A property management agreement should spell out what the manager will do, what it will cost, and which decisions still belong to you. Before signing, check the service scope, fee schedule, maintenance approval limits, handling of rent and other funds, reporting, and termination process. Ask for unclear promises or exceptions to be put in writing. A careful review helps you compare proposals on the same terms and reduces the chance of a dispute later.

Confirm who is responsible and what is covered

Make sure the agreement names the correct owner or ownership entity, the manager, and each property or unit covered. Check the start date, term, renewal provisions, and any attached schedules. If the manager will handle leasing as well as ongoing operations, the agreement should make clear which services are included in each role.

Look for specific duties rather than broad phrases like “full service.” Does the manager advertise vacancies, coordinate showings, process applications, prepare leases, collect rent, respond to resident requests, coordinate vendors, and provide financial reports? Note what is excluded, such as major projects, legal representation, or services for a homeowners association. The California Department of Real Estate advises landlords to verify a manager’s license and obtain copies of the signed management and lease agreements. Owners can check a license through the state’s public lookup.

For each duty, ask who performs it, who is your contact, and what happens if that person is unavailable. If leasing services or other charges are listed separately, ask how they apply when a resident renews or a unit becomes vacant. For help comparing the full cost, see our guide to budgeting for property management in Los Angeles.

Make fees and maintenance authority explicit

Read the fee schedule alongside the main agreement. Identify the management fee, leasing or placement charge, renewal charge, setup costs, inspection fees, and any other possible charges. Ask what amount a fee is calculated on, when it is earned, and whether it applies to vacant units or other income. The goal is not to assume every proposal uses the same structure, but to understand the total cost under realistic scenarios.

Maintenance language should set a clear approval process. Check the dollar amount the manager can authorize without contacting you, how emergencies are handled, and whether the threshold applies per repair or per project. Ask whether the manager uses affiliated vendors, whether any coordination fee or markup may apply, and whether you will receive estimates before non-emergency work above the agreed limit.

  • Set a written spending limit and define what counts as an emergency.
  • Agree on how you will be contacted for approvals and how quickly a response is needed.
  • Request invoices, work descriptions, and notice when a repair grows beyond its approved scope.
  • Clarify how the manager handles recurring maintenance and larger planned projects.

These details make rental property maintenance planning more practical, especially when an owner is out of town or cannot respond immediately.

Understand rent, deposits, and owner reporting

The agreement should explain how the manager receives rent and other funds, pays authorized expenses, and sends the remaining balance to you. Confirm the expected reporting schedule, how to access statements and invoices, and how quickly questions about a transaction will be answered. Ask to see a sample owner statement so you can tell whether it separates rent, fees, repairs, and other deductions clearly.

When a California real estate broker handles client funds, state rules require appropriate trust-fund handling and records. The Department of Real Estate describes records for receipts and disbursements, balances, and funds attributable to each beneficiary or managed property. The agreement should tell you how funds are handled and accounted for, but its wording does not replace the broker’s legal obligations. Ask which broker or company is responsible and what records you will receive.

Also clarify how the manager documents leasing decisions, repair approvals, resident communications, and notices. If you are reviewing a statement, our guide on management costs and charges can help you identify which items to compare with your agreement.

Read the exit terms before you sign

Check the notice period, any early termination fee, and whether the agreement renews automatically. Find out what happens to active leases, pending applications, security-deposit records, keys, vendor warranties, invoices, and unpaid bills when management ends. Establish a deadline and format for transferring property files and accounting records. If either party can terminate immediately for a particular reason, make sure the clause says what that reason is.

Do not rely on a verbal assurance that you can leave “whenever you want.” Match the actual contract language to the manager’s explanation. A month-to-month arrangement can still have notice requirements or fees, so read those provisions rather than inferring terms from the label.

Use a short pre-signing checklist

  • Verify the manager’s current California license and responsible broker, when applicable.
  • Match every promised service to a written duty, fee, or attachment.
  • Confirm repair limits, emergency authority, vendor arrangements, and documentation.
  • Review the rent-disbursement process, sample statement, and access to records.
  • Understand the term, termination notice, final accounting, and file-transfer steps.
  • Keep a complete signed copy, including schedules and amendments.

If a clause is unclear, ask the manager to revise or explain it in writing before signing. Property management agreements can create important legal and financial obligations, and this article is general information, not legal advice. For unusual ownership structures, disputed clauses, or substantial potential fees, consider asking a California real estate attorney to review the document. For a broader set of hiring questions, see questions to ask before choosing a property manager.