California Property Management Agreement

What a California property management agreement is for

Handing a rental to a manager means handing over the rent, the tenants' deposits, the keys and the authority to spend the owner's money. In California that arrangement is regulated: the manager must be a licensed real estate broker, the money must sit in a trust account under rules the Department of Real Estate audits, and every lease the manager signs must meet the state's landlord-tenant laws, which changed again in 2024, 2025 and 2026.

This agreement sets out exactly what the broker may do alone, what needs the owner's approval, how and when money moves, what each fee is, and how the relationship ends. It is written for brokers who want a clear, fair agreement to give new clients, and for owners who want to understand what they are signing. Four schedules hold the details that change from property to property, so the main agreement stays the same for every client.

When to use it

Use it when a licensed broker takes over the management of a house, condominium or apartment building for an owner, when an owner moves from one management company to another, or when an existing relationship is running on an outdated agreement. It suits individual owners, family trusts and small investment companies.

It is not meant for an owner's own on-site resident manager, who is an employee and needs an employment agreement instead, for short-term vacation rentals, or for commercial property, where leases and fee structures work differently.

What's inside

The full list of sections and fields in this template, in the order they appear.

1. Parties

   • Owner
   • Broker name
   • DRE license number
   • Responsible broker
   • Contact details

2. Property

   • Address
   • Units
   • Type
   • Local ordinance
   • Tenant Protection Act status

3. Term and termination

   • Start date and term
   • Renewal
   • Notice to end
   • Termination for breach
   • Termination fee
   • Handover of funds
   • deposits
   • records and keys
   • Tenant notice of new payee

4. Appointment and authority

   • Exclusive agency
   • Permitted acts
   • Acts needing Owner approval

5. Leasing

   • Minimum rent
   • Advertising with license number
   • Fair housing screening
   • Application fee limit
   • Reusable screening reports
   • Lease form disclosures
   • Leases over one year

6. Rent collection and enforcement

   • Payment forms
   • No check or notice fees
   • Late charges
   • Tenant Protection Act and local ordinance compliance
   • No self-help evictions

7. Security deposits

   • Who holds them
   • Deposit limit
   • Photographs
   • Pre-move-out inspection
   • 21-day return

8. Maintenance and repairs

   • Habitability including stove and refrigerator
   • Routine repair limit
   • Emergencies
   • Licensed contractors
   • Vendor compensation disclosure

9. Trust funds and accounting

   • California trust account
   • Three-business-day deposit
   • Reserve
   • Monthly statement and payment
   • Monthly reconciliation
   • Three-year records
   • Owner inspection
   • Year-end tax forms
   • Nonresident withholding

10. Compensation

    • Fees per Schedule A
    • No undisclosed compensation

11. Owner's responsibilities and statements

    • Funding
    • Insurance with Broker as additional insured
    • Property information for disclosures
    • Legal compliance
    • Ownership and authority

12. Fair housing, liability and disputes

    • Fair housing laws
    • Indemnities
    • Errors and omissions insurance
    • Mediation
    • Attorney's fees

13. General terms and signatures

    • Notices
    • Entire agreement
    • Assignment
    • Owner and Broker signatures

14. Schedule A. Fees and Disclosed Compensation

    • Management fee
    • Leasing fee
    • Renewal fee
    • Eviction coordination
    • Project supervision
    • Setup fee
    • Staff hourly rate
    • Vendor relationships

15. Schedule B. Authority Limits

    • Repair limits
    • Emergencies
    • Service contracts
    • Rent and lease term limits
    • Rent increases
    • Evictions
    • Settlements
    • Attorneys
    • Approved vendors

16. Schedule C. Tenant Selection Criteria and Owner Information

    • Income
    • Rental history
    • Credit
    • Criminal history
    • Pets and assistance animals
    • Payment details
    • Insurance
    • Association
    • Utilities
    • Warranties
    • Keys

