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The Property Management Webinar Series Presents
The TAR Property
Management Agreement
Instructed by
Abby Lee,
Associate Counsel
May 21, 2014
Outline
I.
Introduction
II.
License Requirement
III.
The Agreement
IV.
Questions
Introduction
The Texas Association of REALTORS®
Residential Leasing and Property Management
Agreement (TAR form 2201) is available for
member’s use and is accessible one of two ways:
1) ZipForms
2) www.TexasRealEstate.com (the ‘Blank Form
Downloads’ page)
License Requirement
Remember, the Texas Real Estate Commission (TREC) requires
a person to be licensed, if that person, on behalf of another:
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Leases,
Offers to lease,
Negotiates or attempts to negotiate the lease of real estate,
Lists or offers to list real estate for lease,
Aids or attempts to aid in locating or obtaining real estate for lease,
Procures or assists in procuring a prospect to effect the lease of real estate,
Procures or assists in procuring property to effect the lease of real estate, or
Controls the acceptance or deposit of rent from a resident of a single-family
residential real property unit.
AND does so in exchange for, or with expectation of receiving, a
commission or other valuable consideration.
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The Agreement
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Frequently Asked
Question
I’m the property manager, but I’m not a broker.
Should I fill in my name as broker in paragraph 1
of the agreement?
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Frequently Asked
Question
No. If you are an agent and not the broker, you
should not include your name and information in
paragraph 1 of the agreement. You may, however,
be entitled to sign the agreement on behalf of the
broker if authorized by your broker to do so.
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Frequently Asked
Question
I’m the property manager, but the owner of the
property doesn’t want to put his information in
paragraph 1 of the TAR Residential Lease. Can I
use my name instead?
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Frequently Asked
Question
No. Unless you actually are the owner of the property, you should not
insert your name in paragraph 1 as the owner. The Texas Property Code
defines “landlord” as the owner, lessor, or sublessor of a dwelling, but
does not include a manager or agent of the landlord unless the manager
or agent purports to be the owner, lessor, or sublessor in an oral or
written lease. Throughout the Property Code, the “landlord” has many
obligations and failure to comply with those obligations could lead to
liability. Therefore, if you insert your name in paragraph 1 of the TAR
Residential Lease, you could open yourself up to liability.
Additionally, Texas Property Code §92.201 requires that a landlord
disclose to a tenant the name and either a street or post office box
address of the holder of record title (owner). Disclosure can be made by
including the information in a copy of the tenant's lease or in written
rules given to the tenant before the tenant requests the information.
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The Agreement
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Frequently Asked
Question
An owner I’m working with has several
properties she wants me to manage. Do I need to
fill out a property management agreement for
each one?
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Frequently Asked
Question
No. As Paragraph 2 of the TAR Residential
Leasing and Property Management Agreement
states, you can attach the TAR Multiple Property
Addendum (TAR form 2204) instead of executing
multiple agreements with the same owner for
different properties.
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The Agreement
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Frequently Asked
Question
A friend of mine is working with a different
property manager and is using the TAR
Residential Leasing and Property Management
Agreement. He is unhappy and wants to
terminate. Can he terminate?
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Frequently Asked
Question
First, you must take care to avoid interfering with an
exclusive agency relationship, as that could have legal
and ethical repercussions. However, in general, to
terminate the agreement, the broker and owner may
mutually agree to terminate. Alternatively, the owner
may unilaterally terminate the agreement before its
expiration, but risks being sued by the broker for breach
of contract. The only other option is for the owner to
provide notice of termination upon the expiration date
at least 30 days before the expiration date.
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Frequently Asked
Question
The owner of a property I manage has died. Am I
still the property manager for the property?
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Frequently Asked
Question
No. However, according to Paragraph 22.C of the
Residential Leasing and Property Management
Agreement states that “Owner’s obligation to pay
Broker an earned fee is binding upon Owner and
Owner’s heirs, administrators, executors,
successors, and permitted assignees.”
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The Agreement
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The Agreement
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Frequently Asked
Question
The owner wants me to handle the eviction suit of
a tenant who has violated the lease by keeping an
unauthorized pet on the property without
permission. Can I do so?
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Frequently Asked
Question
No. The Texas Property Code § 24.011 states that
“in eviction suits in justice court for nonpayment
of rent or holding over beyond a rental term, the
parties may represent themselves or be
represented by their authorized agents, who need
not be attorneys.” The Property Code, however,
does not authorize nonlawyer representation for
issues other than nonpayment of rent or holding
over, except in default judgment situations.
