Many landlords are unable or unwilling to handle the duties of keeping up their properties, dealing with tenants and so on. Property management companies can handle those tasks on landlords’ behalf, but as with virtually any other ongoing business arrangement between two parties, a contract is necessary.
Illinois law provides some requirements for property management agreements. For instance, the state considers property management activity like renting apartments or commercial property to be real estate matters. Therefore, with some exceptions, a property management business must have a real estate broker’s license, if it is going to assist the owner in leasing or selling the property.
To get a broker’s license or managing broker’s license, the applicant must be at least 21 years old and have a high school diploma or the equivalent. There for the standard broker’s license, you must take 90 hours of approved instruction and pass an exam to obtain it.
Assuming that the property manager is qualified, the company and the property owner can enter into an agreement. The terms of that contract will depend on what the parties want and expect out of the deal. For instance, the property manager agrees to be responsible for collecting rent, taking care of minor repairs and some combination of other tasks, in exchange for compensation.
Hopefully, the contract will be both written down and well constructed. This is the best way to avoid conflict between the parties later on. No contract is bulletproof, but a detailed, thoughtful document can minimize the risk of litigation.