Handling the responsibilities of a landlord for a residential property, such as condominiums, may be a tedious task for some. Thus, hiring a condominium management company can be an excellent option to ensure that one still generates profit from their property despite having a limited time or having countless rental units. Regardless, you can’t just let anyone handle your properties. You need to obtain a condominium management agreement that both you and the service provider should sign for important reasons. We will discuss more of it in this article. We also included a set of management agreements templates and examples that you can use for your business.
What Is a Condominium?
A condominium is a type of real estate similar to apartments which you can structurally divide to create multiple units to rent. If you are an owner of such property, you can opt to sell each living space individually. Recently though, detached condominiums are becoming popular. This type of condominium are the ones that look like single-family homes. The difference is they may share corridors, exteriors, yards, streets, and recreational facilities—which community association manages or even own.
What is a Condominium Management Agreement?
A condominium management agreement is a type of agreement that both the owner of the condominium and its hired property management firm agree. This contract will set proper expectations by including not just the responsibilities of each party, but also the legal liabilities and insurance coverage for the owner.
Key Elements of a Condominium Management Agreement
Just like investment agreements, rental management agreements, commercial property management agreements, and business management agreements, a condominium management agreement should include items that will cover the necessary provisions that are beneficial to both parties, such as the following:
This section is one of the most essential elements of a condominium management agreement. It includes the services that the management firm must perform. In this clause, the service list should be specific, which means that the agreement should indicate the scope and limitations of service the management company must render to the property owner.
The fees included in the contract will depend on the services that the management company will render. Thus, it is crucial to check the completeness of the services covered. You can also include a clause that would address the extra services that you want the firm to render, which are not in the standard contract. The content of the said clause should also specify the additional fees for each extra service.
Responsibilities & Limitations
This section contains the responsibilities that both you and the management company has to adhere to. It may also include the insurance policy that will protect you in case unfavorable circumstances happen. Although it is your property, you still have to agree to the limitations that both parties will agree. That is why it is essential to set up a meeting that will allow both parties to address possible misunderstandings and disagreements of the agreement.
When agreeing to a contract, make sure that it is time-bound. The clauses that both parties have approved may not be as feasible as it is next year due to changes in external factors. Thus, it is essential to specify the length of the agreement’s effectivity. Most companies agree for a year contract. Although many partnership agreements last more than a year, they regularly check the contents of the arrangements. Both parties should also discuss the termination arrangement to make sure that either party won’t get stuck in a contract that is not beneficial anymore.
You may also include other sections, such as liability & compliance, funding, etc. to have more specific terms and conditions of the condominium management agreement that you and the management firm agree.
6+ Condominium Management Agreement Samples in PDF
Take a look at the following examples of condominium agreements and use them as a reference in creating one for your property.
1. Condominium Management Agreement Sample
2. Condominium Property Management Agreement
3. Condominium Association Management Agreement Sample
4. Standard Condominium Management Agreement
5. Condominium Rental Management Agreement Sample
6. Condominium Vacation Rental Management Agreement Sample
7. Condominium Rental Management Agreement Sample
How to Effectively Manage Your Condominiums
Employing a condominium management firm can help you accomplish some essential tasks. However, it does not mean that you don’t have a side of the bargain to do. You still have to do the jobs that are not part of the agreement.
1. Know Your Property
Condominium management firms will say that they will do the work for you. They are operating a business. Thus, they see you as a potential customer to win over. Before you go ahead and hire a condominium management firm, make sure to get to know your property first. Check the systems within the space. From there, you can determine what type of services you need for your property.
2. Be Realistic in Setting the Price
Setting the price of your condominium to a notably high price will scare away potential buyers. Thus, it would help if you do your research and use it as a basis when deciding for the right price. Keep in mind, though, that the revenues your place creates will depend on its location, luxury level, size, and amenities. You can also check the price that people in the industry or your competitors set.
3. Screen Many Condominium Managers
There are many condominium management firms out there. However, do you think they can help you attain your goals for your properties? When looking for the right condo management firm, interview several management firms and determine the one that can maximize the revenue your property generates. You can also use a strategic communication management plan which can be beneficial in taking good care of your property.
4. Build a Good Relationship with Third-Party Firms
The way you treat your people often reflects the quality of their work. Thus, you have to build a good relationship with the condominium management team and other third-party companies who provide services for you.
5. Make Sure the Management Agreement Covers Everything
Ensure that you and the condominium management company have the same goals. Whoever creates the agreement must see to it that both parties understand the clauses included. You should also check if it has all the necessary content. Moreover, we recommend that you utilize a condominium management agreement template that contains all the default items. In that case, you will just need to make the necessary changes.
In the United States, the number of sales for condominiums and co-operative housing units from 2015 to 2018 maintains between 601,000 and 619,000, which is a promising figure in the industry. Be one of the successful property investors by applying the knowledge that you have acquired in this article to your property management.
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