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Can a Property Manager Sign a Lease on Behalf of the Property Owner?

February 2, 2022 / by Hignell Property Management Team

man signing rental lease

Your property manager may not necessarily be the owner of the property being rented. This is because an investment property owner has the option to be involved in all aspects of a rental property or streamline these processes by hiring another person - a professional property manager, to act on their behalf.

With proper, written authorization by the owner, a property manager has the capacity to perform the many and varied functions as the owner’s representative. The manager’s tasks will vary based on the property owner’s preferences and needs but may include the following -

  • Preparing the investment property unit for the new resident when the previous resident departs.
  • Marketing the rental property through various channels.
  • Showing the investment property rental unit to potential renters.
  • Screening renter applications to ensure all applicants are evaluated using a Fair Housing compliant process.
  • Negotiating with the selected renters for the vacant rental unit.
  • Signing the lease agreement with the new renters. Note – a properly authorized property manager has the ability to sign a new lease, lease renewals, and terminations.  
  • Managing and maintaining the property according to the owner’s requirements.

A property manager becomes an authorized representative when the property owner & manager execute a legally binding property management agreement, a legal contract that details a manager’s responsibilities and the owner’s expectations regarding the property’s managerial tasks. A property management agreement provides important protections for both the property owner and their manager.

Property managers offer property owners - living at a distance or too busy to manage the property - a viable alternative that ensures that the residents remain happy, the property is well-maintained, and generating optimal rental income.

What's Included in a Contract?

The relevant information that should be included in a property management contract contains the following –

  • The property owner’s name and contact information.
  • The property management company’s name and contact information.
  • The date the management agreement becomes effective plus an expiration date or stated length or term of the contract. Typically, property management agreements are valid for one year.
  • The type of insurance the property manager must carry to protect themselves and the property.
  • Both signatures, including the date of the signature.
  • Fee structure for additional services, if applicable.
  • The property owners’ responsibilities to the property and manager.
  • A clause that denotes that the management company seeks to comply with state and federal fair housing laws.
  • Reasons that allow for early termination of the management agreement and those obligations required upon termination.

A contract for property management is intended to oversee the relationship that exists between the property manager and the rental property owner.

The property management agreement will also detail how the manager is paid for various property management services. These will vary based on the owner’s needs and requirements and may include :

  • Ensuring compliance with state & federal mandates, like lead testing, etc.
  • Various leasing services, including the signing of lease agreements for the owner.
  • The invoicing and collection of rental receipts.
  • Performing preventative & emergency maintenance and repairs.
  • Responding expeditiously to noncompliance issues like late fees for payments received after the due date.
  • Maintaining accounting data and generating relevant managerial reports for the property owner.

Working with a property  management company can save you time and give you peace of mind that your investment properties are being taken care of, so that you can get your weekends back and focus on what matters most to you.

Related Articles:

Can a Property Manager Enter a Home?

Property Manager Do's & Don'ts

FAQ about Hiring a Property Management Company

Topics: Residential Property Management, Investment Property