A General Management Agreement, commonly known as GMA, is a legally binding agreement between a management company and their client. The agreement outlines the terms and conditions of the working relationship, including the responsibilities of both parties, payment structure, and the duration of the agreement.
A GMA is essential for clients seeking professional management services, particularly for those who own a significant number of assets or businesses. The agreement provides a clear understanding of what the management company will do to ensure the client`s assets or business(es) grow and flourish.
The agreement typically includes provisions related to the management company`s responsibilities, such as marketing, financial reporting, and administrative tasks. The client`s obligations may include providing the necessary information and resources for the management company to perform their duties effectively.
It is essential to identify the scope of the agreement at the onset; this helps avoid potential misunderstandings or conflicts. The scope of the agreement typically includes a description of the services that the management company will provide. These services may include, among others, marketing and advertising, financial administration, human resources, and risk management.
A critical aspect of the GMA is the payment structure. The agreement should outline the payment terms, including the management fee, any additional charges, and how the payment will be made. Additionally, the agreement should specify the duration of the contract and how it may be renewed or terminated by either party.
A well-drafted GMA ensures that both parties understand their roles and responsibilities, payment structure, and other important details related to the working relationship. It also provides a roadmap for performance evaluation and dispute resolution.
In conclusion, a General Management Agreement is an essential document that outlines the expectations and responsibilities of both parties, providing clarity and direction. It is, therefore, crucial to have a well-drafted GMA that protects the interests of all parties involved.