What a management agreement is under Dutch law
Where management agreements are used
The same legal frame carries very different commercial arrangements, and the drafting has to follow the setting.Property management
The most common form is the property management agreement, under which an owner or investor delegates the running of let property to a professional manager. The scope typically covers finding and screening tenants, concluding and administering leases, collecting rent and chasing arrears, arranging maintenance and repairs, carrying out inspections and reporting periodically on income and expenditure.Two Dutch specifics deserve attention here. First, the manager who concludes leases and gives notice on behalf of the owner is acting on a power of attorney, and the scope of that authority needs to be recorded precisely, because a tenancy concluded outside the manager mandate still binds the owner towards a tenant acting in good faith. Second, residential tenancy law is largely mandatory, so an owner cannot instruct a manager to agree terms that the law does not permit; an instruction of that kind puts the manager in the position of having to refuse it.Artist and talent management
In the creative sector the manager represents the artist commercially: negotiating performance and recording contracts, handling publishing and image rights, and shaping the longer-term direction of a career. Remuneration is usually a percentage of the income the artist earns during the term.The points that cause disputes are predictable. Which income streams does the commission cover, and does it continue after the agreement ends for contracts concluded during it? Does the manager have authority to sign on the artist behalf, or only to negotiate? What happens to rights and recordings created during the term? Because the artist is often an individual rather than a business, the ordinary rules of contract law on unfair terms and on the limits set by reasonableness and fairness carry real weight, and long exclusive terms with automatic renewal are exactly the sort of clause a court will look at closely.Corporate and interim management
The third setting is corporate: a shareholder, a board or an investor engages an external party to run the company or a division, often during a transition, a turnaround or a period between permanent appointments. This is where the management agreement most often overlaps with company law, because the person managing the business may also be appointed as a statutory director, which is a separate relationship with its own rules. That combination is dealt with below.The clauses that decide the outcome
Scope of services
The description of the work is the spine of the contract. It should say what the manager will do, how often, and to what standard, in terms specific enough that a third party could tell from the document whether the work has been done. Conduct quarterly inspections and report in writing within two weeks is a workable obligation; manage the property professionally is not.The scope also has a legal function that is easy to miss: it marks the outer edge of what the manager is engaged to do, and therefore of what the manager can be held liable for failing to do. A scope that is left vague in the hope of flexibility tends to be read, after something has gone wrong, as covering whatever was omitted.Fee and expenses
Dutch law says only that the client owes a fee and, where none has been agreed, a customary or reasonable one, and that the client must reimburse the costs the manager incurred in performing the work. Everything else is for the parties.The models used in practice are familiar: a fixed periodic fee, which is predictable for both sides; a percentage of revenue, which ties the manager income to the performance of the asset; and a variable element linked to agreed targets. Whichever is chosen, the contract has to define the base precisely. Percentage arrangements founder on the difference between gross and net, on whether the percentage applies to invoiced or to collected sums, and on which items count as costs. Target-linked fees founder on targets that are not measurable or that depend on factors outside the control of the manager. Write down who calculates the figures, on what data, and what happens if the parties disagree about them.Authority and powers
Managing an asset means making commitments, and the contract has to state which commitments the manager may make alone. The usual solution is a threshold: expenditure and obligations below an agreed limit are for the manager, above it the written approval of the owner is required. Certain categories are normally reserved regardless of value, such as litigation, the engagement of staff, and anything that binds the owner beyond the term of the agreement.Two cautions. Internally agreed limits do not automatically bind the outside world: if the manager holds a power of attorney and exceeds an internal limit, the counterparty who did not know and did not need to know of that limit may still hold the owner to the deal, leaving the owner with a claim against the manager rather than a way out of the contract. And where the manager is also a statutory director of the company, the statutory power to represent the company cannot be limited with effect against third parties; internal restrictions bind the director, not the party on the other side of the table.Liability, exclusions and indemnities
The starting point is ordinary contract law: a manager who fails to perform is liable for the resulting damage. Contracts usually adjust that position with a limitation of liability, an exclusion of indirect and consequential loss, and an indemnity for third party claims arising from the proper performance of the work.Such clauses are valid in principle, but not unconditionally. A limitation of liability can be set aside where reliance on it would be unacceptable according to standards of reasonableness and fairness, which is the position a court will readily take in cases of deliberate misconduct or gross negligence. Where the clause appears in general terms and conditions there is a further layer of control, and where the other party is a consumer the standards are stricter again. An indemnity should therefore be limited to acts performed in good faith within the scope of the assignment, and it should exclude intent and gross negligence expressly, which protects the owner and makes the clause more robust rather than less.Insurance belongs in the same discussion. Professional indemnity cover for the manager, and directors and officers cover where a statutory directorship is involved, do more practical good than a paragraph allocating a risk that neither party can carry.Confidentiality, data and the GDPR
