is legally allowed to do
• How issues, repairs, and evictions are handled
• How to get out of the contract if things go wrong

A good agreement protects you. A vague or sloppy agreement puts your investment at risk.

In Oklahoma and across the U.S., property management is heavily influenced by Fair Housing Laws, trust account regulations, and state landlord-tenant regulations, so having everything written clearly is essential.

According to Buildium’s property management industry report, 81% of landlords rely on property managers because of the expertise, legal compliance, and reduced stress they provide.

But that only works when the agreement is detailed and transparent.

What’s Included In a Property Management Agreement?

Below is a complete list of what a typical management contract includes. Every section is explained, so you can quickly understand what each part means.

1. Property Details & Parties Involved

A PMA starts with basic but important information:

• Property owner’s legal name
• Property manager or management firm
• Property address(es)
• Type of property (Single-family home, duplex, condo, multifamily, etc.)
• Number of units
• Whether the manager oversees the entire property or only specific units
• Start and end date of the agreement

Why it matters: Clear property details help prevent misunderstanding about what the manager is responsible for.

2. Scope of Property Management Services

This is the heart of the agreement. It outlines everything the property manager is responsible for. Here are the major tasks included in most contracts:

A. Tenant Screening and Placement

This is one of the most important sections because it protects you legally. Most agreements include:

• Advertising the rental
• Conducting property showings
• Screening applications
  • Credit checks
  • Background checks
  • Rental history
  • Income verification
  • Lease signing and move-in paperwork

Why this matters: Fair Housing Act compliance is mandatory nationwide. Any screening that appears discriminatory puts landlords at risk.

Good managers include the exact screening criteria to protect owners.

Tip: Make sure the agreement states whether there’s an extra tenant placement fee, because most companies charge one.

B. Rent Collection and Financial Management

A good agreement covers:

• How rent is collected (online portal, direct deposit, etc.)
• Grace periods and late fees
• How unpaid rent is handled
• How and when you receive monthly payouts
• Security deposit management
• Bookkeeping and monthly financial statements

Industry standard reality: Most U.S. property managers use electronic rent systems, and over 70% of tenants now pay rent online (Buildium 2024 data).

Pro Tip: Ensure it specifies whether the manager holds deposits in a separate trust account (escrow), which is required in many states.

C. Maintenance and Repairs

This section should be extremely detailed because it prevents 99% of landlord-manager disputes. It usually includes:

• Routine maintenance
• Emergency repairs
• Vendor coordination
• Property inspections
• Owner approval thresholds (example: “Owner approval required for repairs above $300”)
• How repair bills are paid

A quality agreement defines:

• What counts as an emergency
• How fast emergencies are handled
• Approved vendor lists
• Whether you can use your own contractors
• Whether the manager upcharges for maintenance

Data Point: According to the National Association of Residential Property Managers (NARPN), maintenance accounts for nearly 60% of communication between managers and tenants, so clarity here is essential. Also Buildium report shows that over 38% of maintenance requests are HVAC or plumbing.

D. Tenant Relations and Communication

This usually includes:

• Responding to tenant questions
• Handling complaints
• Managing move-ins and move-outs
• Enforcing the lease
• Coordinating notices

The agreement should mention how the manager interacts with tenants and how communication is documented.

E. Lease Enforcement & Legal Compliance

Most property management agreements include:

• Serving notices (late rent, lease violations, renewals, etc.)
• Coordinating with attorneys for evictions
• Ensuring compliance with state and federal landlord-tenant laws
• Monitoring for fair housing compliance

Important entities often included for compliance:

• HUD (U.S. Department of Housing and Urban Development)
• Fair Housing Act (FHA)
• Americans with Disabilities Act (ADA)

Pro Tip:

Ask: “Do you attend court on my behalf, or do I?”

Because some companies only coordinate legal action, while others fully handle it.

F. Property Inspections

The agreement should list:

• Move-in inspections
• Move-out inspections
• Annual or semi-annual routine inspections
• How inspection reports are delivered

Most professional managers provide digital inspection reports with timestamped photos. This protects you from security deposit disputes and property damage.

