Record Keeping and the Standard Property Management Agreement

Are you an Investor with rental properties in Texas currently under management by a broker or other property manager? Or perhaps you are a manager charged with overseeing and manager rental or investment properties owned by another. Chances are, if you own or manage rental properties in San Antonio, you will be confronted with a property manager's record keeping obligations under the standard Texas Association of Realtors ("TAR") Residential Leasing and Property Management Agreement (TAR Form 2201).

This form requires that the property manager remit to the property owner EACH MONTH a statement of receipts, disbursements, and charges. This means that an Owner should be receiving MONTHLY communications from the manager reflecting rental and other income, as well as a statement of disbursements (such as repair/maintenance costs incurred, utilities paid, management fees collected, and general costs of marketing or opertaing the property). Failure to remit these statements could be considered a breach of the Management Agreement, and could invalidate the manager's right to future management fees.

While there is no particular form prescribed for the statement, its required contents (including actual receipts) are fairly straight-forward. The prudent property manager will use the MONTHLY STATEMENT requirement as an effective tool to communicate with the owner/client, and as a tool to analyze whether the property is receiving its maximum return.