What detail must be included in a management agreement between a broker and a community association?

A management agreement between a broker and a community association is a comprehensive document that outlines the responsibilities, expectations, and compensations associated with property management. Including all terms of the broker's compensation in the management agreement is crucial for several reasons.

Firstly, clarity regarding compensation prevents misunderstandings between the broker and the community association. It ensures that both parties have a mutual understanding of what services will be performed and how the broker will be compensated for those services. This transparency can help establish trust and foster a productive working relationship.

Secondly, having all terms of compensation detailed in the management agreement protects both parties legally. Should any disputes arise regarding payment, the written agreement serves as a reference point to resolve such issues.

Finally, detailing compensation terms allows community associations to budget appropriately and ensures that brokers are adequately compensated for their efforts in managing the community. This includes specifying how fees are calculated, payment schedules, and any additional costs that may arise.

In contrast, only stating the property management fee amount does not encompass the full scope of compensation and can lead to ambiguity. Simply discussing marketing strategies or tenant services does not address the critical financial aspects that the management agreement should cover. Therefore, including all compensation terms is essential for a well-structured and effective management agreement.