When it comes to property management agreements, it’s important to understand who the “principal” is. The principal is the person or entity who owns the property that is being managed. In other words, they are the legal owner of the property and have the authority to make decisions about it.
The property manager is the person or entity hired by the principal to manage the property. They are responsible for tasks such as finding tenants, collecting rent, handling repairs and maintenance, and ensuring that the property is in compliance with all applicable laws and regulations.
So, why is it important to know who the principal is in a property management agreement? For one, it helps clarify who has ultimate decision-making authority over the property. If there are any disputes or issues that arise during the management of the property, knowing who the principal is can help resolve those issues more efficiently.
Additionally, understanding who the principal is can help ensure that the property manager is complying with all legal requirements. For example, in some states, property managers are required to have a license to operate. If the principal is also aware of this requirement, they can ensure that the property manager has the necessary license before hiring them.
Overall, it’s important for both the principal and the property manager to have a clear understanding of who is considered the principal in a property management agreement. This can help ensure a smooth and successful partnership between the two parties.