Property Management and Exclusive Rental Agreement
PROPERTY MANAGEMENT AND EXCLUSIVE RENTAL AGREEMENT
This Agreement, made this day of , by and between _ _hereinafter referred to as "Owner(s)" who represent that they have the right to lease the property located at and Hutchins Property Management Inc., hereinafter referred to as "Agent." It is understood that the Agent and Owner will abide by federal, state and local laws, ordinances and regulations governing fair housing rules and practices regarding discrimination as well as all other pertinent laws. The property listed herein shall be shown and made available to all persons without regard to race, color, religion, national origin, age, sex or marital status.
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained, it is hereby agreed by and between the parties hereto as follows:
- The Owner hereby exclusively employs the Agent to rent, lease, operate and manage the subject property upon the terms hereinafter set forth for the period of one year commencing on the above date and thereafter for annual periods unless on or before thirty (30) days prior to any annual renewal date either party hereto shall notify the other in writing of its intention to terminate this Agreement at the expiration of said term in which case this Agreement will be terminated. Management responsibilities (and compensation for management services to Agent) shall commence on the date of the signing of this Agreement by all parties. In the event the property is currently occupied by the Owner, the management responsibilities (and compensation for management services to Agent) shall commence on the date Owner vacates the property.
- Except as provided herein, Owner authorized Agent and Agent agrees to attend to the making of necessary and proper maintenance, repairs, cleaning and decorations in and to the property and the purchase of incidental supplies therefor at the Owner's expense. Costs of appliances, hot water heaters, furnaces, and other repairs, replacements or improvements shall be billed to Owner. A reasonable charge may be made for time or charges made necessary by government laws or regulations and compliance with such rules or regulations, or excessive time spent in protecting the Owner's interests in any way, such as legal actions or inspections. Expenses shall be deducted from the balance of rent monies or by additional funds paid promptly by Owner upon request from Agent. Except in the event of emergencies, expenditures exceeding THREE HUNDRED DOLLARS ($300.00) will be made by Agent only after being authorized to do so by Owner. It is agreed and understood that emergency repairs are those which in the opinion of the Agent are expedient, desirable or necessary for the health, comfort and safety of the tenant or for the protection of the property or to maintain services to the Tenant as called for by the tenancy, which repairs the Agent is authorized to make. The decision of the Agent will be accepted as final in any of the foregoing instances and charges for the same shall be billed to the Owner. If Owner authorizes Agent to make mortgage payments, Owner will provide Agent with sufficient funds in reserve equal to one month's mortgage payment. This is not to require or imply, however, that Agent is obligated to pay any bills or charges from Agent's own funds or any sums owed to Agent for its services hereunder.
- The Owner hereby authorizes the Agent to offer the property for rent at a monthly rental of but the Agent shall negotiate and execute leases in his best judgment to secure the highest reasonable rent attainable consistent with the circumstances and existing rental conditions. Should Agent elect to place classified advertising, the form, content and frequency shall be at the sole discretion of the Agent.
- Owner agrees to pay Agent a leasing fee when a prospective tenant has been obtained who is ready, willing and able to lease the premises on the terms and conditions set forth herein, or any variance from those terms to which the Owner may agree. This leasing fee is separate and apart from the property management fee specified in Paragraph 5. The leasing fee shall be paid to the Agent from the first month’s rent proceeds in the amount of Eight Hundred Dollars ($800.00). It is further agreed that there will be no fees charged for lease extensions or renewals. In the event property is received in management already occupied by Tenant, Agent shall not be liable for any act or omissions by said Tenant. In such event, notwithstanding the foregoing.
- Owner covenants and agrees to pay as compensation for the property management services of Agent (in addition to the leasing fee) a fee $95.00 per month.
- This Agreement must have attached to it a completed rental management information sheet.
- This Agreement is entered into and made with complete understanding, accord, and without reservation and shall be binding upon any successors, assigns or heirs of the parties hereto.
THE AGENT AGREES TO THE FOLLOWING:
- The Agent covenants and agrees to use diligence in the management of said property during the period of this Agreement until termination of same, and to furnish the services of Agent's organization for the leasing, rental, operation and management of the Owner's property.
