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Professional Management Service Agreement

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PROFESSIONAL MANAGEMENT SERVICE AGREEMENT

This Professional Management Service Agreement ("Agreement") is entered into as of , by and between Client Name: Entity type: Corporation LLC Individual; and Manager Name: Entity type: Corporation LLC Individual.

RECITALS

WHEREAS, Client owns, operates, or controls certain business operations, property and/or assets for which Client seeks professional management, oversight, and administrative services; and

WHEREAS, Manager represents that it has the experience, personnel, and qualifications to provide professional management services and is willing to provide such services to Client pursuant to the terms and conditions set forth herein; and

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to the management services to be rendered by Manager.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. SERVICES

1.1 Scope. Manager shall provide the management services described in the Service Description attached below and incorporated by reference, including but not limited to operational oversight, supplier and vendor management, financial reporting and budgeting, personnel coordination, and such other duties as the parties shall reasonably agree in writing (the "Services"). The parties acknowledge that a summary of primary services is set forth in the field below.

2. TERM AND TERMINATION

2.1 Term. The term of this Agreement shall commence on the Effective Date and shall continue for an initial period as specified below unless earlier terminated in accordance with this Agreement.

Commencement Date: Termination Date:

2.2 Termination for Convenience. Either party may terminate this Agreement for any reason upon thirty (30) days' prior written notice to the other party.

2.3 Termination for Cause. Either party may terminate immediately upon written notice if the other party materially breaches this Agreement and fails to cure such breach within fifteen (15) days after receipt of written notice specifying the breach.

3. COMPENSATION AND PAYMENT

3.1 Fees. Client shall pay Manager the fees set forth below for the Services. Unless otherwise stated, fees are due within thirty (30) days of invoice date.

3.2 Late Payments. Overdue amounts shall accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law. Client shall reimburse Manager for collection costs, including reasonable attorneys' fees, if an invoice is collected through legal action.

4. MANAGER'S DUTIES AND AUTHORITY

4.1 Standard of Care. Manager shall perform the Services in a professional manner consistent with industry standards for similar services and shall employ personnel reasonably qualified to perform the Services.

4.2 Authority. Manager is authorized to engage contractors and vendors, enter into agreements on behalf of Client to the extent expressly authorized in writing, and incur reasonable expenditures in the ordinary course of providing the Services, subject to the budget and procurement procedures set forth by Client.

5. CLIENT OBLIGATIONS

5.1 Cooperation. Client shall provide Manager with timely access to facilities, personnel, records, and information reasonably necessary for Manager to perform the Services and shall make relevant personnel available for consultation.

5.2 Approvals. Client shall timely review and approve or reject any plans, budgets or proposals presented by Manager in accordance with the deadlines set forth by the parties.

6. CONFIDENTIALITY

6.1 Confidential Information. "Confidential Information" means all non-public information disclosed by a party that is designated as confidential or that a reasonable person would understand to be confidential under the circumstances, including financial data, business plans, trade secrets, and personnel information.

6.2 Obligations. Each party shall maintain the confidentiality of the other party's Confidential Information and shall not disclose such information except to employees, agents or contractors who have a need to know and who are bound to maintain confidentiality. The obligations in this Section shall survive termination of this Agreement for five (5) years.

7. INTELLECTUAL PROPERTY

7.1 Work Product. Unless otherwise agreed in writing, all deliverables, reports and other tangible work product prepared by Manager in the course of providing the Services ("Work Product") shall be the property of Client upon full payment of all amounts due to Manager, and Manager hereby assigns and transfers to Client all right, title and interest in such Work Product.

7.2 Pre-existing Materials. Each party retains all right, title and interest in any pre-existing intellectual property and tools used by such party in performing its obligations hereunder. Manager grants Client a non-exclusive, non-transferable license to use Manager's pre-existing materials only to the extent incorporated into the Work Product.

8. INSURANCE

Manager shall, at its expense, maintain and keep in force insurance policies customary for the scope of the Services, including commercial general liability and professional liability insurance in commercially reasonable amounts. Upon request, Manager shall provide certificates of insurance evidencing such coverage.

9. INDEMNIFICATION

9.1 Indemnification by Manager. Manager shall indemnify, defend and hold harmless Client and its officers, directors and employees from and against any third-party claims, liabilities, losses, damages and expenses arising out of Manager's gross negligence, willful misconduct or material breach of this Agreement.

9.2 Indemnification by Client. Client shall indemnify, defend and hold harmless Manager and its officers, directors and employees from and against any third-party claims, liabilities, losses, damages and expenses to the extent arising from Client's negligence, failure to provide required information or breach of this Agreement.

