SHORT ANSWER TO THE MAIN QUESTION

A Property Management Agreement is not regulated by the Czech Civil Code as one single universal named contract type.

Depending on the actual substance of the relationship, the arrangement may involve in particular:

• mandate-type obligations,
• representation,
• and the general rules on administration of another person’s property.

Under Czech law, a person entrusted with managing property belonging to someone else for the benefit of another person may fall within the rules governing administration of another person’s property. Czech law also distinguishes between ordinary and full administration.

A well-drafted Property Management Agreement should therefore define in particular:

• which property is managed,
• which activities the manager performs,
• which contracts the manager may enter into,
• what financial limits apply,
• how rent and other funds are handled,
• what information and documents must be provided to the owner,
• what the manager is responsible for,
• how the management relationship ends and what must be handed over.

The key question is not whether the manager “manages the property”, but how far their authority actually extends.

YOU MAY BE THINKING…

“Can’t the property manager simply deal with everything instead of me?”

“If I give them a power of attorney, do we still need a detailed agreement?”

“Can the manager sign lease agreements in my name?”

“Can they choose a contractor without asking me?”

“What if there is an emergency and they cannot reach me?”

“Can they collect rent?”

“Who holds the tenant’s security deposit?”

“How do I know whether the manager is charging only genuine costs?”

“Is managing an investment apartment the same as managing a building for an owners’ association?”

No.

And confusing those situations creates unnecessary risk.

CLIENTS OFTEN ASK…

Is a Property Management Agreement a mandate agreement?

Very often, it will have a strong mandate-type character.

Under a mandate arrangement, one party undertakes to handle a matter for another.

A property manager may therefore undertake to:

• communicate with tenants,
• arrange servicing,
• inspect the property,
• organise statutory inspections,
• handle operating statements,
• deal with day-to-day problems.

A mandate obligation is generally an obligation to perform the relevant activity properly and with due care, not automatically a guarantee of a particular result.

The exact agreement may, however, contain additional legal elements and should always be assessed according to its real content.

Can the property manager act directly on behalf of the owner?

Yes, if they have the appropriate authority.

However, two separate issues need to be distinguished:

the Property Management Agreement defines what the manager is required or permitted to do in relation to the owner,

while

the power of attorney defines the extent to which the manager may legally act in the owner’s name towards third parties.

For that reason, a clause saying:

“The Manager represents the Owner in all matters relating to the Property”

may be too vague to protect either party properly.

Can the property manager order repairs without the owner’s approval?

Yes, if the agreement gives them that authority.

In practice, it is useful to distinguish between:

routine maintenance

the manager may decide independently,

larger repairs

the manager obtains quotations and waits for the owner’s approval,

emergencies

the manager may take necessary steps without prior approval to prevent further damage.

This also reflects the general logic of ordinary administration of another person’s property, which focuses on preserving the managed property.

Can the property manager collect rent?

Yes, if the contractual structure and authority allow it.

But then further questions must be answered:

• which bank account receives the rent,
• who owns the account,
• when the manager must transfer funds to the owner,
• what may be deducted,
• whether the manager may set off their fee,
• how arrears are recorded,
• who pursues unpaid rent.

I would not leave this area to a clause saying:

“The Manager shall collect payments relating to the Property.”

Can the property manager sign lease agreements?

Yes, if properly authorised.

But the agreement should then also deal with matters such as:

• who sets the rent,
• minimum rent,
• maximum lease term,
• security deposit,
• pets,
• subletting,
• number of occupants,
• commercial lease terms,
• discounts or concessions.

A manager may have authority to select a tenant administratively, but not necessarily to rent the property to anyone at any price and for any duration.

Is property management the same as real estate brokerage?

No.

Basic property management and maintenance may fall within a general business activity.

Real estate brokerage, however, is separately regulated under Czech law.

A property manager does not automatically gain the right to perform every activity connected with letting or selling property merely because they “manage the property”.