G. Accounting, Reporting & Recordkeeping

This section explains how your money and records are handled. This includes:

• Monthly income and expense statements
• Year-end financial summaries
• 1099 tax forms
• Maintenance receipts
• Online owner portal access

Trust accounts are required in Oklahoma and most states; your PMA should confirm how funds are stored. Solid financial reporting helps you track your rental performance and simplifies tax season.

3. Fees and Payment Terms

Property management fees can be simple or extremely confusing. This section outlines everything you’ll pay for.

Common fees listed in a property management agreement:

A. Monthly Management Fee

Usually, 8%-12% of the collected rent.

B. Tenant Placement Fee

Often 50%-100% of one month’s rent.

C. Lease Renewal Fee

Typically $75-$200 or a percentage of monthly rent.

D. Maintenance Coordination Fee

Some companies charge a small percentage on top of vendor invoices.

E. Eviction Coordination Fee

Usually $100-$500 plus legal costs.

F. Onboarding or Setup Fee

Some companies charge a $100-$300 one-time fee for account setup. (At OKC Home Realty Services, this may be $0 depending on the service level.)

G. Vacancy Fee

Not all companies charge this, but if they do, it should be clearly stated.

H. Miscellaneous Fees (Varies by Company)

• Inspection fees
• Marketing fees
• Bill-pay fees
• Admin fees

Tip: Always look for a “Fee Schedule” section. Everything should be itemized.

4. Owner Responsibilities and Obligations

The contract doesn’t just list what the manager must do. It also lists what you must handle.

Most agreements require owners to:

• Maintain adequate landlord insurance
• Keep the property in habitable condition
• Approve major repairs when needed
• Fund a reserve account for repairs (often $200-$500)
• Provide required documentation (W-9, HOA rules, warranties, etc.)

What the owner cannot do (usually):

• Contact tenants directly
• Overrule the manager on legal issues
• Enter the property without notice
• Perform repairs without notifying the manager

Helpful Note:

Clear separation prevents miscommunication and protects you from liability. If the owner (You) doesn’t uphold these responsibilities, it ties the manager’s hands.

5. Authority and Legal Power of the Manager

This section explains what the property manager is authorized to do on your behalf. It might include authority to:

• Sign leases
• Collect rent
• Manage security deposits
• Hire contractors
• Serve legal notices
• Access the property

Make sure the contract defines limits, for example:

• The manager cannot approve repairs over $500 without owner approval.
• The manager cannot hire vendors unrelated to property maintenance.

This protects you from unexpected decisions and costs.

6. Insurance Requirements

Most agreements include insurance obligations for both parties.

For Property Owners:

• Proof of landlord insurance
• Liability insurance limits
• Flood or hazard insurance (if required)

For Property Managers:

• Errors and omissions (E&0) insurance
• General liability insurance
• Workers’ compensation for employees

Why this matters: Insurance protects you from lawsuits or losses. For example, if a tenant slips and falls, liability coverage determines who pays for injuries.

7. Terms of Agreement & Termination Clauses

This section is extremely important. Most property management agreements include:

Contract Duration

• 1 year
• Month-to-month
• Auto-renewing clauses

Termination Rules

The contract should explain:

• How to end the agreement
• Required notice (usually 30-60 days)
• Whether termination fees apply
• What happens to existing tenants
• How security deposits are transferred

Common Termination Fees:

• $200-$500 flat fee
• Remaining months of management fees
• Loss of tenant placement fee

Beware: Some companies make termination difficult. Always read this part carefully.

8. Reserve Fund (Maintenance Reserve)

Most property management companies require owners to keep a reserve fund, usually $200-$500, to quickly handle repairs and emergency expenses.

The agreement explains:

• Minimum balance
• When the manager can use the funds
• How the account is replenished
• Whether owners receive notifications

This ensures tenants don’t wait days for repairs while the manager tries to reach you.

9. Handling Security Deposits

Security Deposits are highly regulated. The agreement should specify:

• Who holds the deposit (manager or owner)
• How deposits are stored
• How deductions are made
• When deposits must be returned
• Required move-out inspection process

In most states, deposits must be returned within 14–30 days after the tenant moves out. If the contract isn’t clear, you risk breaking the law.

