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PROPERTY MANAGEMENT AGREEMENT Document updated:

February 2016

1. PARTIES
1. Owner:
2. Broker: acting through
FIRM NAME SALESPERSON

2. EMPLOYMENT
3. Owner employs and appoints Broker as Owner’s sole and exclusive agent to lease, operate and manage the Property located at:
4. Property Address:
5. City: County: AZ Zip:
6. Legal description: (“Property”), and any personal property
7. thereon as set forth on the attached addendum or , upon the following terms.

8. Addenda Incorporated: The following addenda are attached hereto and incorporated herein by reference:
9.
10.

11. Term: This Agreement shall commence on the day of , 20 (“Commencement

12. Date”) and shall end on the day of , 20 (“Termination Date”). This
13. Agreement shall renew automatically for a period of months years unless otherwise cancelled or terminated
14. as provided for herein. Broker shall send Owner a reminder notice at least thirty (30) days prior to each renewal date.

15. This Agreement shall be immediately and automatically terminated by: (i) the sale, transfer or other disposition of legal and beneficial
16. title to the Property, except for a transfer of the Property to a trust or other legal entity controlled solely by Owner; (ii) condemnation
17. of the Property or (iii) complete destruction of the Property.

18. Cancellation: Either party may cancel this Agreement upon thirty (30) days notice or .
19. If Owner cancels this Agreement prior to the Termination Date or any extension thereof, Owner shall pay Broker an early
20. cancellation fee of .

21. Broker may cancel this Agreement immediately by notice to Owner in the event that: (i) a notice of trustee’s sale or judicial
22. foreclosure is recorded against the Property; (ii) Owner fails or refuses to comply with any rule, order, determination, code, ordinance
23. or law of any governmental authority; (iii) Owner refuses to correct a hazardous condition on the Property.

24. Either party may cancel this Agreement immediately by notice to the other party in the event a petition in bankruptcy is filed by or
25. against either Owner or Broker, or in the event that either makes an assignment for the benefit of creditors or takes advantage of any
26. insolvency act.

27. Upon cancellation of this Agreement, Owner shall assume all contractual obligations and payment of all outstanding amounts due
28. pertaining to the Property or arising from this Agreement. Broker may withhold funds as permitted by law to pay any amounts due,
29. expenses previously incurred but not yet invoiced, and to close accounts. Broker shall deliver to Owner the balance of any monies
30. due Owner, held by Broker, as well as a final accounting reflecting the balance of income and expenses as required by law.
31. Tenant Deposits Upon Termination/Cancellation: If this Agreement is terminated or cancelled for any reason other than trustee’s
32. sale, judicial foreclosure or other forfeiture by Owner, any refundable tenant deposits will be forwarded to the Owner after notice
33. has been given to the tenant as required by law. If this Agreement is terminated due to trustee’s sale, judicial foreclosure or other
34. forfeiture by Owner, any refundable tenant deposits due tenant shall be released to the tenant.

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Property Management Agreement • February 2016
Copyright © 2016 Arizona Association of REALTORS®. All rights reserved.

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3. BROKER RESPONSIBILITIES
35. Management and Leasing: Broker shall use its best efforts to:
36. (i) Manage, supervise the maintenance of, and operate the Property.
37. (ii) Lease or rent the Property, including negotiating for and entering into leases on behalf of Owner, for terms not in excess of:
38. days month(s) year(s) and rent in the amount of $ or as otherwise agreed
39. upon or accepted by Owner;
40. (iii) Collect rents, deposits, and other fees.

41. Marketing: Broker may advertise the Property for lease and place signs on the Property if permitted by the applicable rules and
42. regulations or governing homeowners’ association. Owner does does not authorize Broker to install and use a lockbox on the
43. Property containing the key to the Property. Owner acknowledges that a lockbox will permit access to the Property by other brokers,
44. with or without potential tenants. Owner further acknowledges that, from time to time, unauthorized persons may have gained access
45. to properties using lockboxes, and Broker is not insuring Owner or any occupant against theft, loss or vandalism resulting from
46. any access. Owner agrees that the Property will not be advertised through MLS unless Owner executes and delivers to Broker a
47. separate written agreement for listing the Property in the MLS.
48. (OWNER’S INITIALS REQUIRED)
OWNER OWNER

49. Tenant Performance: Broker shall make reasonable efforts to screen potential tenant(s) and to collect rents, but does not guarantee
50. future performance of tenant(s) and is not obligated to refund to Owner any compensation or commissions in the event of tenant breach.

