LA 243: PROFESSIONAL PROPERTY MANAGEMENT AGREEMENT FOR COMMERCIAL PROPERTY OWNED BY TENANTS IN COMMON (COTENANTS) $99.95

Product Overview This property management agreement is for the engagement of a professional commercial property management firm for a large commercial property held in contenancy. The property is owned by several tenants in common (cotenants) collectively.  Each cotenant holds the property for investment and desires to provide for the long term management and leasing of the property by a professional firm. Number of Single Spaced Pages: 28

 

Key Features

 

Type	Property management and leasing agreement for large commercial property owned by tenants in common (cotenancy)
Features	Manager to prepare initial capital and operating budget for the tenants in common; Manager responsible for leasing the property, subject to the approval of the tenants in common; capital expenditures in excess of certain dollar amounts require competitive bidding by the Manager; duties of the Manager are specified in the agreement; detailed financial reporting and record keeping required of the Manager; tenants in common have audit rights; Manager required to produce quarterly market study of competitive properties
Number of Single Spaced Pages	28

 

Quick Look

This PROPERTY MANAGEMENT AGREEMENT (the "Agreement") is dated as of this _________day of ________, 20___, between the Tenants in Common whose signatures appear at the end hereof (collectively, the "Tenants in Common"), and ____________________________, a ______________ corporation ("Property Manager").

The Tenants in Common own certain real property and improvements in _______________, commonly known as ______________________, as more particularly described in Exhibit "A" attached hereto and incorporated herein (the "Property"). The Tenants in Common have entered into a Tenants in Common Agreement (the "Tenants in Common Agreement") concurrently herewith to provide for the orderly ownership and operation of the Property. The Tenants in Common desire to engage Property Manager to manage, lease, operate, and maintain the Property.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. COMMENCEMENT AND TERMINATION DATES; AUTHORITY OF TENANTS IN COMMON.

1.1 Commencement and Termination. Property Manager's duties and responsibilities under this Agreement shall begin on the date of this Agreement (the "Start Date") and shall terminate on the earlier of (a) the sale of the Property or any portion thereof, as to such portion of the Property sold only (other than any sale of an undivided interest held by a Tenant in Common to a party that will acquire such interest subject to the Tenants in Common Agreement), (b) termination as provided in Sections 10.1 and 10.2 or (c) _______, 20___.

1.2 Approval of the Tenants in Common. Whenever in this Agreement the approval, consent or other action by the Tenants in Common is required or otherwise appropriate, the unanimous approval, consent or other action of the Tenants in Common shall be required to approve:

(a) this Agreement and all amendments and renewals hereof;

(b) all Leases and amendments thereof in accordance with Section 2.6;

(c) all financing and refinancing of the Property; and

(d) sale of the Property.

All other actions in this Agreement requiring approval of the Tenants in Common may be taken by the Tenants in Common holding more than fifty percent (50%) of the undivided interests in the Property. Whenever in this Agreement the consent or approval of the Tenants in Common is required or otherwise requested, each Tenant in Common generally shall have thirty (30) days after the date on which the request for consent or approval is submitted to it by Property Manager in which to approve or disapprove of the matter in writing (unless a longer or shorter period for response is expressly provided for herein, for example, the seventy-two (72) hour period to review and approve leasing matters). A Tenant in Common who does not disapprove of the matter in writing within such thirty (30) day period (or such longer or shorter period expressly provided for herein) shall be deemed to have approved the matter. Property Manager shall have no obligation hereunder to comply with any requests or direction made by less than all of the appropriate percentage of the Tenants in Common pursuant to Section 1.2 of this Agreement.

2. PROPERTY MANAGER'S RESPONSIBILITIES.

2.1 Status of Property Manager. The Tenants in Common and Property Manager do not intend to form a joint venture, partnership or similar relationship. Instead, the parties intend that Property Manager shall act solely in the capacity of an independent contractor for the Tenants in Common. Nothing in this Agreement shall cause Property Manager and the Tenants in Common to be joint venturers or partners of each other, and neither shall have the power to bind or obligate the other party by virtue of this Agreement, except as expressly provided in this Agreement, Nothing in this Agreement shall deprive or otherwise affect the right of either party to own, invest in, manage, or operate, or to conduct business activities which compete with, the Property.

