Management Agreement for Condominium Association

Management Agreement between Condominium Association and Management Company

Management Agreement made , between the , a not-for-profit corporation organized and existing under the laws of the state of , with its principal office located at , hereinafter called the Association, pursuant to the (e.g., Declaration of Condominium) dated and recorded in the office of the (e.g., County Recorder of the) , , in Book of Deeds at Page , and , a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as the Agent.

For and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Appointment of Agent

A. Association appoints Agent and Agent accepts appointment, on the terms and conditions provided in this Agreement, as exclusive Managing Agent of the Condominium known as , located at , and consisting of dwelling units.

B. Agent fully understands that the function of Association is the operation and management of the Condominium; and Agent, notwithstanding the authority given to Agent in this Agreement, will confer fully and freely with the Directors of Association in the performance of duties as set forth and will attend membership or Director's meetings at any time or times requested by Association.

2. Documents Supplied Agent

To facilitate efficient operation, Association shall furnish Agent with a complete set of the plans and specifications of the Condominium and, with the aid of these documents and inspection made by competent personnel, Agent will inform itself with respect to the layout, construction, location, character, plan, and operation of the lighting, heating, plumbing, and ventilating systems, as well as elevators, if any, and other mechanical equipment in the Condominium. Copies of guarantees and warranties pertinent to the construction of the Condominium and in force at the time of the execution of this Agreement shall be furnished to Agent.

3. Definitions

A. The term assessments shall mean those monthly rates established by Association that the members are bound to pay as their share of the common expenses under the (e.g., Declaration of Condominium) .

B. The term gross collections shall mean all amounts actually collected by Agent, either as assessments or as rents.

C. The term Association shall mean an Association, cooperative, or corporation consisting of all of the owners of family units in the Condominium organized and existing under the (Citation of State’s Condominium statute) for the purpose of administering the Condominium established by the (e.g., Declaration of Condominium) .

4. Duties of Agent

It is understood that the authority and duties conferred on Agent are confined to the common areas and facilities and the restricted common areas and facilities as defined in the (e.g., Plan of Apartment Ownership) . Such authority and duties do not and shall not include supervision or management of family units except as directed by Association. Under the personal and direct supervision of one of its principal officers, Agent shall render services and perform duties as follows:

A. On the basis of an operating schedule, job standards, and wage rates previously approved by Association on Agent's recommendation, investigate, hire, pay, supervise, and discharge the personnel necessary to be employed in order properly to maintain and to operate the Condominium. Such personnel shall in every instance be in Association's, and not in Agent's, employ. Compensation for the services of such employees (as evidenced by certified payrolls) shall be considered an operating expense of the Condominium.

B. Immediately ascertain the general condition of the property, and, if the accommodations there afforded have yet to be occupied for the first time, establish liaison with the general contractor to facilitate the completion of such corrective work, if any, as is yet to be done; also, cause an inventory to be taken of all furniture, office equipment, maintenance tools, and supplies, including a determination as to the amount of fuel on hand.

C. Coordinate the plans of the Condominium's family units, referred to as members, for moving their personal effects into the Condominium or out of it with a view towards scheduling such movements so that there shall be a minimum of inconvenience to other members.

D. Maintain businesslike relations with members, whose service requests shall be received, considered, and recorded in systematic fashion in order to show the action taken with respect to each, report complaints of a serious nature to Association with appropriate recommendations after thorough investigation; as part of a continuing program, secure full performance by the members of all items and maintenance for which they are responsible.

E. Collect all monthly assessments due from members, all rents due from users of garage spaces and users or lessees of other non-dwelling facilities in the Condominium; also, all sums due from concessionaires in consequence of the authorized operation of facilities in the Condominium maintained primarily for the benefit of the members; under Association's authorization, request, demand, collect, receive, and receipt for any and all charges or rents that may at any time be or become due to Association and to take such action in the name of Association by way of legal process or otherwise as may be required for the collection of delinquent monthly assessments. As a standard practice, Agent shall furnish Association with an itemized list of all delinquent accounts immediately following the tenth day of each month.

