What a Property Management Agreement Should Include

DecideFacts checked November 8, 2026Reviewed by Gary E. Wilson, President and Designated Broker

What Washington requires the agreement to say

Managing rentals for someone else for pay is real estate brokerage work in Washington, so it generally takes a real estate license. The state rule for management firms, WAC 308-124D-215, says every managed property must be backed by a written agreement signed by the owner and the firm's designated broker.

That rule also sets the floor for what the agreement must state. Treat this as the first page of your checklist:

• The firm's compensation. How the firm is paid must be written down.
• The property. The type of property and the number of units (or square footage for non-residential space).
• Money authority. Whether the firm may collect and pay out funds, and for what purposes.
• Deposits. Whether the firm may hold tenant security deposits, and how those deposits may be paid out.
• Statements. How often you will get a summary statement.
• Changes. Any amendment must be in writing and signed by you and the designated broker.

Term, termination and the handover

Look for a clear start date, how long the agreement runs, and whether it renews on its own. Then read the termination clause slowly. It should say how much notice either side must give, how notice is delivered, and whether any charge or duty survives after the end. The fee terms belong in writing, but the right length of notice is a business choice, not a legal number.

Washington's trust account rules also say what happens to money when an agreement ends. Under WAC 308-124E-115, your funds are paid out according to the agreement, and tenant deposits go to you or to the next manager, with tenants notified. A careful agreement adds a list of records that come back to you: leases, tenant ledgers, move-in checklists, inspection reports, keys and vendor details. Our guide to switching property managers in Washington walks through that handover.

Scope of services and leasing authority

The scope section is where two agreements that look alike can differ the most. It should list what the manager does and what it does not. Typical items are marketing, showings, screening, lease signing, rent collection, repair coordination, inspections, notices, and coordination of evictions if one is ever needed.

Leasing authority deserves its own lines. Most agreements say whether the manager may sign leases for you, set rent within a range you approve, approve applicants under written screening criteria, and handle renewals. Hiring a manager does not have to mean giving up control. Wilson Management's owner FAQ says owners keep a say in decisions and can choose how involved to be in smaller ones. The agreement is where you write down which decisions stay with you, such as approving a new tenant, a rent change, or a lease renewal.

Your money: trust accounts, deposits and reports

Under RCW 18.85.285, money a licensee collects for clients is trust money. It must be kept apart from the firm's own funds, in a recognized Washington state depository. The trust rules in WAC 308-124E-105 add detail: funds are deposited by the next banking day, each client has a ledger, and the designated broker reconciles the accounts every month.

Tenant security deposits have an extra rule. A management firm may not pay a deposit out to you or anyone else during the tenancy without the tenant's written agreement. It is paid out at the end of the tenancy to whoever is entitled to it. If interest is earned on a deposit account, who receives it is set by written agreement. Your agreement should match these rules, not work around them.

Reporting is also partly set by rule. Each summary statement shows the balance carried forward, rent received, any money you put in, other receipts, every expense paid, the ending balance, and the number of units rented. The agreement sets how often you get one.

Fees, repairs and vendors

The agreement should list every fee in one place, with what triggers it. We do not quote numbers here, because the right comparison is fee plus scope. Our pages on property management fees and property management cost in Washington explain the fee types to look for. Wilson Management's fees page says its fees are explained up front during the free rental analysis and the exact scope is confirmed in the management agreement.

If the firm offers extra services, the state rule requires written disclosure of the firm's relationship with whoever provides them, disclosure of the fees first, and your permission. The agreement should also set a repair approval limit and say what the manager may do in an emergency. Our guide to repair approval limits covers how owners set those.

Insurance and indemnity

Most agreements require you to keep landlord insurance on the property and to show proof. Wilson Management, for example, asks to see proof of the owner's insurance before it starts managing and requires renters insurance from its tenants. Many agreements also say who is named on whose policy and what each side covers if a claim comes up.

Indemnity clauses say who pays if one side is sued over the other's actions. Read them both ways: what you cover for the manager, and what the manager covers for you. For depth on the policy itself, see rental property insurance in Washington. Before you sign, also check the firm's license with the Department of Licensing lookup; our post on how to choose a property manager in Washington covers that step.

Ask for a blank copy of any agreement before your decision meeting so you can read it at home with this checklist. To talk through how a management agreement would work for your property, you can contact Wilson Management or start with a free rental analysis.