51. Repair and Maintenance: Broker shall assist Owner in the employment and supervision of all labor and contractors required for
52. the repair and maintenance of the Property at Owner’s expense. All labor and contractors shall be deemed sub-contractors of the
53. Owner and not the Broker unless otherwise agreed in writing, and Broker shall not be liable or responsible for their acts, defaults
54. or negligence. Owner shall approve all expenditures in excess of $ for any one item, including repairs to
55. be paid by deductions from tenant’s deposits, except that no Owner approval shall be required for recurring operating expenses
56. or emergency repairs if in the sole discretion of the Broker such repairs are necessary to protect the Property from damage or to
57. maintain services to the tenant as required by the lease(s).

58. Property Management Trust Account: Broker shall deposit all Property rents, miscellaneous income, tenant security deposits and
59. Owner’s reserve funds into Broker Property Management Trust Account(s) (“PMTA”), which shall be maintained as required by law.
60. The PMTA may earn interest, which shall be paid to Broker as additional compensation for Broker’s services.

61. Disbursements: Broker shall disburse to Owner by the day of the month or the first business day thereafter, rent and
62. other funds due and collected, after deducting all fees, bills or other amounts due, Broker compensation, commissions, and other
63. operating expenses and funds required to maintain the reserve account. Broker shall not disburse tenant’s refundable security
64. deposits, prepaid rent or other prepaid funds to Owner until earned, unless instructed otherwise by Owner.

65. Accounting Report: Broker shall issue Owner a report with an accounting of all funds collected and/or disbursed on the Owner’s
66. behalf, including the balance of the tenant security deposits
67. monthly quarterly annually other or as otherwise required by law.

68. Tax Reporting: Broker shall report Owner income as required by law and issue Owner an IRS 1099 Miscellaneous Income form
69. for all funds received for tax purposes. Owner agrees to complete a W-9 or other applicable income reporting form with an accurate
70. Social Security Number or Tax Identification Number and address, in addition to any other requested information or required tax
71. reporting form, and to notify Broker if changes require the information to be updated.

72. Personal Information: Broker shall comply with all applicable laws concerning the retention and disclosure of personal and financial
73. information obtained from both Owner and tenant.

4. OWNER REPRESENTATIONS AND RESPONSIBILITIES

74. Owner Representation: Owner represents that (i) Owner has the legal authority to lease the Property, (ii) no other real estate
75. broker represents Owner in connection with the Property; (iii) there is no pending or anticipated sale, exchange, transfer, foreclosure,
76. bankruptcy or other proceeding that could affect the ability to lease the Property. Owner shall immediately notify Broker of any
77. changes in these representations.

78. Disclosure: Owner shall disclose in writing all material (important) facts regarding the Property to Broker, including all physical,
79. environmental, and other conditions that affect the Property and any violations of applicable building, zoning, fire, health, and safety
80. codes. Owner shall immediately notify Broker of any changes in the disclosures made herein or otherwise. Owner acknowledges that
81. the failure to make legally required disclosures may result in civil liability.
82. (OWNER’S INITIALS REQUIRED)
OWNER OWNER

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Property Management Agreement • February 2016
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83. Lead-Based Paint: Owner shall comply with all lead-based paint laws. If the Property was built prior to 1978, Owner shall notify Broker of any
84. known lead-based paint (“LBP”) or LBP hazards in the Property and provide Broker with any LBP risk assessments or inspections of the Property.
85. Further, Owner shall use EPA Lead-Safe certified contractors to perform renovation, repair or painting projects that disturb lead-based paint.

86. Swimming Pool Barrier Regulations: Owner, at Owner’s expense, shall comply with all applicable state, county, and municipal
87. swimming pool barrier laws or regulations prior to the Property being occupied.

88. Documentation: Owner shall provide to Broker copies of all relevant documents pertaining to the Property, including but not limited
89. to, covenants, conditions, and restrictions (CC&Rs), homeowners association governing documents, service contracts, leases/rental
90. agreements, notices of pending special assessments, association fees, claims or litigation, personal property lists and any other
91. agreements, documents, studies, or reports relating to the Property.

92. Responsibility to Tenant: Owner shall fulfill all Owners’ obligations to tenant pursuant to the lease/rental agreement and as
93. required by law.

94. Authorized Access: Owner shall not visit Property or contact tenant without five (5) business days or business days prior
95. notice to Broker to allow Broker sufficient time to provide tenant with any legally required notice. Owner shall not enter the property
96. unless accompanied by the Broker.

97. Inquiries/Negotiations: Owner shall refer all inquiries regarding the Property, including inquires regarding lease or lease renewals,
98. to Broker and all negotiations regarding the Property shall be conducted solely by or under the direction of Broker.

99. Sale or Transfer of Property: In the event Owner decides to sell, exchange or transfer the Property, Owner shall notify Brokerimmediately.