10. LIMITATION OF LIABILITY

EXCEPT FOR LIABILITY ARISING FROM A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR A BREACH OF CONFIDENTIALITY OBLIGATIONS, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES. THE AGGREGATE LIABILITY OF EITHER PARTY ARISING OUT OF OR RELATED TO THIS AGREEMENT SHALL NOT EXCEED THE TOTAL FEES PAID OR PAYABLE TO MANAGER UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

11. COMPLIANCE WITH LAWS

Each party shall comply with all applicable federal, state and local laws, rules and regulations in performing its obligations under this Agreement. Manager shall obtain and maintain any licenses or permits required to perform the Services.

12. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and shall be delivered to the addresses set forth below or to such other address as a party may specify by notice in accordance with this Section.

13. ASSIGNMENT

Neither party may assign or transfer its rights or delegate its obligations under this Agreement without the prior written consent of the other party, provided, however, that Manager may assign this Agreement to an affiliate or in connection with a sale of substantially all of its assets provided that the assignee assumes Manager's obligations hereunder.

14. AMENDMENT AND WAIVER

This Agreement may be amended only by a written instrument signed by both parties. No waiver of any provision shall be effective unless in writing signed by the waiving party.

15. GOVERNING LAW; VENUE

This Agreement shall be governed by and construed in accordance with the laws of the state identified below, without regard to its conflicts of law principles.

16. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and communications, whether written or oral, relating to such subject matter.

17. SEVERABILITY

If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect and shall be interpreted so as to give effect to the parties' intent to the greatest extent permitted by law.

18. COUNTERPARTS; ELECTRONIC SIGNATURES

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Signatures delivered by electronic means shall be binding.

19. INDEPENDENT CONTRACTOR

The relationship of Manager to Client is that of an independent contractor. Nothing in this Agreement shall be construed to create a partnership, joint venture, agency, or employment relationship between the parties.

MISCELLANEOUS

Client

Print Name:

By:

Date:

Manager

Print Name:

By:

Date:

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What a Professional Management Service Agreement Covers

A Professional Management Service Agreement is a written contract establishing the relationship between a property owner or principal and a management firm or individual retained to perform professional services. It defines the scope of management duties, compensation and fee arrangements, reporting and recordkeeping requirements, term and termination rights, insurance and indemnity obligations, and performance standards. The agreement allocates responsibilities for third-party vendors, tenant or client communications, and regulatory compliance. Properly executed, it creates clear operational expectations and a formal record that supports dispute resolution and audits.

Why a Clear Agreement Matters for Professional Management

A concise, well-drafted agreement reduces ambiguity about duties, payment, and liability, improving operational consistency. It creates an auditable record for compliance, helps avoid disputes over authority and expenses, and clarifies termination mechanics so both parties understand notice periods and post-termination obligations.

Why a Clear Agreement Matters for Professional Management

Who Commonly Uses a Professional Management Service Agreement

The agreement is used by parties who need a formal management relationship and clear operational and financial terms.

  • Property owners and real estate investors who delegate daily operations to a manager or management firm.
  • Professional management companies that provide oversight, vendor coordination, and tenant or client services for clients.
  • Legal and accounting teams who require documented authorities, reporting cadence, and indemnity language for compliance.

Tailor the agreement to the industry, jurisdiction, and whether the manager will handle financial custody, contracting, or regulated information.

Typical Signers and Their Roles

Property Manager

A licensed or contracted manager responsible for day-to-day operations, vendor selection, rent collection, and routine reporting. The manager needs explicit authority in the agreement to act on behalf of the owner to bind service contracts and process payments within agreed limits.

Owner / Principal

An individual or entity that retains management services and retains ultimate decision-making authority. The owner should specify payment terms, approval thresholds, and policies for termination, indemnity, and dispute resolution to limit exposure and ensure consistent oversight.

Core Clauses to Include in the Agreement

A complete Professional Management Service Agreement organizes expectations and legal protections across operational, financial, and compliance dimensions.

Scope of Services

List specific duties (maintenance, leasing, billing), excluded responsibilities, and service level expectations so parties have measurable performance criteria.

Term and Termination

Set the initial term, renewal rules, required notice periods, and termination for cause or convenience to avoid abrupt operational gaps.

Compensation

Specify fee structure (flat, percentage, tiered), payment timing, expense reimbursement, and any performance bonuses or holdbacks.

Reporting & Records

Define frequency and format of financial reports, access rights to records, audit rights, and responsibilities for record retention.

