What is the primary purpose of a property management agreement?

The primary purpose of a property management agreement is to define the roles and responsibilities of property management. This document serves as a formal contract between the property owner and the property management company, outlining specific duties such as property maintenance, tenant relations, rent collection, and adherence to local laws and regulations. By clearly detailing these responsibilities, both parties have a mutual understanding of their obligations, which helps to ensure the efficient management of the property and protect the interests of the owner.

Understanding the roles and responsibilities is crucial because it sets expectations and minimizes potential conflicts regarding property management issues. Effective management can lead to increased tenant satisfaction and retention, ultimately benefiting the property owner's investment.

The other options involve aspects that are not the central focus of a property management agreement. The legal transfer of property ownership is governed by a deed or title transfer documents rather than a management agreement. Outlining tenants' financial obligations would typically be part of lease agreements rather than the management agreement itself. Establishing renovation plans may be addressed in the management agreement, but this is not its primary purpose; rather, it is a specific detail within the broader context of property management responsibilities.