A manager almost always handles personal data belonging to the client: tenant files, staff records, customer databases. That makes the arrangement a data protection matter as well as a contractual one. Where the manager processes those data on the instructions of the owner and for the purposes of the owner, the owner is the controller and the manager is a processor, and the General Data Protection Regulation requires a written processing agreement covering the subject matter and duration of the processing, the security measures, the use of sub-processors, assistance with the rights of data subjects, the handling of data breaches and what happens to the data when the arrangement ends.Where the manager determines its own purposes, for instance by using the data for its own commercial activities, it is a controller in its own right and the analysis changes. Settle which of the two applies at the outset, because the answer decides who is accountable to the supervisory authority and to the individuals concerned. A confidentiality clause is not a substitute for this: confidentiality protects the client, whereas data protection law protects the people whose data are being processed.Non-competition and client protection
Restrictive covenants are treated differently in an assignment than in employment. The strict statutory rules on non-competition clauses in employment contracts, including the requirement of writing, the limits on fixed-term contracts and the possibility of compensation, do not apply to an overeenkomst van opdracht. The parties are largely free to agree what they wish.That freedom is not unlimited. A clause that is unreasonably wide in scope, duration or geography can be moderated or set aside on the basis of reasonableness and fairness, and competition law sets its own outer boundary. In practice a clause aimed at protecting the specific relationships and information the manager gained through the assignment is enforceable; a clause that simply prevents an experienced professional from working in their own sector for years is not. Note the reverse risk too: an unusually strict non-competition and instruction regime is one of the features that makes a court more inclined to see an employment relationship.Term, renewal and exit
The term should be a deliberate choice rather than a default. A first term of a year with an agreed extension gives both sides a genuine opportunity to reconsider; automatic renewal for a further long period, terminable only in a narrow window, is the clause that produces the most complaints and the one most often forgotten until it has already rolled over.The exit provisions matter more than anything else in the contract, and Dutch law has its own rules about them, dealt with in the section on ending the agreement below. What the contract should do is set out the notice period, the form in which notice must be given, what happens to work in progress, how the final account is drawn up, and the obligations that survive termination, which normally include confidentiality, the return of records and data, and the transfer of files needed to continue running the asset.The real risk: is it an assignment or an employment contract?
Enforcement has resumed
For years the tax authorities applied an enforcement moratorium in this area, which allowed a good deal of ambiguity to persist. That moratorium ended on 1 January 2025, and enforcement against false self-employment resumed from that date, without retroactive effect for earlier periods. A transitional approach was applied in the first year for parties who could show they were actively regularising their arrangements, but the underlying rules did not change: they are simply being applied again.The legislative picture is still moving. The bill introducing a legal presumption of employment based on an hourly rate below a set level has been adopted and was published in the Staatsblad on 29 June 2026, but it enters into force by royal decree, so the date has to be checked before relying on it. The part of the original proposal that would have clarified the qualification test itself did not survive. Until any new rule enters into force, the assessment is the one described above.The consequences of getting this wrong fall mainly on the client. Reclassification can mean payroll taxes and social security contributions being levied retrospectively, pension obligations, and the application of dismissal protection, so that a relationship the client believed it could simply end turns out to require the consent of the UWV or a decision of the subdistrict court. Our guide to Dutch employment law sets out that protection in more detail.When the manager is also a statutory director
Corporate management agreements often go together with an appointment as statutory director, and the two relationships must be kept apart in the drafting because they end in different ways.The appointment is a matter of company law. The body competent to appoint a director, normally the general meeting, may suspend and dismiss that director at any time. That power cannot be contracted away, and no notice period in a management agreement changes it. What a dismissal decision does not automatically do is end the contract under which the manager is paid, and this is where careless drafting becomes expensive.Where an individual is engaged directly and is both director and employee, the position under Dutch case law is that a valid corporate dismissal in principle also ends the employment relationship, unless a statutory prohibition on termination applies or the parties have agreed otherwise. Where the manager is engaged through a management BV, the corporate dismissal ends the directorship but leaves the management agreement standing until it is terminated in accordance with its own terms. A well-drafted agreement therefore links the two expressly, by providing what happens to the assignment if the appointment ends, and on what terms.Liability deserves the same care. A statutory director who performs their task improperly can be held liable to the company where a serious reproach can be made, and a management BV does not shield the individual behind it from that exposure; nor does it prevent liability towards third parties in cases of serious personal fault. Directors and officers insurance, and a clear division between the tasks performed as a director and those performed under the assignment, are the practical answers. Our overview of Dutch corporate law explains the wider framework.Ending a management agreement
