What is the primary purpose of a management contract?

The primary purpose of a management contract is to define the relationship between the property manager and the property owner. This contract establishes the expectations, responsibilities, and authority of both parties within the property management process. By detailing the terms of engagement, including duties, compensation, and duration of the contract, it ensures clarity and legal protection for both the manager and the owner.

While setting rental prices, outlining maintenance schedules, and determining tenant responsibilities are important aspects of property management, they are typically components or tasks carried out within the framework established by the management contract. The contract itself is fundamentally about outlining how those tasks and responsibilities fit into the broader relationship between the two parties. This foundational role is crucial for effective property management and helps to manage risks by clearly defining the scope of work and accountability.