WHAT THE LAW SAYS VS. WHAT HAPPENS IN PRACTICE

Czech law provides several relevant legal concepts.

One is mandate.

Another is administration of another person’s property.

In practice, however, clients do not usually say:

“I need a contractual combination of mandate and administration of another person’s property.”

They say:

“I own three apartments and I don’t want to deal with them.”

That sentence must then be translated into specific powers and duties.

Property management may mean only technical coordination

The manager:

• checks the condition of the property,
• reports defects,
• orders minor repairs,
• tracks inspections,
• communicates with suppliers.

They do not become involved in tenancy matters at all.

Or it may mean full rental management

The manager:

• communicates with tenants,
• hands over the property,
• deals with defects,
• collects payments,
• records arrears,
• arranges service-charge settlements,
• prepares lease renewals.

Or it may mean almost complete operation of an investment property

The manager may be responsible for:

• dozens of lease agreements,
• contractors,
• repairs,
• budgets,
• insurance,
• services,
• receivables,
• documentation,
• regular reporting.

That is a completely different level of responsibility.

The broader the management role, the less the agreement can function as a simple list of tasks. It needs a clear decision-making and control structure.

BIGGEST RISKS AND COMMON MISTAKES

❌ Mistake: the scope says only “comprehensive property management”

Consequence

Each party understands “comprehensive management” differently.

The owner expects the manager to deal with everything.

The manager assumes that major decisions still require the owner’s approval.

Better approach

Divide the management role into categories such as:

• technical,
• administrative,
• tenancy-related,
• financial,
• legal or contractual.

Then define the powers within each category.

❌ Mistake: no financial limits

The manager may “arrange repairs”.

They order work costing CZK 180,000.

The owner expected only minor maintenance.

Consequence

A dispute arises over whether the manager exceeded their authority and who bears the cost.

Better approach

For example:

• up to CZK 5,000 → manager decides independently,
• CZK 5,000–30,000 → prior electronic approval,
• above CZK 30,000 → written owner approval,
• emergency → necessary action without limit to the extent required to prevent damage.

The actual figures should of course reflect the property.

❌ Mistake: no emergency rule

A pipe bursts.

The owner is abroad.

The agreement says every repair above CZK 10,000 requires prior approval.

Consequence

The manager either does nothing and the damage increases, or acts and formally exceeds the contractual limit.

Better approach

Create a separate emergency authority requiring the manager to:

• minimise damage,
• inform the owner without undue delay,
• document the costs and steps taken.

❌ Mistake: the manager handles money, but the agreement does not regulate it properly

Consequence

It becomes unclear:

• whether funds belong to the owner,
• when they must be transferred,
• what can be deducted,
• who controls movements,
• where tenant deposits are held.

Better approach

Regulate cash flows and reporting separately and precisely.

❌ Mistake: the manager’s fee is “10% of income”, but nobody defines the income

10% of rent?

Also service-charge advances?

Tenant deposits?

Insurance proceeds?

Compensation for damage?

Consequence

The percentage is precise, but the calculation base is not.

Better approach

Define exactly which amounts are included and excluded.

❌ Mistake: the manager’s expenses are not separated from their fee

The manager receives a monthly fee.

They also order contractors, travel to the property and arrange technicians.

Consequence

The parties later argue:

“That should already have been included in the monthly fee.”

Better approach

Distinguish between:

• management fee,
• reimbursable expenses,
• external services,
• extraordinary work.

❌ Mistake: no reporting obligation

For several months, the owner receives only one net amount.

Then they discover:

• two tenants are in arrears,
• one lease has expired,
• a repair was never completed,
• an insurance claim was rejected.

Better approach

Use regular reporting with clearly defined content.

❌ Mistake: nobody defines who controls the contractors

The manager hires a contractor.

The work is defective.

The manager simply forwards the invoice to the owner.

Consequence

It is unclear whether the manager was required:

• only to appoint the contractor,
• or also to inspect the work,
• accept completion,
• pursue defects.

