If you manage other people's flats, your agreement with the owner is the foundation of your work. The more precise it is, the fewer misunderstandings. With a good management agreement, the owner knows what they get for their money, and you know where your responsibility ends.
What are you taking on?
List it item by item: finding tenants, signing contracts, collecting rent, maintenance, reporting. Anything not on the list isn't your job.
Typical tasks in full-service management:
- Letting: advertising, viewings, choosing tenants, signing contracts.
- Handover: handover report, photos, meter readings, keys.
- Finances: collecting rent and utilities, handling late payments, settling accounts.
- Maintenance: handling maintenance requests, arranging tradespeople, checking the work.
- Communication: you're the tenant's main point of contact.
- Reporting: a monthly or quarterly report to the owner.
If you only take on part of it, say only finding tenants, spell that out clearly too. Owners can easily assume that "management" means everything.
What's your fee?
A percentage of the rent collected is common, or a fixed monthly fee per flat. Also write down what's charged separately, for example finding a new tenant.
The fee models in brief:
- Percentage fee: a share of the rent collected. It gives you an incentive to keep the flat let and the rent coming in.
- Fixed monthly fee: predictable for the owner, but not tied to performance.
- One-off fees: finding a new tenant, signing a contract, organising a bigger renovation.
Also agree what happens in an empty month. With a percentage fee, you earn nothing; with a fixed fee, the owner pays even without income. Either is fine as long as you both know in advance.
What can you sign on their behalf?
The power of attorney (meghatalmazás) should state exactly what it covers: the rental contract, handover, utility matters.
Avoid a general, "covers everything" power of attorney. Spelling out exactly what you can do on your own protects both the owner and you. Common items:
- signing and terminating rental contracts,
- signing the handover report,
- dealing with utility providers,
- representing the owner at the condominium's general meeting, if they ask,
- taking and settling the deposit.
Money flows
When and how much you transfer to the owner, and how you account for it. What goes into the monthly statement is covered in our article on owner reports.
Two questions you must settle:
- Where does the tenant pay? Directly to the owner, or into your account. If to you, keep the owner's money separate.
- When do you pass it on? For example by the 10th of each month, after deducting your fee and costs.
Decide about the deposit too: who holds it, and who settles it at the end of the lease.
Spending limit
How big a repair you can decide on alone, and above what amount you need to ask first. This saves a lot of phone calls when it comes to maintenance.
An example: under HUF 50,000 you decide on your own; between HUF 50,000 and HUF 200,000 you send a message and ask for approval; above that, with a quote. In an emergency, such as a burst pipe, you can go over the limit to prevent damage, but you inform the owner right away.
Term and termination
How long does the agreement run, and how can it be ended? What happens to ongoing rental contracts, the deposit and the documents when it ends? It's worth writing down that at the end you'll hand over all documents, keys and accounts to the owner or the new manager.
Liability
What are you responsible for, and what not? It's reasonable to answer for your own mistakes, for example if you forgot to collect the rent. But not if a tenant stops paying despite careful screening. Liability insurance is worth considering too, especially if you manage several flats.
FAQ
Does a management agreement need to be in writing?
It's strongly recommended. With a verbal agreement, it's almost impossible to prove what you agreed if there's a dispute.
Who signs the contract with the tenant?
Usually the owner, with the manager acting on their behalf under a power of attorney. The owner is named as landlord in the contract.
How should I handle the data?
You handle tenants' data on the owner's behalf, so data processing and data protection questions come up too. We wrote about this in our article on tenant screening.
Rentkey
In Rentkey, you keep track of powers of attorney, and owners see their own flats with their own login.