F. Cause the buildings, appurtenances, and grounds of the Condominium to be maintained according to standards acceptable to Association, including but not limited to interior and exterior cleaning, painting, decorating, plumbing, steam fitting, carpentry, and such other normal maintenance and repair work as may be necessary, subject to any limitations imposed by Association in addition to those contained in this Agreement. For any one item of repair or replacement, the expense incurred shall not exceed $ unless specifically authorized by Association; excepting, however, that emergency repairs immediately necessary for the preservation and safety of life and property or required to avoid the suspension of any necessary service to the Condominium may be made by Agent, irrespective of the cost limitation imposed by this Paragraph. Notwithstanding this authority as to emergency repairs, Agent, if at all possible, will confer immediately with Association regarding every such expenditure. Agent shall not incur liabilities (direct or contingent) that will at any time exceed the aggregate of $, or any liability maturing more than one year from the creation of the liability, without first obtaining Association's approval.

G. Take such action as may be necessary to comply promptly with any and all orders or requirements affecting the premises placed on it by any federal, state, county, or municipal authority having jurisdiction and orders of the Board of Fire underwriters or other similar bodies subject to the same limitation contained in Paragraph F in connection with the making of repairs and alterations. Agent, however, shall not take any action under this Paragraph so long as Association is contesting or has affirmed its intention to contest any such order or requirement. Agent shall promptly, and in no event later than hours from the time of their receipt, notify Association in writing of all orders and notices of requirements.

H. Subject to approval by Association, make contracts for water, electricity, gas, fuel oil, telephone, vermin extermination, and other necessary services, or such of them as Association shall deem advisable; also, place orders for such equipment, tools, appliances, materials, and supplies as are necessary properly to maintain the Condominium. All such contracts and orders shall be made in the name of Association and shall be subject to the limitations set forth in Paragraph F. When taking bids for issuing purchase orders, Agent shall act at all times under the direction of Association and shall be under a duty to secure for, and credit to Association, any discount, commissions, or rebates obtainable as a result of such purchases.

I. When authorized by Association in writing, cause to be placed and kept in force all forms of insurance needed to protect adequately Association, its members, and mortgagees holding mortgages covering family units, as their respective interests appear (or as required by law), including but not limited to workers' compensation insurance, public liability insurance, boiler insurance, fire and extended coverage insurance, and burglary and theft insurance. All of the various types of insurance coverage required shall be placed with such companies, in such amounts, and with such beneficial interests obtained, as shall be acceptable to Association and to mortgagees holding mortgages covering family units. Agent shall promptly investigate and make a full written report as to all accidents or claims for damage relating to the management, operation, and maintenance of the Condominium, including any damage or destruction to the Condominium and the estimated cost of repair, and shall cooperate and make any and all reports required by any insurance company.

J. From the funds collected and deposited in special accounts provided in this Agreement, cause to be disbursed regularly and punctually:

1. Salaries and any other compensation due and payable to the employees of Association and the taxes payable under Paragraph K;

2. Fire and other property insurance premiums and the amount specified in the regulatory Agreement for allocation to the reserve fund for replacements and to the general operating reserve fund; and

3. Sums otherwise due and payable by Association as operating expenses authorized to be incurred under the terms of this Agreement, including Agent's commission.

After disbursement in the order specified, any balance remaining in the special account may be disbursed or transferred from time to time, but only as specifically directed by Association in writing, but such balance must be within the limits of Agent's fidelity bond, which shall be in an amount equal to the gross monthly collections.

K. Working in conjunction with an accountant, prepare for execution and filing by Association all forms, reports, and returns required by law in connection with unemployment insurance, workers' compensation insurance, disability benefits, Social Security benefits, and other similar taxes now in effect or later imposed, and also requirements relating to the employment of personnel.

L. Maintain a comprehensive system of office records, books, and accounts in a manner satisfactory to Association and to the consenting parties, which records shall be subject to examination by their authorized Agents at all reasonable hours. As a standard practice, Agent shall render to Association by not later than the tenth of each succeeding month a statement of receipt and disbursements as of the end of every month.

M. On or about and subsequently at least days before the beginning of each new fiscal year, prepare with the assistance of an accountant, if need be, an operating budget setting forth an itemized statement of the anticipated receipts and disbursements for the new fiscal year based on the then current schedule of monthly assessments, and taking into account the general condition of the Condominium. Each such budget, together with a statement from Agent outlining a plan of operation and justifying the estimates made in every important particular, shall be submitted to Association in final draft at least days prior to the commencement of the annual period for which it has been made, and following its adoption by Association, copies of it shall be made available, on request, for submission to the consenting party. The budget shall serve as a supporting document for the schedule of monthly assessments proposed for the new fiscal year. It shall also constitute a major control under which Agent shall operate, and there shall be no substantial variances from the budget, except such as may be sanctioned by Association. By this is meant that no expenses may be incurred or commitments made by Agent in connection with the maintenance and operation of the Condominium in excess of the amounts allocated to the various classifications of expense in the approved budget without the prior consent of Association, except that if necessary because of an emergency or lack of sufficient time to obtain such prior consent, an overrun may be experienced, provided it is brought promptly to the attention of Association in writing.

