Let's consider a situation: a client wants to buy a warehouse but does not want to handle its further maintenance. In this case, the manager undertakes in their own name to manage the property for a pre-agreed fee according to the interests of the settlor. The peculiarity of such an agreement is that the manager carries out management activities without any power of attorney. There are two main types of property management agreements.
First type of agreement gives the manager the right to dispose of trust property. After signing this agreement, the manager is given control over such property as cash, certain securities, and documents that certify the settlor's ownership rights to this property. In this case, the manager becomes a trustee who receives some property to manage, which they can manage subject to some additional requirements and in accordance with current legislation.
Second type of agreement is an option under which property that differs from the financial assets listed above is transferred for management. This refers to real or movable property. For example, a transaction for the sale of a warehouse with two types of transferred property has been completed. In this case, instead of a manager, an entrepreneur acts, for whom additional requirements are not provided for by law. When real estate is transferred for management, the agreement allowing its management must be notarized. It must be registered with the relevant registration authority.
It should also be mentioned that if the agreement does not specify a term, it is legally valid for only five years. At the same time, if the term of the agreement is expiring, one of the parties must necessarily submit an application for its termination or amendment of some conditions. Otherwise, the agreement is considered extended on the same terms and for the same period as previously specified.
Often people interested in a property management agreement have a question: is property management a power or a service? Unfortunately, the answer can be found or understood only when encountering a specific case in practice.
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