Whether you are looking for someone to manage your property as a short-term rental or you manage vacation rentals or serviced apartments on behalf of property owners, having a proper and detailed property management contract is necessary. Even if the partnership comes from a friendship bond, a co-hosting agreement helps as all parties know how to deal with future problems. A sample co-hosting contract can always be helpful, especially if you’re new in the short-term rental industry.
Zeevou is run by actual property managers with expertise and experience managing serviced apartments. So, we know what exactly goes into co-hosting contracts, and we have put together a sample property management contract at the end of this post. But before that, please read the following sections to get a clearer understanding of property management agreements.
What Is a Property Management Contract?
A property management contract clarifies the landlord’s and management company’s binding responsibilities and the duration of such a commitment. Likewise, having a co-hosting contract between the property owner and the property management agency establishes a ground for who has to do what and for how long. It must include the scope of work, responsibilities, flexibility and amendment conditions, fees, and the period during which the contract is binding and applicable.
Advantages of Having a Property Management Contract
A well-written property management agreement indicates the specific responsibilities of both parties. For instance, the contract determines the reasons for partnership termination and specifies a time frame to send a notice for the agreement termination. Besides that, it defines the fees regarding terminating the agreement before its end.
Hence, providing all the liabilities will minimise the conflicts between the parties. In addition, if each party doesn’t fully commit to the duties, the law will protect the party’s rights.
What Does A Property Management Contract Have to Contain?
Eventually, if you wish to draw up accurate and articulate property management or co-hosting contract, make sure to include the following items/articles:
- Specify the ownership, and if the property has more than one owner, you need to determine the contact person. What services should the property management company cover? And to what extent the property manager has the right to rent the property, do marketing duties, and perform booking-related tasks?
- Who will accept liability for the damage caused and associated legal costs incurred? Is the property manager responsible for the negligence of third parties they hire?
- Is there any indemnity for property loss or damage?
- What is the current condition of the property? Are there ongoing maintenance problems? Shall the manager obtain prior approval from the owner for repair and maintenance?
- Who will pay the bills for the utilities and services?
- How much of the rent is for the property owner? Is there any additional costs that will be deducted from the rent?
- How long is the length of the contract? Who is eligible to announce the termination of the contract? How early do they have to send a notice? Who is responsible for the management during the notice period? How much should each party pay for early termination? What are the reasons to terminate the contract?
- What happens if the property owner wants to sell the property?
- What is the safety condition of the property? In other words, are there any national safety regulations and standards that have to be taken into account? Shall the screening of the tenants, reports, and notices comply with state, federal and local law?
- Is there any obligation and responsibility for property insurance? Should a property management company be included under insurance coverage?
- Which parties have access to tenants’ details? Is the owner allowed to place tenants in the building? Who is eligible to take the interest of all the money clients pay for their stay? Should the manager pay anything due to income from additional services to guests?
- How much is the management fee? Is it based on a flat fee per month or a percentage of total rental income for each month? What are all the other fees property owners have to pay to managers? And what is the timeline to return the full payment to the management company?
- Shall Guest Deposits be given to the owner or placed in the manager’s trust account?
Sample Co-Hosting Contract!
Zeevou has compiled a detailed and comprehensive sample of a co-hosting contract. It includes all the aspects mentioned above in more detail. Please note that legal requirements change from jurisdiction to jurisdiction. This document is only meant to give you an idea of the points you may wish to cover. You should seek independent legal advice for any documents you adopt in your business to ensure you are fully protected. Zeevou accepts no liability arising as a result of you using any part of this document. To download the sample co-hosting contract for free, click here.