N. Agent shall actively handle the renting of any garage spaces or other non-dwelling accommodations, arranging for the execution of such leases or permits as may be required.

O. Operate and maintain the Condominium according to the highest standard achievable consistent with the overall plan of Association and the interests of the consenting party. Agent shall see that all members are informed with respect to such rules, regulations, and notices as may be promulgated by Association from time to time. Agent shall be expected to perform such other acts and deeds as are reasonable, necessary, and proper in the discharge of its duties under this Agreement.

5. Employment of Personnel

Agent shall hire in its own name all managerial personnel necessary for the efficient discharge of the duties of Agent. Compensation for the services of such employees shall be Agent's responsibility. Those employees of Agent who handle or are responsible for the handling of Association's monies shall, without expense to Association, be bonded by a fidelity bond acceptable both to Agent and Association.

6. Expenses of Agent

Everything done by Agent under the provisions of this Agreement shall be done as Agent of Association, and all obligations or expenses incurred shall be for the account, on behalf, and at the expense of Association, except that Association shall not be obligated to pay the overhead expenses of Agent's office. Any payments to be made by Agent under the provisions of this Agreement shall be made out of such sums as are available in the special account of Association, or as may be provided by Association. Agent shall not be obliged to make any advance to or for the account of Association or to pay any sum, except out of funds so held or provided, nor shall Agent be obliged to incur any liability or obligation for the account of Association without assurance that the necessary funds for discharge will be provided.

7. Funds

Agent shall establish and maintain, in a bank whose deposits are insured by the Federal Deposit Insurance Corporation and in a manner to indicate the custodial nature, a separate bank account as Agent of Association for the deposit of Association's moneys, with authority to draw on the account for any payments to be made by Agent to discharge any liabilities or obligations incurred pursuant to this Agreement, and for the payment of Agent's fee, all of which payments shall be subject to the limitations in this Agreement.

8. Compensation of Agent

The sole compensation that Agent shall be entitled to receive for all services performed under this Agreement shall be a fee computed and paid monthly in the amount equivalent to % of gross collections, exclusive of all surcharges.

9. Term of Agreement

A. Unless canceled pursuant to Paragraph B, C, or D of this Section, this Agreement shall be in effect for a term of (number) (e.g., years) from the date of execution, provided that in no event shall it be of any force and effect until there is endorsed on this Agreement the consent of the consenting party.

B. This Agreement may be terminated by mutual consent of the parties at the end of any calendar month, but not without prior written notice to the consenting party.

C. If a petition in bankruptcy is filed by or against Agent, or if Agent shall make an assignment for the benefit of creditors or take advantage of any insolvency act, either party may terminate this Agreement without notice to the other, but prompt advice of such action shall be given to the consenting party.

D. It is agreed between the parties that the Federal Housing Administration shall have the right to terminate this Agreement at the end of any calendar month, with or without cause, on days' written notice to Association and Agent of its intention to do so.

E. On termination, the contracting parties shall account to each other with respect to all matters outstanding as of the date of termination, and Association shall furnish Agent security satisfactory to Agent, against any outstanding obligations or liabilities that the Agent may have incurred under this Agreement.

10. Counterparts

For the convenience of the parties, this Agreement has been executed in several counterparts, which are in all respects similar and each of which shall be deemed to be complete in itself so that any one may be introduced in evidence or used for any other purpose without the production of the other counterparts. Immediately following endorsement of the consenting parties, counterparts will be furnished to the consenting parties so that each may be advised of the rights, privileges, and benefits that this Agreement confers.

11. Severability

The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision.

12. No Waiver

The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

13. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

14. Notices

Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

15. Attorney’s Fees

In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party in the action shall pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party's attorney fees.

16. Mandatory Arbitration

Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

17. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

18. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

19. Assignment of Rights

The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.

WITNESS our signatures as of the day and date first above stated.

(Acknowledgment form may vary by state)