The Truth about Property Management Licenses
The truth is that when you go out there to hire a property manager for your rental property, everyone will claim they have plenty of experience. Here’s another truth: not all will be licensed to work on your real estate. What’s the big deal, you ask? Well, imagine one day you get a call by the local Burbank authority to explain why you have not complied with XYZ rental laws and pay a fine for it. That’s when you realize, you need a rental property manager who’s educated, well-versed in rental laws, as well as be able to handle official issues.
So, what should you really know about property management licenses for property managers in Los Angeles. Let us give you the lowdown.
Property Management License in California
There are two types of licensing available for property managers and realtors. Sales agent licensing allows licensees to conduct sale and purchase of property as well as deal with property management. This is especially ideal for those real estate agents who work in a property management firm.
There is another type of license which is called the broker’s license which allows licensees to independently adopt the role of property manager except for sales.
For both of these property management licenses, training and education are required before candidates are tested for their qualifications.
In the state of California, a property manager must work under someone who has a real estate broker’s license before they are allowed to apply for licensing examination. California has very strict codes of conduct for property managers which means licenses can be suspended, revoked, and sometimes checked.
So the next time you meet a property manager, you can ask them for their license.
Why Property Managers must Be Licensed
Isn’t that rude? Not really. You may think this is outrageous, but you’ll thank the state for taking care of minor details in real estate management when you, the landlord have zero knowledge about it.
Property managers need to know all the laws that affect the property they manage. They need to understand aspects of health, safety, and environment which directly impact the tenants as well as the real estate including security, health and bio hazards, insurance etc.
Your property manager is licensed only when they have considerable knowledge in dealing with building codes, rental control legislations, habitability standards, maintenance of real estate units, and rent and security deposit collection etc. Believe it or not, there are processes for them. And most importantly, they know how to do the paperwork to support all the above activities so that you can track, monitor and file your income for taxes.That’s a lot of work!
Definitely, and this is aside from the regular maintenance activities which does not have anything to do with their licensing: listing your property, screening tenants, drafting agreements, signing up tenants, regular property checks, reporting, and dealing with breakdowns, fixes etc. That’s why property managers can be your right hand man or woman where your rental property is concerned. If you have a number of units to put on rent or manage, the more reason you need to hire a property manager.
Exceptions to the Rule
So you think you’re savvy enough to take care of your own property? You’ll be happy to know that you don’t need to have a property manager license to conduct your business.
Furthermore, for residential properties, a property manager doesn’t need to have a broker’s license as long as they have power of attorney from the property owner. However, if a residential building has more than 16 habitable units then there must be a resident manager present to deal with everyday issues, whether or not s/he has a license is optional.
Having said that, a licensed property manager will do you more good than harm. Don’t be fooled by the low charge rate offered by an unlicensed property manager. In the end, you need an efficient, knowledgeable, and reliable person who can bail you out in difficult situations which might cost you more than you bargained for.
