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

An agency relationship between a property owner and a property manager is typically established through a management agreement. This formal contract clearly outlines the responsibilities and expectations of both parties. It defines the scope of the property manager's authority, the duration of the agreement, the compensation structure, and any specific duties that the property manager will undertake, such as handling tenant relations, maintenance, and financial management.

By establishing this agreement, both the property owner and the property manager ensure clear communication and legal protection, which helps to prevent misunderstandings and disputes down the line. Verbal agreements, while they may establish some level of understanding, lack the formality and legal backing that a written management agreement provides. State licensing is necessary for property managers to operate legally but does not itself create an agency relationship. Property listings are related to marketing a property for sale or lease, and do not establish an agency relationship in the context of property management.