100. Foreclosure: Owner shall pay all loan obligations, property taxes, association fees and any other obligations which could lead to
101. a foreclosure action. Owner shall notify Broker and tenant within ten (10) days after receipt of notice of any trustee’s sale or judicial
102. foreclosure related to the Property, or as otherwise prescribed by law.

103. Broker’s Employees: Owner shall not hire or contract with any employee of Broker to do any work or perform any service related to
104. the Property without Broker’s written consent.

105. Registration, Licensure and Tax: Owner, at Owner’s expense, shall register the Property with the County Assessor and, if residing
106. out-of-state, designate a statutory agent who lives in Arizona to accept legal service on behalf of Owner. Owner agrees to purchase
107. any business license or other license required by the applicable governmental authority and pay any fees or taxes when due.

108. Operating Reserve Account: Owner shall maintain a reserve account operating balance of $ in the PMTA to meet
109. obligations in the event of a shortage of current rental income or emergencies. Broker, in Broker’s sole discretion, may, but shall
110. not be obligated to, advance Broker funds on behalf of Owner to keep Owner’s account open or to avoid charges for an insufficient
111. minimum balance. Owner shall reimburse Broker for all advanced funds, interest or fees upon demand and remit any funds to Broker
112. necessary to maintain reserve account at the agreed upon amount.
113. Insurance: Owner, at Owner’s sole expense, shall maintain adequate Property insurance, public liability insurance and any other
114. necessary insurance on the Property, in an adequate amount to protect the interests of Owner and Broker. Owner shall name Broker
115. as co-insured on all insurance policies covering the Property and provide Broker with Certificates of Insurance or copies of the
116. policies. Such insurance shall remain in full force and effect during the term of this Agreement and any renewals thereof.

117. Legal and Tax Advice: Owner recognizes, acknowledges, and agrees that Broker is not qualified or licensed to provide legal or
118. tax advice. Only an attorney is qualified to represent the Owner in court. Owner shall consult with an attorney, professional tax
119. consultant, or other qualified licensed professional to advise Owner with respect to legal or tax issues.

120. Release of Claims: Owner hereby expressly releases, holds harmless and indemnifies Broker from any and all claims liability,
121. damages or legal actions arising from the management of the Property, including liability from any injury suffered by an employee or
122. other person on the Property, liability in connection with any trustee’s sale or judicial foreclosure of the Property or in connection with
123. prior management of the property and/or any deposits not released to the Broker. Owner agrees to promptly and diligently defend,
124. at Owner’s sole expense, any claim, legal action or other proceeding brought against the Broker arising from the management
125. of the Property, except in the case of Broker’s willful misconduct and/or gross negligence. Owner agrees to reimburse Broker for
126. any monies which the Broker expends in connection with, or in defense of, any claim, civil or criminal action proceeding, charge or
127. prosecution made, instituted, or maintained against Broker, or Owner and Broker jointly or severally.
128. (OWNER’S INITIALS REQUIRED)
OWNER OWNER

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Property Management Agreement • February 2016

Copyright © 2016 Arizona Association of REALTORS®. All rights reserved.

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5. COMPENSATION
129. Owner agrees to compensate Broker for services rendered as set forth below.
130. Management Fees: Management fee(s) will be charged each month during the term of this Agreement regardless of whether or not
131. the Property is occupied by a tenant, as follows:
132. Owner agrees to pay Broker a management fee of when the
133. Property is leased to a tenant.
134. Owner agrees to pay Broker a management fee of when the
135. Property is vacant.
136. Owner agrees to pay Broker

137.
138.
139.
140.
141. Management fees shall not be charged on sales tax.

142. Leasing Commission: Owner agrees to pay Broker a commission of if Broker produces a
143. ready, willing and able tenant, or if a rental of the Property is made by Owner or through any other broker, or otherwise, during the
144. term of this Agreement for services rendered. Owner agrees to pay a commission of for
145. any holdovers or rental renewal, regardless of whether or not this Agreement has expired.
146. Sales Commission: Owner agrees to pay Broker a commission of if during the term of
147. any lease of the Property, including any renewals or holdovers, or within days after lease termination, any tenant or
148. tenant’s heirs, executors or assigns enter into an agreement with Owner to purchase the Property.

149. Miscellaneous Owner Fees: Owner agrees to pay Broker the following fees for additional services:
150. Initial clean up /Property preparation fee: $
151. Set up fee: $
152. Marketing and Advertising fee: $
153. Insurance coordination fee: $
154. Document duplication fee: $
155. Re-key fee: $
156. Statutory agent fee: $
157. Other:

158.
159.

160. Other professional service fees shall be established by separate written agreement.
161. Broker does does not charge for in-house services. (Explain)

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Property Management Agreement • February 2016

Copyright © 2016 Arizona Association of REALTORS®. All rights reserved.

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