Property Management Service Agreement

What a good one includes

• A highly detailed description of the specific services, materials, and deliverables expected from the contractor.
• A clear payment schedule that outlines milestones, deposit amounts, invoicing procedures, and any penalties for late completion.
• Proof of general liability insurance, workers' compensation, and professional licenses necessary to legally perform the work.
• A straightforward provision explaining how either party can terminate the agreement early, including notice periods and cure periods for defaults.
• Explicit language clarifying that the service provider is an independent contractor, not an employee, to avoid tax and labor classification issues.
• A commitment from the provider to warrant their craftsmanship and materials for a specified timeframe post-completion.

Common mistakes to avoid

• Relying on vague descriptions of the job instead of writing down precise technical specifications and milestones.
• Failing to verify and document the contractor's insurance coverage before allowing them to begin work on the property.
• Using a generic template that classifies the worker as an independent contractor without structuring the actual work relationship to match that legal definition.
• Forgetting to specify who owns and pays for the permits and materials required to complete the project.

Frequently asked questions