What happens if the asset is sold
A management agreement does not automatically follow the asset. Selling the property or the shares in the company does not transfer the contract with the manager: transferring a contract as a whole requires a deed and the cooperation of the other party, and without that the seller remains bound. In share transactions the company itself usually remains the contracting party, so the agreement continues, which is precisely why a buyer should review it during due diligence and why change of control provisions belong in the drafting. In asset transactions the seller is left with an agreement to manage something it no longer owns, and the only way out is termination on the contractual or statutory grounds. Deciding in advance what a sale means for the assignment saves a negotiation at the least convenient moment.Drafting an agreement that holds
Most of the work in a good management agreement is done before any clause is written, by describing accurately what the parties actually intend to do. A few habits make the difference.Write in plain language and be concrete. Dates, quantities, thresholds and deadlines are worth more than adjectives, and an obligation that cannot be tested is not an obligation. Define how performance will be measured, in terms that both sides can verify from records that already exist; targets that depend on data only one party holds are a source of conflict rather than a solution to it. Set out how the parties will deal with a disagreement before one arises, including who talks to whom, within what period, and whether a step such as independent advice on the contract or mediation precedes proceedings.Then test the document against reality. If the intention is a genuine assignment, the agreement must describe an assignment and the parties must then behave accordingly, because a contract that is contradicted by daily practice is worth very little. Review the arrangement periodically, particularly where a temporary engagement has quietly become a permanent one: the longer a single client relationship lasts, the more the qualification question presses.Finally, resist the international template. Clauses on indemnification, termination for convenience and governing law are drafted for legal systems that allocate risk differently, and provisions that make perfect sense elsewhere may be unenforceable, superfluous or actively harmful under Dutch law. The reverse also holds: the statutory rules on assignment described above apply whether or not the contract mentions them.How we can help
Law & More draws up and reviews management agreements for owners, investors, companies and managers, assesses the risk that an arrangement will be treated as employment, structures the relationship between a management agreement and a statutory directorship, and advises on termination and on disputes arising from these contracts. If you are about to enter into or end a management agreement, we are happy to look at the document and the way it works in practice before positions are fixed.Frequently asked questions
When people deal with management agreements, a few practical questions come up again and again. The answers below cover the most common ones.How long does a management agreement usually last?
There’s no single answer here—the length, or term, of an agreement really depends on the industry and what’s being managed. A one-year term is a pretty common starting point. It gives the manager enough runway to prove their worth without locking the owner into a long-term relationship from the get-go.
That said, for bigger assets like hotels or complex corporate entities where long-term strategy is everything, you’ll often see terms of three to five years. Many contracts also have an automatic renewal clause built in. This means the agreement will roll over for another term unless one party gives notice to terminate, usually 60 or 90 days before the current term ends.
Can you get out of an agreement early?
Yes. Under Dutch law the client can in principle terminate an assignment at any time, and the contract sets out the conditions. Your ability to walk away hinges entirely on the termination clauses written into your specific agreement. A well-drafted contract should always give you a way out.
Generally, this is handled in two ways:
- Termination for Cause: This lets you end the agreement if the other party isn’t holding up their end of the bargain. Think of a manager who consistently fails to perform or an owner who doesn’t provide the necessary funds.
- Termination without Cause: This is your essential “no-fault” exit. It allows either side to terminate for any reason at all, as long as they give proper written notice—typically between 30 to 90 days.
Without clear termination clauses, trying to end a contract before its term is up can get messy and could easily lead to a legal battle over breach of contract.
What happens if the manager isn’t performing well?
If your manager is falling short, the first thing to do is pull out the agreement. A good contract will define clear performance standards and metrics (KPIs). If those targets aren’t being met, the agreement should spell out the next steps. This usually involves issuing a formal notice of default, which gives the manager a set period to fix the problems.
If things don’t improve after that notice period, your right to terminate for cause should kick in. This is exactly why having objective, measurable performance metrics in the contract is so critical—it takes the guesswork out of the equation and gives you a solid foundation for taking action.
Do I really need to hire a lawyer?
While you could grab a template off the internet, it is highly advisable to have a lawyer either draft or, at the very least, review your management agreement. A legal expert will tailor the document to your specific needs, safeguard your interests, and make sure everything is compliant with local laws, such as those in the Netherlands.
Think of it this way: the upfront cost of getting proper legal advice is often a tiny fraction of what a poorly written contract could cost you in disputes and liabilities down the road.
