Five things to verify before signing any Texas PM contract: (1) management fee structure — percentage of collected rent or scheduled rent, and whether it applies when the property is vacant; (2) placement fee — amount, and whether it is refunded if the tenant leaves within 60–90 days; (3) maintenance authorization threshold — the dollar amount above which you must approve a repair; (4) termination clause — notice period required and whether early exit triggers a fee; (5) vendor markup disclosure — whether the PM takes a cut on repair invoices on top of the management fee. Most contract disputes trace back to one of these five provisions being misunderstood at signing.
Management Fee: Collected vs. Scheduled Rent
The most important clause in the management fee section is whether the fee is calculated on collected rent or scheduled rent. 'Collected rent' means the PM takes their percentage only from what the tenant actually pays. 'Scheduled rent' means they take their percentage on what should have been collected — whether the tenant paid or not. On a $1,800/month rental at 9%, the difference is $162/month that you may or may not owe depending on whether your tenant is current. In Tarrant County, most professional PMs charge on collected rent. If a contract says 'scheduled rent,' ask why and consider it a yellow flag. Also confirm whether the management fee applies during vacancy. Some PMs charge a flat monthly fee or a reduced percentage even when no tenant is in place.
Placement Fee: Amount, Trigger, and Refund Policy
The placement fee — sometimes called a leasing fee or setup fee — is charged when the PM places a new tenant. In Tarrant County, this typically runs from a flat $250–$500 to as much as one month's rent, depending on the company. Ask three things: How much is it? When is it triggered (upon lease signing, upon move-in, or upon first rent payment)? And what is the refund policy if the tenant breaks the lease or vacates within the first 60–90 days? Some PMs will pro-rate or waive the fee if the placement fails early. Others will not. A tenant who leaves after 45 days is costly regardless of the refund policy, but a PM who stands behind their placement with a partial refund is signaling something about their screening confidence.
Maintenance Authorization Threshold
Every PM contract should specify the dollar amount above which a repair requires your explicit approval before work proceeds. The standard range in Tarrant County is $150–$500 for non-emergency repairs. Some contracts set it as low as $100; others allow the PM to authorize up to $1,000 without owner approval. Emergency situations — a water heater failure, a broken HVAC in July — typically have a separate clause allowing the PM to proceed without owner approval regardless of the cost. Understand both thresholds before you sign. If the non-emergency threshold is set too high, a PM can authorize significant work without your knowledge. If it is set too low, you will get approval requests for minor items that should just be handled.
Termination Clause: How to Exit Without Getting Trapped
Texas PM contracts are typically 12-month agreements with automatic renewal. The termination clause determines how — and at what cost — you can exit. Look for: required notice period (30, 60, or 90 days), whether early termination triggers a fee (common: one to two months of management fees), and what happens to your current tenant if you terminate. Some contracts include a 'tail clause' that entitles the PM to their management fee for the duration of any currently active lease, even after termination. This means switching managers mid-tenancy may still cost you fees to the outgoing PM through the end of the lease. That is not unreasonable, but it needs to be understood before you sign.
Vendor Markup and In-House Maintenance
Some property management companies have in-house maintenance staff or affiliated maintenance companies. When they do, their labor rate may be higher than market, or they may charge a markup on materials. Other PMs use third-party vendors but add a coordination fee of 10–15% on top of the vendor invoice. Neither practice is necessarily dishonest, but both need to be disclosed in the contract. Ask directly: 'Do you add a markup or coordination fee on vendor invoices?' and 'Do you use any in-house or affiliated maintenance services?' Get the answer in writing before signing. Over the course of a year with typical maintenance activity, a 15% markup on repairs can add $300–$800 to your operating costs on a single-family rental.
Common Questions
What is a reasonable property management fee in Tarrant County?
The market rate for full-service property management in Tarrant County is 8–10% of monthly collected rent. Some companies charge as low as 6–7% but offset with higher placement or renewal fees. Others charge a flat monthly rate. Evaluate the all-in annual cost, not just the monthly percentage — a 7% management fee with a $1,500 placement fee and a $300 renewal fee may cost more over a two-year tenancy than a 10% fee with no additional charges.
What is a renewal fee and is it standard?
A renewal fee is charged when the PM executes a lease renewal with a current tenant. It can range from $100–$300 flat to half a month's rent. It is fairly common but not universal. When comparing PMs, factor in the renewal fee for a tenancy that stays two to three years — it adds up. Ask whether the renewal fee applies for month-to-month extensions as well or only for a new fixed-term lease.
What happens to my tenants if I fire my property manager?
Your tenants' lease remains valid regardless of who manages the property — changing managers does not terminate or alter an active lease. The transition requires written notice to tenants identifying the new point of contact for rent payments and maintenance requests. Security deposits must be transferred to the new manager or returned per the lease terms. The outgoing PM should provide all lease documents, maintenance history, and tenant communication records. Get this documentation listed as a deliverable in the contract termination clause before you sign.
Can a PM require that I use their preferred vendors?
Some contracts include language giving the PM authority to use their preferred vendor list exclusively. This is not inherently problematic — a PM who has reliable, vetted vendors is providing value — but you should know whether you retain the right to use your own contractors for significant work. If you have a trusted HVAC contractor or plumber, confirm upfront whether the contract allows you to designate them. Some PMs will accommodate owner-preferred vendors for large-ticket repairs; others have vendor exclusivity built into their operating model.
Should I have an attorney review the PM contract before signing?
For a single-family rental where the contract is a standard Texas Association of REALTORS® form with minimal modifications, attorney review is optional but not necessary for most owners. If the PM is using a heavily customized contract with unusual fee structures or binding arbitration clauses, a one-hour attorney review ($150–$300) is worth it. The five provisions listed in this answer cover the most common contract issues — read them carefully yourself before deciding whether legal review is warranted.
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