- The Agent agrees to use its best efforts to procure suitable tenant for vacancies as they occur in the property in accordance with a schedule of rentals supplied by the Owner to the Agent and to endeavor to collect all rentals which become due in accordance with the terms of any lease now in existence on the aforementioned property, or which might be executed in the future by the Agent for the Owner, exercising due diligence in this pursuit, but nothing in this Agreement shall be construed as a guarantee by the Agent of payment of rents or other charges by the tenant. Agent shall keep accurate records of the receipts and expenditures for said property and furnish the Owner with such data from time to time as the Owner may require. In the event that Owner is not available to directly authorize Agent to lease said premises, then the Agent after duly attempting to notify the Owner for consultation for THREE (3) calendar days, is authorized to enter into the lease for Owner, and shall not be liable for any errors or omissions in said act including, but not limited to, non-payment of rent by Tenant. Agent will make disbursement to the Owner at the end of each calendar month.
- If the Owner requests and authorizes the Agent to make payments on the trusts or mortgages secured by the property, Owner will keep his account funded with Agent in an amount sufficient to cover the monthly costs of the trusts, mortgages or expenses on the property. The Agent agrees, upon request and authorization by Owner, to make timely payments on any trust or mortgage secured by the said property in accordance with a schedule of payments and account numbers supplied by Owner to the Agent; provided, however, that there are sufficient funds immediately available in Owner's account with Agent for that purpose. The Agent will not be expected nor obligated to advance or disburse any of its own money, or any money owed as compensation to Agent for its services hereunder for that purpose nor shall Agent be liable in any way for the default or any consequences thereof in the terms of any trust or mortgage. However, Agent reserves the right for the benefit of the Owner, to make payments on said trust or mortgage in the event there is a deficiency, and it shall be the responsibility of the Owner to reimburse Agent within TEN (10) days of notice of such payment. Therefore, Owner expressly consents to such payments without prior approval if Agent deems necessary. If payment is not made within the aforementioned TEN (10) day period, then this agreement shall terminate at the sole discretion of the Agent on the first day of the succeeding month without the necessity for prior written notice to Owner.
- The Agent is directed to deposit promptly all security deposits received under newly executed leases in an insured Banking or Savings Institution in the jurisdiction in which the property is located. This account shall be devoted exclusively to security deposits, labeled "Escrow Account," and shall bear interest. Interest received is to be paid first to the tenant in an amount as required by any State or local laws, and any residual amount may be retained by the Agent as compensation for administering and accounting for the payment due tenant. Any late charges, returned check fees or other fees collected by the Agent from the tenant under the lease shall be retained by the Agent as compensation for the additional work, time and administration expense involved.
- The Agent agrees to deposit all receipts collected for Owner in a federally insured Banking or Savings Institution, separate from Agent's personal account. Funds owed to owner and a statement of income and expenses shall be sent to owner at the end of each month. Agent shall not be held liable for any loss caused by the bankruptcy or failure of the bank or institution in which the Owner's funds are deposited.
THE OWNER AGREES TO THE FOLLOWING:
- The Owner agrees to indemnify and save Agent harmless from any and all liability for damages to persons or property arising out of the condition of the premises or the use thereof that is beyond the control of the Agent and from any expense in connection with any claim for damages. Owner agrees to pay all costs for Agent to defend, including but not limited to attorney's fees, court costs and other related leasing activity. Owner will provide or otherwise authorize Agent to order, at Owner's expense, an Owner-Landlord Tenant Liability insurance policy, minimum coverage to be $1,000,000.00, to save the Owner and the Agent harmless from any suit involving liability. In the event that the insurance certificate is not received by Agent within five (5) days from the execution hereof, Agent may obtain such insurance at Owner's expense. Owner shall make arrangements with his fire and casualty insurance company to provide for adequate vandalism, malicious mischief and extended coverage insurance in the event that the property becomes vacant. Owner agrees to pay any and all costs and expenses, including but not limited to, attorneys fees to defend lawsuits brought against the Owner or Agent by tenants in connection with Agent's withholding of funds from security deposits to pay for damages to the property. Agent is authorized to hire attorneys at Owner's expense to defend such actions. Owner agrees to rely on Agent's best judgment in making charges against tenant's security deposit and expressly agrees to hold Agent harmless from same. Owner authorizes Agent to settle suits brought by Tenant when, in the opinion of the Agent, it is in the best interest of the Owner to settle same. It is expressly agreed that the Agent may use Owner's funds held on account to pay for any such settlement, including but not limited to, attorney’s fees.
- Owner hereby authorizes Agent to enter into contracts, in Owner's name and at Owner's expense, for electricity, gas fuel, water, sewer, trash removal and other services to and for Owner's property, when same are not the responsibility of the Tenant. Owner hereby authorizes Agent to provide for lawn maintenance and snow removal service when the property is vacant. Owner also agrees to reimburse Agent its costs for certified mail for any correspondences which Agent deems requires such.
