What document formalizes the agency relationship between a property manager and a property owner?

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The property management agreement is the document that formalizes the agency relationship between a property manager and a property owner. This agreement outlines the responsibilities, rights, and obligations of both parties, establishing the legal framework for the property management services the manager will provide. Through this agreement, the property owner grants the manager authority to act on their behalf in managing the property, which can include tasks such as marketing, leasing, maintenance, and financial reporting.

The lease agreement pertains to the relationship between a landlord and a tenant, detailing the terms under which the tenant may occupy the property. A sales contract is focused on the transfer of property ownership and does not address the management of a property. The tenant agreement, similar to a lease agreement, governs the relationship between the property manager (as the representative of the owner) and the tenant but does not define the relationship between the property manager and the property owner. Therefore, the property management agreement is essential for establishing the formal agency relationship necessary for effective property management.

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