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What are Active Management Rights?

Ben Taylor
Ben Taylor

Active management rights give a person or company the right to manage another person's property, though the rights can be retained by the property owner. The property becomes an income-generating investment instead of merely an asset. Usually, active management rights pertain to properties in residential building complexes, such as condominiums, duplexes or apartments. Buying or selling these rights is legal, too, if the property owner wants to enlist a management services company. Some governments require a license before one can transact management rights regarding a specific property, though most deals regarding active management are between private parties.

An individual with active management rights over residential property, no matter the number of units, can act as a rental agent or caretaker for the property while being a resident of the unit. Active management rights permit the individual to find tenants for vacant properties. As manager or retainer, the individual should communicate with other tenants and owners, should be present and visible on the property and should conduct himself or herself as a leader to benefit everyone on the property.

Businessman with a briefcase
Businessman with a briefcase

Many active management rights transactions concern vacation properties, investment properties or other rentals, though they can also pertain to commercial properties, such as office space and industrial parks. Property developers and individuals hire property management services for a variety of reasons, including optimizing the managing of rent for tenants, collecting that rent and marketing the property. Active management services should provide all of the services of a landlord; the team should also provide reports to property owners, tenants and anyone else who has a vested interest in the well-being of the property. It is within the right of the property manager to seek out new investment opportunities for the property and those whose money is invested in it.

If a company owns a property's management rights, that company can hire a property manager to be on-site and manage the day-to-day concerns of tenants and other property owners. Typically, the manager has a residence on the property as well as an office, and the company provides him or her with the tools and other necessities of performing the job. The major responsibilities of the active manager are rent collection and responsible financial management, but the management company is not responsible for for paying or collecting property taxes or rental property insurance. If management rights are bought or sold, each party agrees upon the rights and liabilities covered during the sale. In some cases, leasing or renting and day-to-day maintenance rights are bought and sold as different transactions.

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