“Arrange the repair” may describe very different levels of responsibility.

HOW TO APPROACH IT – REALITY, NOT THEORY

1. First define what the manager is actually taking over

I would not start with a template.

I would start with a responsibility matrix:

The actual table will differ for each property.

But this quickly reveals what the owner really means by “management”.

2. Separate decision-making from implementation

This is crucial.

The manager may be authorised to:

obtain three quotations for a roof repair,

while the owner:

selects the contractor and approves the investment.

Or the manager may have authority to decide independently up to a financial threshold.

The agreement should distinguish clearly between:

manager proposes → owner decides → manager implements

and situations where no owner approval is required.

3. Set realistic financial limits

A single rental apartment needs different limits from an apartment building or office complex.

A good system will often combine:

• operating expenditure limit,
• capital expenditure limit,
• emergency authority.

4. Deal with tenants properly

If rental management is included, the agreement should define:

• who finds tenants,
• who checks applicants,
• who sets rent,
• who approves the tenant,
• who signs the lease,
• who performs handover,
• who deals with the deposit,
• who monitors payments,
• who handles late payment,
• who decides on termination.

5. Deal with the money

The parties should know:

• where rent is paid,
• where service-charge advances go,
• where deposits are held,
• who pays contractors,
• whether the manager may make payments directly,
• what limits apply,
• when the balance is transferred to the owner,
• how everything is documented.

6. Deal with contractors

The manager may:

• merely recommend contractors,
• appoint them in the owner’s name,
• contract in their own name for the owner’s account,
• or include certain services within their own management package.

These models are not the same.

The agreement should reflect the actual arrangement.

7. Set reporting requirements

For example, monthly reporting may include:

• rent received,
• arrears,
• expenses,
• repairs ordered,
• incidents,
• status of lease agreements,
• planned material expenditure.

Larger properties may require substantially more detailed reporting.

8. Think about termination at the beginning

After several years, the manager may hold:

• keys,
• access codes,
• contracts,
• technical documentation,
• supplier lists,
• tenant data,
• accounting documents,
• deposits,
• unresolved complaints,
• ongoing repair files.

The agreement should therefore specify:

what exactly must be handed over on termination and by when.

PRACTICAL EXAMPLES

The following are model examples.

👉 “The Manager may carry out routine maintenance”

The manager discovers that the boiler needs replacement.

The cost is CZK 120,000.

They treat it as routine technical maintenance and order a new boiler.

The owner wanted first to compare:

• repair,
• replacement,
• a different heating solution.

The problem did not arise because the agreement failed to mention repairs.

It arose because nobody defined the boundary between operational management and an investment decision.

👉 The manager selects a “good tenant”

The manager finds a tenant.

They sign a five-year lease at CZK 18,000 per month.

The owner had expected a shorter lease and rent of CZK 23,000.

The manager says:

“I was supposed to manage the property comprehensively.”

The owner says:

“I never authorised you to determine the price and commit me for five years.”

Again, the key question is not who seems intuitively right.

It is what authority the agreement actually granted.

👉 Emergency on Saturday evening

A pipe bursts.

The manager immediately calls an emergency contractor and orders work costing CZK 45,000.

The owner later objects that the manager’s approval limit was CZK 10,000.

The agreement needs a special rule for this.

An emergency is not simply an ordinary repair with a higher price. It is a situation where delay itself may cause additional damage.

👉 The owner does not know the tenant has not paid for three months

The manager is supposed to “manage the tenancy relationship”.

The tenant stops paying.

The manager sends reminders but does not tell the owner.

Three months later, the arrears are substantial.

The agreement should have defined:

• when arrears must be reported,
• who sends payment demands,
• who decides on legal recovery,
• who decides whether to terminate the lease.

WHY YOU SHOULD BE CAREFUL WITH “I’LL DO IT MYSELF”

A generic template can easily say:

The Manager shall ensure proper management of the Property, its maintenance, communication with tenants and related administration.