2.2 Management. Property Manager shall manage, operate and maintain the Property in an efficient, economic, and satisfactory manner and shall manage the performance of everything reasonably necessary for the proper operation of the Property for the tenants thereof, subject to (a) applicable governmental requirements, and (b) the terms and provisions of this Agreement. At the expense of each of the Tenants in Common, based on their undivided interests in the Property, Property Manager shall keep the Property clean and in good repair, shall order and supervise the completion of such repairs as may be required and shall generally do and perform, or cause to be done or performed, all things necessary, required or desirable for the proper and efficient management, operation, and maintenance of the Property, provided each of the Tenants in Common, based on their undivided interests in the Property, in a manner reasonably satisfactory to Property Manager, makes available to Property Manager sufficient sums to pay the costs thereof. Property Manager shall perform all services in a diligent and professional manner.

2.3 Employees/Independent Contractors of Property Manager. Property Manager shall employ, directly or through third party contractors (for example, an employee leasing company or on-site property manager), at all times, a sufficient number of capable employees and/or independent contractors to enable Property Manager to properly, adequately, safely and economically manage, operate and maintain the Property. All matters pertaining to the supervision of such employees shall be the responsibility of Property Manager. All salaries and benefits and positions of employees who perform work in connection with the Property shall be consistent with the Budget (as defined in Section 2.5).

2.4 Compliance with Laws, Mortgages and Other Matters

2.4.1 Property Manager shall use reasonable efforts to comply, and cause the Property to be in compliance, with any deed of trust, mortgage or other loan documents, and all applicable governmental requirements, including by way of illustration, but not limitation, Board of Fire Underwriters or other similar body, relative to the performance of its duties hereunder, ordinances, rules, regulations, and requirements. Property Manager may implement such procedures with respect to the Property as Property Manager may deem advisable for the more efficient and economic management and operation thereof. Property Manager shall pay from the Operating Account (defined in Section 6.2) expenses incurred to remedy violations of laws. However, Property Manager shall not be obligated to remedy violations of law if sufficient funds are not available in the Operating Account or if the Tenants in Common do not provide sufficient additional funds to do so.

2.4.2 Property Manager shall furnish to the Tenants in Common, promptly after receipt, any notice of violation of any governmental requirement or order issued by any governmental entity, any Board of Fire Underwriters or other similar body against the Property, any notice of default from the holder of any mortgage or deed of trust encumbering the Property, or any notice of termination or cancellation of any insurance policy.

2.5 Budgets and Operating Plan.

2.5.1 Property Manager has prepared and submitted to the Tenants in Common herewith an initial capital and operating budget ("Budget") for the promotion, operation, leasing (including leasing parameters for the Property), repair, maintenance and improvement of the Property for the current calendar year. The Budget is and shall be presented on a monthly, cash basis. Property Manager shall deliver to the Tenants in Common for approval by a majority thereof each subsequent Budget for each subsequent calendar year on or about December 15th of the calendar year before the budget year. Each Tenant in Common shall be deemed to have approved the Budget and the leasing parameters contained therein unless a majority of the Tenants in Common provides written notice to Property Manager and the other Tenants in Common indicating specific objection to certain Budget items within thirty (30) days from receipt of the Budget. In the event a majority of the Tenants in Common do not approve the Budget, the disputing Tenants in Common shall negotiate in good faith with Property Manager and the other Tenants in Common for fifteen (15) days to resolve the issue. If the parties are unable to reach an agreement on any issue other than leasing matters, the issue shall be resolved by binding arbitration as set forth in Section 2.5.4 with (a) each of the disputing Tenant(s) in Common paying his pro rata share of fifty percent (50%) of the cost of arbitration, and (b) all the other Tenants in Common paying his pro rata share of fifty percent (50%) of the costs of the arbitration. Property Manager shall provide the Tenants in Common with such information regarding the Budget as may be, from time to time, reasonably requested by the Tenants in Common. Property Manager may at any time submit a revised Budget to the Tenants in Common.

(continued)

End of Excerpt

 

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