Reading a management agreement
The clauses that determine what the relationship actually costs and how hard it is to leave.
Term and renewal
How long, and does it renew automatically. An evergreen clause with a narrow notice window is the single most common reason Boards find themselves committed to another year they did not intend.
Fee escalation
A fixed percentage, a CPI adjustment, or CPI plus a spread. Ask for a cap. Compounded across six renewals with no market test, an uncapped escalator is usually the largest cost driver in the agreement.
Scope and exclusions
What the base fee covers, and the addendum listing what it does not. The addendum is the document that matters and the one least often read.
Termination
Notice period, delivery method, whether cause is required, and any penalty. Confirm who is authorized to sign the notice.
Indemnification
Who indemnifies whom, and for what. Mutual indemnification is reasonable; one-directional indemnification of the management company by the association is worth questioning.
Records and exit
Who owns association records, what is returned on termination, in what format, within how many days, and at what cost.
General information for Board members, not legal advice. State law and your governing documents control.
Statutory deadlines, contract terms worth knowing about, and what we learn from proposals. No sales email, and we do not sell the list.
Start with what you already know.
You know your unit count. You know what your current management does well and what it does not. That is enough to begin.
Free for Boards. No calls until you ask.