- Owner covenants and agrees that any and all personnel required for the management, operation and/or maintenance of the premises shall be deemed independent contractors or employees of the Owner and not of the Agent; that Agent may perform any of its duties through Owner's attorney, agents or employees or an attorney obtained by the Agent; and that the Agent shall not be responsible for the acts, defaults or negligence of the tenant and/or employees of independent contractors.
- In the event of the termination of this Agreement for any reason whatsoever, the Agent agrees to remit to Owner an accounting and all monies due Owner timely and as soon as all obligations regarding subject property are satisfied. In the event this management agreement is canceled within the first year, an amount of One Thousand Two Hundred Dollars ($1,200.00) less any previous Management fees paid shall be paid to Agent. Owner agrees to remit immediately to Agent all monies due Agent in accordance with this Agreement upon demand by Agent.
- In the event Agent is hereby instructed and authorized to pay any and all property taxes, special assessments or other charges against the property that may become due from Owner's funds, Agent shall have no obligation to advance funds for said payments, but shall promptly give written notification to the Owner if there are not sufficient funds available. If the Agent manages more than one property for the Owner, a deficit in the account of one property or vacancy of the property shall automatically permit the Agent to utilize funds in the other account(s) to offset a deficit or insure sufficient funds available for anticipated expenses on the vacant property.
- Authorization is given to install a lockbox on the door of the property for the convenience and use of any real estate salesman and/or broker to show the property to prospective tenants or purchasers. In the event said Agent installs said lockbox on the door of the property, Owner agrees for himself, his heirs and assigns to completely indemnify, save and hold harmless said Agent and its brokers, salesmen and cooperating brokers and agents from any and all claim, loss or liability arising from the use of said lockbox.
- Owner warrants that the electrical, plumbing, heating and air conditioning and any other mechanical systems and related equipment, including kitchen and laundry appliances included as part of the leased premises, shall be in good operating condition. The Agent is authorized to have said equipment repaired and deduct the cost from Owner's funds, if sufficient, or Owner will reimburse the Agent promptly upon request from the Agent. The Owner certifies that the dwelling which he is asking Agent to lease fully complies with all State and/or Local laws. This paragraph is a specific exemption to the provisions of paragraph 2 above.
- Owner has been advised that certain local jurisdictions require, by law, that smoke detectors must be installed and in operating condition in accordance with such laws prior to any change in occupancy of dwelling unit. In addition, the City of Rockville requires that a written certification of compliance with the requirements of the Rockville Smoke Detector Ordinance must be delivered by the lessor or sublessor to the new tenant prior to the change in occupancy. Owner may contact the local fire or rescue service or local municipal governments for information regarding the specific requirements of the Smoke Detector Ordinances, and agrees to comply with these requirements. Owner is solely responsible for insuring that he complies with any and all laws relating to the installation of smoke detectors, and agrees to indemnify and hold Agent harmless from any and all liability for damages to person or property arising out of the Owner's failure to comply with said laws.
- In the event that the property is not leased within one hundred twenty (120) days of the termination of a tenancy created hereunder, either the Owner or the Agent may terminate this Agreement. If the Owner or Agent exercises this right to terminate this Agreement, the Owner shall pay to the Agent the advertising and other costs actually expended by the Agent and other costs actually expended by the Agent in attempting to lease the property.
- Any addendum hereto are made a part hereof and incorporated herein.
- The term of this Property Management and Exclusive Rental Agreement shall survive the execution and delivery of any lease herein referenced and shall not be merged therein.
- Feminine or neuter pronouns shall be substituted for those of the masculine form, and the plural shall be substituted for the singular number, in any place or places herein in which the context may require such substitution.
- The terms and provisions of this Agreement shall be construed and interpreted pursuant to the applicable state or local laws, and if any provision is deemed invalid within this agreement, it shall not affect the remaining provisions as stated.
- In the event that the Owner fails to reimburse the Agent for any expenses, whether authorized or not, within the provisions of this Agreement, then Agent shall, without notice, be entitled to file a lien or a suit or
- to pursue any other legal remedy available to it, to collect said sums under applicable laws. Owner agrees to pay for any and all related costs in pursuance thereof, including but not limited to attorney's fees and court costs.
- In the event that the Owner fails to reimburse the Agent for any outstanding monies advanced on Owner's behalf, the Agent shall be entitled to 1.5% per month interest on said unpaid balance.
- This Agreement shall be deemed to have been written and negotiated by both parties prior to its execution, and shall be construed as commercial in nature.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals, one of which is retained by each of the parties.