Insurance and Indemnity

Require liability and property insurance limits, name parties as additional insured where appropriate, and allocate indemnity for third-party claims.

Confidentiality

Protect sensitive business, tenant, or client data, include permitted disclosures, and specify duration of confidentiality obligations.

Essential Fields the Agreement Must Contain

Parties' Legal Names: Full legal entity names
Contact Addresses: Street, city, state, ZIP
Tax Identification: EIN or SSN as applicable
Effective Date: MM/DD/YYYY formatted date
Scope Summary: Concise service description
Compensation Terms: Fees and payment timing

Filling Out the Agreement: Step-by-Step

Follow a logical sequence to reduce errors: identify parties, confirm scope, enter dates, review fee terms, and sign with proper authority.

  • 01
    Identify Parties: Enter legal names exactly as on formation documents.
  • 02
    Define Scope: Describe tasks, exclusions, and measurable deliverables.
  • 03
    Set Dates: Use MM/DD/YYYY for effective and termination dates.
  • 04
    Confirm Authority: Ensure signer has corporate or notarized authority to bind the party.

How to Configure an Online Signing Workflow

Set up the digital workflow to mirror approval steps and preserve an audit trail before sending for signatures.

Field Configuration
Template Save a reusable contract template with preplaced fields.
Signature Order Set sequential or parallel signing as required.
Authentication Require email, SMS code, or stronger ID verification.
Reminders Schedule automatic reminders and expiry notifications.

Where to Send or File the Signed Agreement

Decide destinations for executed copies and required notices, then configure distribution to those locations in your signing workflow.

  • Owner Records: Send an executed copy to the owner's designated email or document repository.
  • Manager Files: Deliver final signed PDF to the manager's secure records folder.
  • Accounting: Forward signed agreement to accounting for invoice setup and billing.
  • Third-Party Portals: Upload to property management platforms or cloud storage as required.

Technical Considerations for Digital Signing and Storage

Confirm platform capabilities and integration points before starting an e-signature workflow.

  • Integrations: CRM and ERP connections streamline record updates.
  • Formats Supported: Use PDF or DOCX for portable signed records.
  • Authentication: Choose email, SMS, or advanced signer verification.

Ensure the chosen solution retains an audit trail, supports secure storage, and meets any industry-specific compliance requirements.

Typical Timelines and Notice Periods to Include

Include clear calendar deadlines for performance, reporting, termination notice, and invoice payment to avoid disputes over timing.

Initial Term Length:

Specify months or years from the effective date.

Renewal Notice:

Require 30–90 days written notice for nonrenewal.

Termination for Convenience:

Set the required notice period and any transition duties.

Payment Terms:

Define net days, late fees, and invoice cadence.

Reporting Frequency:

State monthly, quarterly, or annual report schedules.

Common Mistakes to Avoid When Preparing the Agreement

  • Permitting unsigned or initialed drafts to be treated as final, causing ambiguity about effective terms and dates.
  • Failing to verify signer authority, which may render management actions unenforceable against the principal.
  • Leaving compensation or reimbursement language vague, leading to disputes over reimbursements and allowable expenses.
  • Omitting document retention and access clauses, complicating audits and regulatory responses later on.

Risks and Potential Consequences of an Incorrect Agreement

Breach Damages: Monetary exposure to the non-breaching party
Indemnity Exposure: Obligation to cover third-party claims
Tax Risk: Incorrect TIN or payee data may trigger withholding
HIPAA Risk: Improper handling of PHI may lead to fines
Invalid Signature: Improper authority can weaken enforceability
Litigation Costs: Legal fees and court time increase costs

How to Amend or Update the Agreement

Follow a documented amendment process to ensure clarity and preserve enforceability when terms change.

01

Draft Amendment:

Prepare a written amendment identifying affected clauses.
02

Obtain Authority:

Ensure signers have the same or updated signing authority.
03

Agree on Effective Date:

State MM/DD/YYYY for the amendment's effect.
04

Use Same Execution Method:

Sign the amendment using the original signing process.
05

Distribute Copies:

Provide executed copies to all stakeholders and repositories.
06

Update Records:

Log the amendment and retain for the retention period.

eSignature Pricing and Feature Snapshot for Agreement Execution

A quick vendor snapshot helps compare starting price and core features for executing and storing signed management agreements; signNow is listed first per vendor ordering rules.

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 by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year No cap No cap No cap

Common Questions About Validity, Signing, and Storage

Answers to routine legal and technical questions about execution, enforceability, and recordkeeping for management agreements.


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