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Who Needs to Sign a Property Management Agreement?

We sign up a lot of owners for our property management services. Once signed up, we check the county records to see if we have signed up the actual owner of the property.

Some of the time we sign up an owner that has a spouse who is not present at the meeting. So we just sign up that spouse and follow the directions of the person we met.

Recently this happened and then we got a call from the other spouse stating that they were getting a divorce and she wanted the rent money. My first inclination is to stop everything and wait until the two of them work it out. My backup plan is start writing owner proceeds checks in both of their names so they both must sign the checks.

Anyone got a better plan?

Posted by Robert Machado, CPM MPM Sacramento Area Property Manager and Property Management on 10/13/2009 05:44 PM

Comments (7)

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7 Comments on Who Needs to Sign a Property Management Agreement?

OCT

OH BOY!!! Never had this happen. Perhaps what would be best should be to end the first management agreement and start afresh with signatures with authority from both on a NEW agreement.

BTW - the "Property Managers" group that you posted this to is no longer active...

OCT

Excellent plan * making the check payable to both is the best resolution or depositing into a joing account. My process is similar; however, I check the assessor records before preparing the management agreement so that I have spelled all of the owner names correctly.

es, I would make the checks to both parties- AND, not OR, so both must sign. We check the tax records to see who owns. In Arizona, though, one party CAN commit the property to lease.

OCT

I have never had this happen either but will double check tax records from now on. So what happened Robert ??

I finally called the California Association of Realtors Hotline and they filled me in. Any owner or part owner can sign a management agreement and rent out property they have ownership of. This may obligate the other owners but that is ok. The contract we signed with the husband is binding and neither we or the tenant has to deal with the other owners, even if it is the wife. We can ignore her. The wife can take the husband to court but if she sues us, the husband will have to pay our legal fees per the management agreement. The wife would have to pay 1/2 his fees so she in effect would be suing herself!

It is perfectly ok to have only one owner sign, which is how we have been doing business for many years.

Case closed.

OCT

Bob * I still like the idea of knowing about other owners of record. I have had unknown persons show up at rented homes saying they were the owner when they were not on the management agreement and were unknown to me....since the original mgmt agreement signing is often the only time I meet with the owner(s) f2f, I'd like an answer if they were not the only ones listed on the tax records.

We do run the tax records before starting and if we see anything we don't like we stop everything and get that figured out.

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