Property Management
Property management is a distinct real estate specialty involving the operation of income property on an owner's behalf. This chapter covers the management agreement, types of leases, and landlord-tenant law.
The Management Agreement and the Manager's Role
A property manager works under a management agreement that creates an agency relationship with the owner and defines duties, authority, and compensation. The manager's goals are to generate income and preserve or increase the property's value by marketing space, screening tenants, collecting rent, maintaining the property, and keeping financial records.
Types of Leases
A lease creates a leasehold estate giving a tenant possession for a term. Under a gross lease the landlord pays operating expenses; under a net lease the tenant pays some or all of them. A percentage lease, common in retail, ties part of the rent to the tenant's sales, and a ground lease rents the land while the tenant may own improvements on it.
Landlord-Tenant Law and Fair Housing
State landlord-tenant laws govern security deposits, required notices, habitability, and eviction procedures, which managers must follow precisely. Fair housing laws apply fully to rentals, so tenant screening and advertising must not discriminate against protected classes, and reasonable accommodations and modifications must be allowed for tenants with disabilities.