Oregon 30-Hour Real Estate Law Practice Test

What is the primary purpose of a property management agreement?

1. To provide a lease for tenants

2. To outline tasks and responsibilities

3. To set the rental price

4. To state the terms of sale

The correct answer is: To outline tasks and responsibilities

The primary purpose of a property management agreement is to outline tasks and responsibilities between the property owner and the property manager. This agreement serves to define the scope of work that the property manager will handle, which may include managing tenants, maintenance responsibilities, rent collection, property marketing, and financial reporting. By clearly delineating these responsibilities, both parties have a mutual understanding of roles, expectations, and the authority of the property manager in managing the property. While setting a rental price and other factors may be aspects of property management, they are not the core function of the property management agreement itself. The lease for tenants or terms of sale are separate legal documents that address different facets of real estate transactions, rather than the management of the property. Therefore, the correct answer reflects the central importance of defining responsibilities within the property management relationship.