In property management, what is a management agreement?

MANAGEMENT AGREEMENT: The contract between a PROPERTY OWNER (principal) and a PROPERTY MANAGER (agent) that governs their relationship. CONTENTS: The manager's AUTHORITY (what they can do — lease, collect rent, hire vendors, handle maintenance); RESPONSIBILITIES (duties, reporting, accounting); COMPENSATION (typically a percentage of rents collected, plus possible fees); the TERM and termination provisions; the scope of the relationship; AGENCY: A management agreement creates a GENERAL AGENCY — the manager handles ongoing matters for the owner over time (unlike a listing broker's special agency for one transaction); the property manager owes fiduciary duties to the owner; MANAGER'S DUTIES: Maximize income while preserving/enhancing the property's value; maintain the property; handle tenant relations, leasing, rent collection, maintenance, financial reporting, budgeting; TRUST FUNDS: Managers handle owner and tenant funds (security deposits, rents) — must follow trust accounting rules; the management agreement is the foundational document of the property management relationship and is important broker-level knowledge tested on the national exam.