How can you avoid common mistakes when drafting property management agreements for FM?

1 Know your client's needs and expectations

Before you start writing the agreement, you need to understand your client's needs and expectations, as well as the characteristics and requirements of the property. This will help you tailor the agreement to the specific situation and avoid generic or irrelevant clauses. You should conduct a thorough assessment of the property, its condition, its usage, its compliance, and its risks. You should also communicate with your client about their goals, preferences, budget, and concerns. This will help you establish a clear and realistic scope of work and deliverables for your FM services.

2 Use clear and precise language

One of the most common sources of confusion and conflict in property management agreements is ambiguous or vague language. You should avoid using jargon, acronyms, or technical terms that your client may not understand. You should also avoid using general or broad terms that could be interpreted in different ways. For example, instead of saying "maintenance", specify what type of maintenance, how often, and by whom. You should also define key terms, such as "emergency", "default", or "force majeure", and explain how they affect the agreement. You should use simple and concise sentences, and avoid long or complex paragraphs that could obscure the meaning.

3 Include essential clauses and provisions

Property management agreements should include all the essential clauses and provisions that govern the FM relationship, such as the scope of work, the fees and payment terms, the duration and termination conditions, the liability and insurance coverage, the dispute resolution mechanism, and the confidentiality and data protection obligations. You should make sure that these clauses and provisions are consistent, accurate, and complete, and that they comply with the applicable laws and regulations. You should also avoid including unnecessary or redundant clauses that could create confusion or contradiction.

4 Review and revise the agreement

Before you finalize and sign the agreement, you should review and revise it carefully. You should check for any errors, omissions, or inconsistencies that could affect the validity or enforceability of the agreement. You should also solicit feedback from your client and address any questions or concerns they may have. You should ensure that both parties understand and agree on all the terms and conditions of the agreement, and that they sign it in the presence of witnesses or a notary. You should also keep a copy of the signed agreement for your records and reference.

5 Update the agreement as needed

Property management agreements are not static documents. They may need to be updated or amended as the FM relationship evolves or as the property or the market changes. You should monitor the performance and satisfaction of both parties, and identify any issues or opportunities that may require changes to the agreement. You should also communicate with your client regularly and inform them of any changes that may affect the agreement. You should document any changes or amendments in writing, and obtain the consent and signature of both parties.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?