New Property Management Company - Sample Contract
To protect yourself from personal liability, you should operate your new company as a corporation. You are dealing with millions of dollars of real estate and with homeowners who can get upset with you because you are enforcing the rules of the community. It would be foolish to risk personal liability so protect your personal assets behind the wall of a corporation. You can find online services that will incorporate your business, but not a bad idea to consult with a local attorney too. It’s a good idea to have an attorney that knows community association law available to you for legal advice.
Develop a Management Contract.
You are the legal agent for the communities you manage. This agency relationship is established in the management contract. The contract describes the services you provide and the management fee for these services. The contract should also protect you from liability except in cases of negligence—which cannot be contracted away. Normally, a management contract also has a Schedule or Reimbursable Expenses, like postage, printing, resale certificates, etc. attached to it. These are important to list and price correctly since the reimbursable expenses are revenue generators for you. You should mark them up from your actual costs to cover your time involved in each of these items. We have provided a free sample management contract here for you to use.
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