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Indemnification Clause in PM Agreement

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  • Posts 8
  • Votes 3

John Weiss
Contractor from Helena, MT

posted 10 months ago

Looking to hire a PM was going over the agreement. Saw this and it kind of concerns me that basically im on the hook for any stupid thing they do. As a General Contractor when i manage a site im used to being the one on the hook for everything. Not passing the buck to the homeowner that hired me. Is this standard fare for PM's. To me it defeats the primary reason for hiring a Property manager. 



9. INDEMNIFICATION AND HOLD HARMLESS
Except for the willful misconduct of Agent, Owner shall indemnify, defend, and hold Agent harmless from all loss, damage, cost,
expense (including attorneys' fees), liability, claims, investigations and lawsuits by third parties for personal injury, death or
property damage incurred or occurring in, on, or about the Premises that are connected with the management of the property,
during the term of this Agreement or after its termination, including any liability for error of judgment, a mistake of fact of law, or
for anything which Agent may do or refrain from doing hereinafter. Owner shall pay, except as provided elsewhere in this
Agreement, all expenses incurred by the Agent, including, but not limited to, reasonable attorney’s fees and Agent’s costs and
time in connection with any claim, proceeding, or suit involving an alleged violation by the Agent or Owner, or both, of any law
pertaining to fair employment, fair credit reporting, environmental protection, rent control, taxes, or fair housing, including, but
not limited to, any law prohibiting, or making illegal, discrimination on the basis of race, sex, creed, color, religion, national origin,
age, marital status, or mental or physical handicap, provided, however, that the Owner shall not be responsible to the Agent for
any expenses in the event that Agent is finally adjudicated to have personally, and not in a representative capacity, violated any
such law, unless such acts and or omissions are outside the course and scope of Agent’s duties hereunder. Nothing contained
herein shall obligate the Agent to employ counsel to represent the Owner in any such proceeding or suit. The Owner also
agrees to pay reasonable expenses (or an apportioned amount of such expenses where other employers of Agent also benefit)
incurred by the Agent in obtaining legal advice regarding compliance with any law affecting the Premises or activities related
thereto. If Agent or Owner are called upon to respond to any such claims, each party will promptly notifify the other. Upon receipt
of such notice, Owner will promptly notifiy Agent whether Owner will undertake the defense. If Owner does not respond
promptly and assume the defense of such claims, then Agent may take such steps as Agent deems necessary in connection
with the claims.
Agent assumes no responsibility or management of personal property left by Owner at Premises. Owner shall not hold the Agent
liable for any willful neglect, abuse or damage to the Premises by tenants or vandals or others nor for loss of or damage to any
personal property of the Owner or any tenant including loss due to exchange or theft by tenants or any third party. Further, the
Owner shall not hold the Agent liable for any error of judgment or mistake of law except in cases of willful misconduct or gross
negligence.

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Check Rosette Top Subjects:
Tenants, Rentals, and Finding & Screening Tenants
  • Posts 23K
  • Votes 15K

James Wise
Real Estate Broker from Cleveland, OH

replied 10 months ago

@John Weiss This is standard practice for the property management industry. If you found a property management company who didn't have one of these that'd be the real red flag.

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Check Rosette Top Subject:
Rentals
  • Posts 1.4K
  • Votes 2.1K

Patricia Steiner
Real Estate Broker from Hyde Park Tampa, Florida

replied 10 months ago

It's all blah, blah, blah...here's what matters:  do they have Professional Liability Insurance, often times called errors and omissions insurance (E&O insurance). It's standard coverage for claims against businesses that provide professional services — like property management. It covers the PM in case of wrongful evictions and tenant discrimination. I wouldn't hire a PM who could not provide me a copy of this coverage.

Also, ask for their "General liability insurance (aka CGL)." It protects PM  from both individual and business’ claims of bodily injury, medical costs, and damage to property. Apartment complexes and commercial buildings  always carry this but it's also common with residential. If a repairman is injured working at a property, if a potential tenant breaks something inside a property they're showing - it covers all of those and more.  

So if they had the foresight to lawyer up on the indemnification clause, hopefully they had it as well in securing professional liability coverage.  Hope this helps...





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