10. Legal Compliance & Fair Housing Rules

The agreement must state that the manager follows:

• Fair Housing Act
• Local landlord-tenant laws
• ADA rules
• State eviction laws
• Lead-based paint disclosure laws (for homes built before 1978)

This protects you from lawsuits or discrimination claims.

11. Owner Access to Financial Reports & Records

Look for clauses explaining:

• Monthly statements
• Online portal access
• Annual reports
• Tax form preparation
• Record retention rules

This ensures transparency and makes tax season easier.

12. Property Marketing & Advertising Details

A strong agreement explains:

• Where the property will be advertised
  • Zillow
  • Realtor.com
  • Apartments.com
  • Facebook Marketplace
• Whether professional photos are included
• Whether yard signs are used
• How long do listings stay live

This section helps you understand how your property will attract tenants.

13. Renewal and Rent Increase Policies

The agreement should explain:

• How lease renewals are handled
• Whether the manager analyzes rent increases
• Market comparison process
• Notice periods required for rent adjustments

This ensures your rental stays competitive and profitable.

14. Eviction and Legal Proceedings

This part lists:

• Who handles court paperwork
• Who appears in court
• Eviction fees
• Required notice periods
• Legal strategies for nonpayment or lease violations

Evictions can be stressful; the agreement should clearly outline the process.

15. Property Owner Communication Expectations

Look for explanations of:

• How often does the manager communicate
• How quickly they respond to emergencies
• How repair notifications are sent
• How owners receive updates during vacancies

Some managers respond in minutes. Others take days. The contract tells you what to expect.

16. HOA Rules (If Applicable)

If your rental is in an HOA neighborhood, the agreement usually includes:

• How HOA notices are managed
• Whether the manager communicates with the HOA
• Who pays HOA fines
• Enforcement of HOA rules for tenants

Important: Tenants must follow HOA rules, but you are ultimately responsible for fines unless stated otherwise.

17. Guarantees or Service Commitments (If Offered)

Some property management companies offer:

• Eviction protection
• Tenant placement guarantees
• Maintenance warranties
• Rent-on-time guarantees

If these exist, they must be clearly written in the agreement, not just in marketing materials.

Common Red Flags to Watch for in a Property Management Agreement

Before you sign a property management contract, look out for these warning signs. If you notice more than one or two, it may be a sign to walk away:

• Vague or unclear language
• Hidden fees or extra charges not explained upfront
• No clear termination clause
• High or unfair termination penalties
• No requirement for owner approval on repairs
• Manager allowed to sign leases without your input
• Unlimited spending allowed from your reserve fund
• No set schedule for inspections
• Long auto-renewing contracts without proper notice
• No statement requiring compliance with Fair Housing laws

A good agreement should be transparent, easy to read, and protect both sides, especially you as the property owner. If something feels off, ask questions or consider another management company.

Practical Example: What a Good Management Agreement Looks Like

Example:

Your agreement says:

“Owner approval required for repairs exceeding $350 unless emergency maintenance is necessary to protect property or tenant safety.”

This is excellent because:

• You maintain control over major expenses
• There’s a clear threshold
• Emergency repairs won’t be delayed

Another Example:

“Monthly management fee equals 10% of collected rent only.”

This is clear, simple, and avoids confusion.

Why Understanding the Agreement Protects Your Investment?

A property management agreement isn’t just a formality. It’s the foundation of your rental business.

It determines:

• Your cash flow
• Your stress level
• Your legal protection
• Your tenant satisfaction
• Your long-term profitability

When the agreement is clear, detailed, and fair, you’ll have peace of mind knowing your investment is in good hands. And when you know exactly what’s included, you can prevent disputes, surprise fees, and costly mistakes.

If you’re a property owner or investor, take the time to read the agreement line by line. If anything feels unclear, ask questions.

A good property manager will always explain things openly.

At OKC Home Realty Services, we’re committed to transparency, clear communication, and Oklahoma-focused expertise. Our property management agreement lays out everything in simple, straightforward language, so you always know where your money is going and how your property is being cared for.

If you’re a landlord in Oklahoma City, Edmond, Norman, Yukon, Moore, Midwest City, or surrounding areas and want a management agreement you can trust, we’re here to help.

FAQs About Property Management Agreements