That sounds reasonable.

But it does not tell you:

• what the manager may decide independently,
• what they may merely prepare,
• how much they may spend,
• when they may enter into contracts,
• whether they may change suppliers,
• who sets rent,
• who approves tenants,
• who holds funds,
• when the manager must report a problem,
• what happens in an emergency,
• how expenses are documented,
• what must be handed over at termination.

AI can generate a very good list of typical property-management activities.

But unless it understands the particular property and the owner’s business model, it cannot determine whether the manager is supposed to be:

an administrator, property manager, attorney-in-fact, rental manager, technical coordinator – or effectively the operating manager of the entire property.

The agreement must be built around that distinction.

LAWYER’S RECOMMENDATION + CHECKLIST

For a Property Management Agreement, I would use one basic test:

If the owner were unavailable for a month, could I tell from the agreement exactly what the manager may do alone and what must wait for the owner’s approval?

If not, the manager’s authority is not defined precisely enough.

Checklist

• The property is precisely identified.

• The purpose and scope of management are defined.

• Technical management is described.

• Administrative management is described.

• Tenancy management is addressed where relevant.

• It is clear what the manager may decide independently.

• It is clear what requires owner approval.

• Financial limits are defined.

• A separate emergency regime exists.

• It is clear who contracts with suppliers.

• Contractor supervision is addressed.

• Representation of the owner is addressed.

• An appropriate power of attorney is granted where necessary.

• It is clear who signs lease agreements.

• It is clear who determines rent.

• Rent collection is addressed.

• Tenant deposits are addressed.

• Debt recovery is addressed.

• Bank account access is regulated.

• The manager’s fee is defined.

• Reimbursable expenses are distinguished from the fee.

• Reporting obligations are defined.

• Owner access to documents is regulated.

• Manager liability is addressed.

• Confidentiality and handling of tenant data are addressed.

• Termination is regulated.

• Handover obligations on termination are precisely defined.

FAQ

What is a Property Management Agreement?

It is an agreement under which a property owner entrusts another person with certain activities relating to management of the property.

Depending on the actual substance, the agreement may in particular involve mandate-type obligations and the Czech-law rules on administration of another person’s property.

There is no single statutory Property Management Agreement with a fixed mandatory content.

What can a property manager do?

Depending on the agreement, a property manager may for example:

• deal with operation and maintenance,
• communicate with tenants,
• appoint contractors,
• monitor inspections,
• collect payments,
• arrange service-charge settlements,
• maintain documentation,
• prepare or enter into contracts.

The scope is not automatic. It must be defined contractually.

Does a property manager need a power of attorney?

If the manager is to legally act in the owner’s name towards third parties, the authority to represent the owner should be properly established.

The Property Management Agreement and power of attorney serve different functions, and in many cases both are appropriate.

Can a property manager order repairs without the owner’s approval?

Yes, if the agreement gives them that authority.

In practice, a financial threshold combined with a separate emergency exception is usually advisable.

Can a property manager sign a lease agreement?

Yes, if appropriately authorised.

The agreement should also define the limits of that authority, such as minimum rent, maximum lease term and other terms that cannot be changed without the owner’s approval.

Can the property manager receive rent?

Yes, if the management model is structured that way.

The account, records, transfer deadlines and rules for deductions of expenses or fees should be clearly defined.

Is the property manager responsible for every defect in the property?

No.

A manager is not automatically liable simply because something breaks.

The relevant question is whether they breached a duty – for example by failing to inspect, failing to arrange a required statutory check, failing to inform the owner or failing to respond to a reported defect.

Is managing an investment apartment the same as managing a building for an owners’ association?

No.

Management of a building and land within Czech condominium ownership has its own statutory framework.

Where a Czech unit owners’ association (společenství vlastníků jednotek – SVJ) exists, the association remains the person legally responsible for management of the building and land, although it may outsource specific management activities to an external property manager.

An external property manager therefore does not automatically replace the SVJ or its governing bodies.