> ## Documentation Index
> Fetch the complete documentation index at: https://docs.nyumbazetu.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Owner contracts

> Management agreements — commission terms, service-type scope, statement cadence and payout thresholds.

**Owners → Contracts → `/owner-contracts`** <sup>Beta</sup>

An owner contract is the management agreement expressed in terms the system can act on: what you
manage, what you charge for it, and how often you settle.

## What a contract defines

| Section                        | Contents                                                                                               |
| ------------------------------ | ------------------------------------------------------------------------------------------------------ |
| **Contract summary**           | Contract name, owner, status, and validity dates.                                                      |
| **Units in scope**             | The units this contract covers.                                                                        |
| **Service types in scope**     | Which income streams the commission applies to — rent only, or rent plus utilities and service charge. |
| **Commission**                 | The management fee: rate or amount, applied per service type where terms differ.                       |
| **Statement / payout cadence** | How often statements are produced and payouts made.                                                    |
| **Settlement lag**             | How long after the period end the payout is made — the gap that lets receipts clear.                   |
| **Min disbursement**           | The threshold below which a payout is carried forward rather than paid.                                |
| **Negative balance**           | How a period that ends owing you money is handled.                                                     |
| **Accounting treatment**       | How the contract's amounts are recognised.                                                             |
| **AR control account**         | The receivable control account used.                                                                   |
| **Version history**            | Every version of the terms, with valid-from and valid-to dates.                                        |

## Versioned terms

Commission terms are **versioned, not overwritten**. Each version has a `valid from` and
`valid to`, so a statement produced for March uses March's terms even if the agreement changed in
May.

<Warning>
  Editing terms creates a new version from an effective date. It does not rewrite statements already
  produced under the old terms — and it should not. If a historical statement is genuinely wrong,
  regenerate it deliberately rather than back-dating a term change.
</Warning>

The contract detail page shows **rule source** and **override** per line, so you can see whether a
commission rate came from the contract default, a service-type-specific rule, or a manual override.

## Creating a contract

<Steps>
  <Step title="Start from the owner">
    **Owner → Contracts → Add**, so the contract is bound to the right party.
  </Step>

  <Step title="Name it meaningfully">
    Owners frequently have more than one — a residential block and a commercial unit on different
    terms.
  </Step>

  <Step title="Set the validity dates">
    Valid from is the date the terms take effect, not the date you typed them in.
  </Step>

  <Step title="Attach the units">
    Only units in scope generate income and costs on this contract's statements.
  </Step>

  <Step title="Set the service types in scope">
    A common mistake: charging commission on utility recoveries that the agreement excludes.
  </Step>

  <Step title="Set the commission">
    Rate or fixed amount, per service type where the agreement differentiates.
  </Step>

  <Step title="Set cadence, lag and thresholds">
    Statement frequency, settlement lag, minimum disbursement, and negative-balance handling.
  </Step>

  <Step title="Save and verify on the next statement">
    The first statement under a new contract is worth checking line by line.
  </Step>
</Steps>

## Cadence, lag and thresholds in practice

| Setting              | Typical value        | Why it matters                                                                                                                |
| -------------------- | -------------------- | ----------------------------------------------------------------------------------------------------------------------------- |
| **Cadence**          | Monthly              | Determines statement periods.                                                                                                 |
| **Settlement lag**   | 5–10 days            | Rent received on the 28th has not cleared by the 1st. A lag that is too short produces payouts against uncleared money.       |
| **Min disbursement** | A small fixed amount | Prevents a bank charge exceeding the payout. Amounts below it carry forward.                                                  |
| **Negative balance** | Carry forward        | A period where costs exceeded income leaves the owner owing you; carrying it forward is normally cleaner than invoicing them. |

## Contract lifecycle

| Event                    | Action                                                                                                                                      |
| ------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------- |
| Terms renegotiated       | Add a new version with the new effective date.                                                                                              |
| Units added or removed   | Update units in scope; income follows from the effective date.                                                                              |
| Contract ends            | Set valid-to. Statements stop after the final period; any carried balance is settled.                                                       |
| Owner sells the property | End the contract and start a new one with the new owner. Do not re-point the existing contract — the history belongs to the previous owner. |

## Next steps

<Columns cols={2}>
  <Card title="Owner statements" icon="file-invoice-dollar" href="/guides/owner-statements">
    What the contract's terms produce each period.
  </Card>

  <Card title="Owner disbursements" icon="money-bill-transfer" href="/guides/owner-disbursements">
    Paying the net payable.
  </Card>
</Columns>