Can this be signed electronically?

Yes. Electronic signatures meet ESIGN (15 U.S.C. ch. 96) and state UETA requirements when intent, consent, attribution, and retention are present; certain courts or subcategories may require additional authentication.

Is a notary required to exercise the option?

Not generally. Exercise procedures are governed by the agreement. However, recording a deed at closing usually requires a notarized deed acknowledgment per state recording rules.

What if the option price is ambiguous?

Ambiguous pricing risks litigation and may be unenforceable under the Statute of Frauds. Use a clear fixed price or a precise formula tied to objective data.

Who should sign for a corporate owner?

An authorized officer or agent with documented signing authority should sign. For corporations, include title and capacity; attach corporate resolution if needed.

Does the option need to be recorded?

Recording is state-specific. Recording an option can protect interests against third parties but may trigger recording fees and public notice; consult local recording office rules.

How are disputes over exercise handled?

Agreements typically include notice procedures, cure periods, arbitration or venue clauses, and deadlines. Follow the contract’s notice provisions precisely to preserve rights.

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Management Agreement and Option to Purchase

Management Agreement and Option to Purchase

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What a Management Agreement and Option to Purchase Covers

A Management Agreement and Option to Purchase is a combined contract where an owner engages a manager to operate or lease property and simultaneously grants the manager (or another party) a time-limited option to buy the property on agreed terms. The document sets management duties, fees, reporting, the exclusive or nonexclusive option period, exercise mechanics, purchase-price formula or fixed price, consideration (option fee), and default/remedy provisions. In many U.S. transactions the option must be in writing to satisfy the Statute of Frauds and may be executed electronically under ESIGN or state UETA equivalents.

Sequential Steps to Complete the Agreement

Follow this order to prepare, execute, and close a management agreement with an attached purchase option.

01

Draft Terms: Define management scope, option period, and price mechanism.
02

Confirm Parties: Use legal entity names and authorized signers.
03

Add Signatures: Collect all signatures; include dates and capacities.
04

Record or Store: Record if required; retain final executed copy securely.

Frequently Asked Questions and Practical Answers

Common questions about enforceability, signatures, and timing when using a Management Agreement and Option to Purchase.

Need help? Contact support

Can this be signed electronically?
Yes. Electronic signatures meet ESIGN (15 U.S.C. ch. 96) and state UETA requirements when intent, consent, attribution, and retention are present; certain courts or subcategories may require additional authentication.
Is a notary required to exercise the option?
Not generally. Exercise procedures are governed by the agreement. However, recording a deed at closing usually requires a notarized deed acknowledgment per state recording rules.
What if the option price is ambiguous?
Ambiguous pricing risks litigation and may be unenforceable under the Statute of Frauds. Use a clear fixed price or a precise formula tied to objective data.
Who should sign for a corporate owner?
An authorized officer or agent with documented signing authority should sign. For corporations, include title and capacity; attach corporate resolution if needed.
Does the option need to be recorded?
Recording is state-specific. Recording an option can protect interests against third parties but may trigger recording fees and public notice; consult local recording office rules.
How are disputes over exercise handled?
Agreements typically include notice procedures, cure periods, arbitration or venue clauses, and deadlines. Follow the contract’s notice provisions precisely to preserve rights.

Typical eSignature Vendor Pricing and Compliance for This Document

Comparing common vendor starting prices and basic capabilities relevant to executing management agreements and options; signNow appears first by design.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Who Typically Uses This Combined Agreement

Parties should confirm authority to sign, local recording practices, and whether electronic signatures satisfy state requirements.

Property owners delegating daily operations while preserving a sale pathway
Third-party property managers seeking an acquisition option tied to performance
Real estate investors structuring contingent purchases with limited upfront capital

Core Contract Elements to Include

A well-drafted agreement separates management obligations from option mechanics and addresses timing, price, and remedies.

Parties

Identify owner, manager, and any option holder, including legal entity type and signing authority to avoid later capacity disputes.

Term

Specify management start and end dates, renewal terms, and how the option period intersects with the management term.

Management Duties

Detail operational responsibilities, reporting cadence, fee structure, insurance obligations, and permitted expenditures.

Option Terms

State the option window, exercise notice procedure, deposit handling, and whether option assignment is permitted.

Purchase Price

Provide a fixed price or a precise valuation formula and tie deadlines to inspection, appraisal, and financing contingencies.

Termination & Remedies

Include default definitions, cure periods, liquidated damages if appropriate, and post-termination obligations for records and access.

Security and Compliance Features to Track

Encryption: TLS 1.2/1.3; AES-256

Audit Trail: Timestamped signing history

Access Controls: Role-based permissions

HIPAA BAA: BAA available when required

21 CFR Part 11: Compliant for regulated workflows

Retention: Exportable, tamper-evident records

Key Risks and Potential Legal Consequences

Unenforceable Option: Ambiguous terms

Tax Exposure: Incorrect reporting

Recording Issues: Lost priority

Statute of Frauds: Oral options invalid

Default Liability: Damages and penalties

Privilege Loss: Poor document controls

Common Drafting and Execution Mistakes

Leaving the option price tied to undefined metrics, which causes disputes when parties later try to calculate purchase price.
Failing to specify exercise mechanics and notice addresses, resulting in missed deadlines or contested exercises.
Using informal or inconsistent party names that differ from formation documents, which can create enforcement and title transfer problems.
Neglecting to address assignment rights and subordination, exposing the option holder to unexpected lender or lien issues.

Typical Workflow from Draft to Closing

A concise workflow showing the main operational steps for preparing and completing the agreement and purchase option.

Prepare Agreement: Draft terms and attach exhibits
Agree Option Terms: Fix price, fee, and period
Execute Signatures: Collect all required signatures
Close / Record: Finalize sale and record deed

Recommended Digital Workflow Settings

Suggested eSignature and routing settings to streamline execution while maintaining legal integrity.

Field	Configuration
Authentication	Email + SMS code for signer verification
Field Types	Signature, date, initials, checkbox
Routing Order	Manager then owner then closing agent
Notifications	Reminders every 3 days until signed

Technical and Integration Considerations

Ensure your eSignature platform supports required authentication, document formats, and integrations before execution.

File Formats: PDF, DOCX supported
Integrations: Salesforce, NetSuite, Google Workspace
Authentication: SMS, KBA, SSO options

Typical Deadlines and Time Windows to Watch

Common timing elements included in options and management agreements; adapt windows to the negotiated deal.

Option Exercise Deadline:

Specified in agreement; commonly 30–180 days from notice

Notice Period:

Often 10–30 days for cure or intent to exercise

Recording Deadline:

Record deeds promptly post-closing to protect priority

W-9 Collection:

Collect payee W-9 upon payment requests to avoid withholding

Contract Termination Notice:

Standard 30–90 days unless otherwise agreed

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