An agency relationship between a property owner and a property manager is typically established by?

The agency relationship between a property owner and a property manager is most commonly established through a management agreement. This formal contract outlines the responsibilities, duties, and authority of the property manager in relation to managing the property on behalf of the owner. The management agreement specifies essential details like the scope of management services, the duration of the agreement, compensation structure, and the rights of both parties.

In contrast to a management agreement, a verbal agreement may not provide the necessary legal protection and clarity preferred in business relationships, making it less reliable. While a brokerage agreement is specific to real estate brokers and agents in transactions rather than property management, a letter of intent is generally used in negotiations to outline the preliminary terms of an agreement without creating an enforceable contract. Therefore, the management agreement is the appropriate documentation that solidifies the agency relationship effectively.