Are Lock-In Contracts with Real Estate Agencies Good or Bad?
Short answer: A contract is great when it’s paired with a clear Service Guarantee that gives you an exit if the agency doesn’t deliver.
Why contracts exist (and how they protect you)
Nearly everything important in life runs on agreements — your mortgage, utilities, insurance, even your mobile plan. Your property management is no different. A written managing authority (the contract) sets out:
- What the agency must do (scope of service, communication standards, reporting).
- What you agree to (fees, instructions, access, timely approvals).
- How issues are handled (timeframes, escalation, exit options).
Done properly, the contract holds the agency accountable and gives you a clear remedy if they don’t deliver. It also gives your property manager team stability to do their best work for you.
What is a Service Guarantee?
A Service Guarantee is a written promise that defines the minimum service you’ll receive and the exit rights you have if standards aren’t met. In short, it replaces vague “no lock-in” slogans with clear, measurable commitments.
- Leasing timeframes: e.g., lease within a set number of weeks, or you can exit.
- Communication standards: post-home open feedback, routine inspection updates, and response times.
- Reporting & access: property condition reports, financial statements, and owner portal access.
How a contract + guarantee works in practice
- Scope is clear. You know exactly what’s included, and when.
- Performance is measured. Leasing timeframes, communication, and reports are tracked.
- If standards slip, you can exit. The guarantee spells out your rights to terminate without fuss.
This approach protects you while encouraging the agency to maintain high standards — not rely on vague promises.
Pros & Cons: “No Lock-In” vs “Contract + Service Guarantee”
Both approaches involve responsibilities. The difference is whether the agency wants to be held to them in writing.
“No Lock-In” Management
- Pros:
- Easy to leave if unhappy.
- Low perceived risk for first-time landlords.
- Cons:
- Standards often aren’t written, so accountability is fuzzy.
- If they won’t let you hold them to their own contract, how do you know they won’t walk when things get difficult — usually your biggest time of need?
- Can signal low confidence or inconsistency.
Contract + Service Guarantee
- Pros:
- Clear standards in black & white.
- Exit rights are written if standards aren’t met.
- Encourages accountability and professionalism.
- Team stability = better long-term service.
- Cons:
- Some landlords perceive “contract” as restrictive — but with a genuine guarantee, it’s protective, not trapping.
Red flags to watch for
- No written standards. If there’s no documented service promise, it’s just talk.
- “Trust us” only. Confidence is great — written guarantees are better.
- Confusing exit terms. You should clearly see when and how you can leave.
- Reluctance around contracts. Property management is a contract-driven service — avoiding contracts is a warning sign.
Our Service Guarantee (Mandurah City Real Estate)
- Leasing timeframe: If we can’t lease your property within 3 weeks, we have 1 additional week. If it’s still not leased, you’re free to exit.
- Communication: Feedback after home opens, routine inspection updates, and timely responses within agreed timeframes.
- Reporting & access: Property condition reports, monthly/EOFY financial statements, and owner portal access.
- If we fail the standard, you can exit: If we don’t meet the written standards and haven’t rectified promptly, you’re not locked in.
FAQs
Is a lock-in contract always bad for landlords?
What if the agency under-delivers?
Why do agencies prefer contracts?
Does “no lock-in” mean better service?
Talk to a property manager
Want a copy of our Service Guarantee and managing authority? We’ll send the exact standards we work to, in writing.
Join The Discussion