How is an agency relationship between a property owner and a property manager typically established?

An agency relationship between a property owner and a property manager is typically established through a management agreement. This written document explicitly outlines the responsibilities, duties, and authority granted to the property manager by the property owner. The management agreement serves to formalize the relationship and ensures that both parties have a clear understanding of their roles and expectations in managing the property. This agreement often includes details such as the scope of management services, compensation structures, and performance expectations.

While a verbal agreement or mutual understanding may exist informally, they do not provide the legal clarity and protection that a written management agreement does. On the other hand, an exclusive right-to-sell contract is specifically related to the sale of property and does not pertain to the management of property, making it unrelated to the establishment of an agency relationship between an owner and a property manager.