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The Agreement
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Frequently Asked
Questions
I was managing a property, and the owner
terminated the management agreement by
providing proper notice. A tenant in the property
previously notified us that he will not renew the
lease. The lease ends 30 days from today. I have
the security deposit in my trust account. What do
I do with the security deposit?
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Frequently Asked
Questions
According to Paragraph 4.C of the TAR Residential Leasing and
Property Management Agreement, since you are no longer the
landlord's agent, you should forward the security deposit to the
landlord. You are able to deduct amounts authorized prior to returning
the security deposit to the landlord. and remind him he has a duty to
account for the deposit when the tenant vacates the property.
You should send TAR form 2210 Notice to Tenant of Change in
Management and Accountability for Security Deposits to the tenant
advising him that you are no longer the agent for the landlord, that you
tendered the security deposit to the landlord and the exact dollar
amount, the landlord’s contact information ,and that the landlord is
responsible to account to the tenant for the security deposit.
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Frequently Asked
Questions
Who is responsible for the return of the
security deposit if the property owner sells
the property?
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Frequently Asked
Questions
Under the provisions of Section 92.105 of the Texas Property Code, the seller and
the buyer may be liable for the security deposit and any refund of the deposit to the
tenant upon termination of the rental. The new owner is liable for the return of the
security deposit from the date he acquires the property. However, the seller also
remains liable for the security deposit he received from the tenant until the buyer
delivers to the tenant a signed statement acknowledging that the buyer is the new
owner and has received and is now responsible for the tenant's security deposit.
The transfer of the security deposit upon closing is specifically addressed in the One
to Four Family Residential Contract (Resale) in Paragraph 9B(5). Most title
companies have security-deposit transfer letters that can be signed by the buyer and
the seller at closing to inform the tenant of the sale and security deposit transfer.
TAR form 2210, Notice to Tenant of Change in Management and Accountability for
Security Deposit, could also be used for this purpose with a few obvious changes.
Note: Section 92.105 of the Texas Property Code does not apply to a real estate
mortgage lienholder who acquires title by foreclosure.
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The Agreement
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The Agreement
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The Agreement
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Frequently Asked
Question
I am the property manager of a property which
the owner now wants to sell. Could the owner list
with another broker for sale of the property
during the term of our property management
agreement that is still in effect?
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Frequently Asked
Question
Yes. There is nothing in the TAR Residential
Leasing and Property Management Agreement
that would prohibit the owner from listing the
property for sale with another broker after the
execution of the property management agreement.
However, depending on the circumstances, the
broker may still be entitled to some compensation.
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The Agreement
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Frequently Asked
Questions
Is the broker permitted to keep the interest earned
on the security deposits held in a trust account?
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Frequently Asked
Questions
Yes. Paragraph 11(E) of the Residential Leasing and
Property Management Agreement (TAR form 2201)
allows the broker to retain any interest or income from
an interest-bearing or income producing account.
Note: The broker must remove an interest or income payable from the
trust account not later than the 30th day after the interest or income is
paid. TREC Rule § 535.146(j).
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List of PM Forms
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Residential Leasing and Property Management Agreement (TAR 2201)
Multiple Property Addendum (TAR 2204)
Addendum for Authorization to Act for Owner Before Owners’ Association (TAR 2205)
Owner’s Notice Concerning Condition of Property under Property Management
Agreement (TAR 2206)
Property Manager’s Inventory and Condition Report (TAR 2207)
Notice Terminating Right of Occupancy (TAR 2208)
Late Notice or Notice of Other Breach of Lease (TAR 2209)
Notice to Tenant of Change in Management and Accountability for Security Deposit (TAR
2210)
Agreement to Pay Past Due Amounts Under Lease (TAR 2213)
Report of Incident Occurring on Property (TAR 2215)
Itemization of Security Deposit (TAR 2216)
Notice of Landlord’s Intent Not to Renew (TAR 2217)
General Information for Tenant of Property Facing Foreclosure (TAR 2220)
Amendment to Residential Leasing and Property Management Agreement (TAR 2221)
Notice of Termination of Residential Leasing and Property Management Agreement (TAR
2222)
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The TAR Property
Management Agreement
Questions
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The TAR Property
Management Agreement
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