Updated on May 27th, 2023
A Kentucky property management agreement is a legal contract that establishes the relationship between a property owner and a property manager. The agreement specifies the manager’s rights, compensation, and responsibilities (e.g., leasing, holding security deposits, subcontracting, etc.). It provides the parties a clear guide that will govern their professional relationship going forward.
License Required? Yes, property managers must hold a valid real estate broker license (§ 324.010(10) & § 324.020(2)(a)). However, a license is not required in the following cases:
- Employee/Principal Broker – A license is not required if the property manager is a regular employee of the owner or principal broker of the company providing property management services (§ 324.030(5)(a)).
- On-site Manager – A license is not required if the manager’s primary compensation is the use of the rental unit (§ 324.030(5)(b)).
Agreement Requirements – A property management agreement must contain the following elements (201 KAR 11:121 – Section 10):
- The manager’s real estate brokerage company name and address
- The landlord’s name and address
- The property’s address and number of units
- The agreement term and a statement indicating whether it will renew yearly
- A provision indicating the method for terminating the agreement
- The manager’s compensation details
- The tenant security deposit details
- The manager’s escrow or management bank account details
- The details of how security deposits will be retained and returned
- The conditions for when the manager may pay property-related expenses
- The manager’s date for sending an account of property-related transactions
- A copy of the lease that tenants will sign
- A statement verifying the landlord has a copy of the agreement and lease
- The signatures and signing date of the landlord and manager
Verify a Manager – oop.ky.gov