Management contracts

What a management contract actually decides

The contract is where your board's authority to the manager gets put in writing. It should spell out scope of services (what the manager actually does), spending limits, fee structure, extra charges, and how either side can end the agreement. If a task is not written into the contract, state law, or your governing documents, nobody has actually authorized the manager to do it.

A manager acting for your association is legally your agent: bound by, and limited to, the authority the contract or a specific board vote actually grants.

"one who represents another, called the principal, in dealings with third persons."

Source: Association Manager (Managing Agent), FindHOALaw

Before you sign or renew, write your own scope of services first and compare proposals against it, rather than accepting whatever a vendor's standard contract offers. See Management RFPs for how to build that scope.

Fees, and what's not included

Management fees are commonly priced a handful of ways: per unit per month (the most common model), a flat monthly fee regardless of size, a percentage of the budget, tiered service packages, or a low base fee plus a la carte pricing for extras.

The base fee rarely covers everything. Printing and postage, violation letters and hearings, resale certificates and lender questionnaires, capital project oversight, after-hours calls, and homeowner portal access are commonly billed separately. A contract that looks cheap on the base fee can end up costlier once the extras your association actually uses get added.

Read the fee schedule line by line before comparing two proposals on their headline number alone. See Management fees and Extra charges for the full breakdown.

Who can spend what, and when

A contract should set two numbers: how much the manager can spend on routine items without asking first, and how much they can spend in a genuine emergency before the board signs off. Neither number has a standard answer. It comes from your own governing documents and whatever your board negotiates into the contract, so look for it by name rather than assuming a figure.

Anything above that line should require a specific board instruction, given collectively and in writing, not a phone call to one director. A manager acting within the board's actual direction is doing the job correctly; a manager acting on their own guess about what the board would probably want is not.

See Manager authority and Board instructions to management.

How it ends

Every contract should state a notice period for either side to terminate, and what happens to your records when it does. Common notice periods range anywhere from 30 to 90 days depending on what a board actually negotiates. There is no standard length, so find the termination clause in your own contract and negotiate it if it does not fit your association.

At least one state forces a fast handoff of records once the relationship ends.

"shall return all community association official records within its possession to the community association within 20 business days after termination of a contractual agreement to provide community association management services to the community association or receipt of a written request for return of the official records, whichever occurs first."

Source: Florida Statutes §468.4334, Return of official records, The Florida Senate

This deadline and its per-day penalty are Florida law. Confirm whether your state has an equivalent statute; where it does not, the return timeline is whatever your own contract says.

A contract should also confirm insurance, including fidelity coverage for funds the manager controls on your behalf. At least one state requires the association itself to carry this coverage regardless of what the management company carries; check whether yours does.

See Changing management companies and Retrieving records and credentials.