17. Schedule D. Monthly Owner Statement Checklist

    • Rent roll
    • Other income
    • Expenses
    • Fees
    • Deposits held
    • Reserve
    • Owner payment
    • Vacancies and notices
    • Maintenance

Preview pages

How to fill in the agreement

1. Confirm the broker's license. Enter the broker's name, DRE license number and responsible broker exactly as the Department of Real Estate's records show them.
2. Describe each property. Note the number of units and any local rent stabilization or just cause ordinance, and record the Tenant Protection Act status, including whether the owner has already given an exemption statement.
3. Choose the term and termination terms. Set the initial term, the notice period and whether any termination fee applies in the first term.
4. Set the money rules. Fill in the reserve amount, the day statements and payments are due and how the owner wants to be paid.
5. Decide who holds the deposits. Pick the broker's trust account or the owner. If the owner holds them, the owner takes responsibility for the 21-day return.
6. Complete Schedule A. List every fee and every vendor relationship or markup. If it is not listed, the broker agrees not to take it.
7. Complete Schedule B. Set spending limits, the minimum rent, the longest lease the broker can sign and which decisions always come back to the owner.
8. Write the tenant selection criteria in Schedule C. Keep them objective, apply them to everyone, and count housing assistance as income.
9. Sign, then exchange the owner information. Send bank details through a secure channel rather than in the signed document, and give the broker a certificate of insurance naming the broker as an additional insured.

Example: a completed fee and authority excerpt

A fictional owner, the Delgado Family Trust, hires Pacific Crest Property Services to manage a six-unit building in Long Beach:

Monthly management fee: 7% of rents and other income actually collected, or $55 per unit per month, whichever is greater. Leasing fee for a new tenant: 50% of the first month's rent. Single repair or service: Broker may act alone up to $750; Owner approval needed over $750. Operating reserve: $3,000. Statements and payments: by the 15th day of each month, by ACH transfer.

In March the building collects $14,400 in rent. Seven percent is $1,008, which is more than the $330 minimum ($55 × 6 units), so the management fee is $1,008. A $1,140 water heater replacement is over the $750 limit, so the broker sends the owner two quotes and waits for written approval, unless the heater failure has left a unit without hot water, in which case the emergency clause lets the broker act and report.

California rules to know

These are the California rules this agreement is built around. The Department of Real Estate's Reference Book and trust fund handbook give more detail.

• License required (Business and Professions Code section 10131(b)). Leasing, soliciting tenants and collecting rent for others for compensation requires a broker license; owners' resident managers are exempt (section 10131.01).
• Trust funds (section 10145 and California Code of Regulations, title 10, sections 2830 to 2835). Funds go into a trust account at a California depository, generally within three business days, with monthly reconciliation and no commingling.
• Records (section 10148). Brokers keep transaction and trust records for three years.
• License disclosure (section 10140.6). First-contact solicitation materials must show the licensee's name, license number and responsible broker.
• Undisclosed profit (section 10176). Secret compensation and undisclosed markups can lead to license discipline.
• Landlord-tenant duties. The manager carries out the owner's obligations under Civil Code sections 1941.1 (habitability, including stove and refrigerator from 2026), 1946.2 and 1947.12 (just cause and rent cap), 1950.5 (deposits and photographs), 1950.6 (screening fees) and 1962 (identification of owner and manager).
• Fair housing. The Fair Employment and Housing Act protects source of income, including housing vouchers.

Mistakes that cause disputes with managers

Most owner-manager disputes come back to things the agreement never said. Fees appear that the owner did not expect, such as maintenance markups or charges for renewals. The manager signs a two-year lease the owner never wanted, or spends several thousand dollars on a "repair" without asking. At the end of the relationship, deposits and records take months to arrive, and tenants keep paying the old manager. The fee schedule, authority table and handover clause in this agreement exist to settle each of those questions on day one, in writing, while both sides still agree.