The Authority of a Tenant or Property Manager in Facilities Maintenance Contracts

By AIA Contract Documents

December 7, 2022

Contracts for facilities maintenance are designed to address the business conditions and legal environment of building repair, maintenance, or improvement between the client and the contractor. The client in the facility maintenance agreement may be any person or entity that wants to hire a contractor to repair, maintain, or improve a property. That means, the client, in a facility maintenance agreement, could be a property owner, a tenant, or a third-party property manager. If you are tenant or a third-party property manager acting as the client, you will want to be sure that your underlying agreement with the owner (e.g., the tenant lease or the property management agreement) allows you to act with the broad authority commonly found within facility maintenance agreements. Typically, the facility maintenance agreement will provide that the client and client’s party representative will have broad authority with respect to all matters pertaining to the agreement or the work.

Regardless of whether you are a tenant or a third-party property manager, your underlying agreement with the owner may have a section that restricts what property repairs, maintenance, and improvements you are able make. It may also clarify who will be required to pay for such improvements. The underlying agreement restrictions may: 1) allow work if the cumulative cost is below a specific dollar amount; 2) limit work to emergencies only; or 3) simply require owner approval in advance. If your underlying agreement restricts or is silent about your authority to perform the work, notify the owner, and ask for permission in writing before proceeding with the work. Alternatively, you may be able to negotiate an amendment to your underlying agreement to allow you to proceed.

In any event, before starting any project on a building or property you are renting or managing, it is a good idea to understand what, if any, authority you might have to begin that project, and what, if any, discussions you should have with the owner before you proceed.

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AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.