License To Manage In CA?
Okay, I've gotten different responses from my local rental housing association, the California Apartment Association, and an attorney. Here's the question:
Does someone you hire to manage rental property in California need to be licensed? This is for off-site management. If so, what kind of license is required?
Alternatively, can an owner sign a letter of agency authorizing someone to collect rent, handle tenant complaints, coodinate repair work, etc.?
Thank you very much for any information. I've been searching www.leginfo.ca.gov trying to find the CA code, but have come up with nothing applicable.
Tracy
Tracy,
Based on what I know, to hire someone to upkeep the property, collect the rent, etc. you do not need to have him/her file for license if you going to pay them in accord with let's say Independent Contractors Agreement or if you so prefer keep 'em as an employ, which is something I do not suggest because of the workers comp and other BS liabilities that comes with employment.
Good Luck!
Hi omega1,
Thanks for the reply. Some people have agreed with you, others disagree. Hopefully, we'll get to the bottom of this.
Tracy
California's real estate licensing law extends to property management activities. These include negotiating leases and collecting rents. There are certain requirements and some people are excluded. The state will probably look at the relationship between the parties and whether a fee or other consideration is given.
Rental owners and operators may run their own rental properties without being licensed. An on-site resident apartment manager is not required to be licensed.
I would say that an off-site, independent contractor would fall under the licensing requirements. A non-resident manager who is the employee of the rental property owner, is exempt from the licensing requirement.[ Edited by DaveT on Date 02/18/2004 ]
Hi Dave,
I appreciate your reply. Is it fair to say that the law is not exactly crystal clear on this? It might account for the varying opinions I've received.
Someone told me tonight that a property manager is required to have a real estate salesperson's license. Another person told me about the Certified Resident Manager license. So I guess I'm still confused, but I think I'm getting closer...
Thanks,
Tracy
I think the CA law is clear.
Generally, a real estate broker's license is required to do property management for others. Those who are excluded from the licensing requirement include:An employee of the broker, who performs the actual property management activities,
An owner/operator who manages his own property, or his employee who performs the day-to-day management,
An on-site resident apartment manager, to include managers of short term transient units (a motel, for example).Unless specifically excluded, all others who perform a property management function for others fall under the licensing law.
There is a property manager certification (not sure about resident manager certification) program through the National Association of Property Managers. This is voluntary and I have never heard of this certification referred to as a license.
Perhaps there is something in the local ordinances that requires a business license to operate a professional property management company, or to work as a resident manager.
If you want to read the language of the law yourself, refer to Section 10131and Section 10131.01 (Some Managers and Employees Exempt) of the California REAL ESTATE LAW AND SUBDIVIDED LANDS LAW
[ Edited by DaveT on Date 02/19/2004 ]
Hi Dave,
Once again, many thanks for helping me figure this out. I downloaded the pdf and I think I understand it.
In lieu of a license, or before a license can be obtained, do you think an owner can complete a letter of agency which authorizes someone (an independent contractor) to collect rent and negotiate/sign leases? One attorney I spoke with said he felt this would hold up; another through CAA said he wasn't so sure.
Thanks again for all the help,
Tracy
An independent contractor is not an employee. I would say that unless this person is working in an employee status, then your non-resident manager would need to be licensed.
Now, if this person is a member of your immediate family and worked without compensation, then I would say that your argument for exclusion would probably be upheld.
That said, I wonder why you are trying so hard to use an unlicensed property manager. If you are paying a management fee, why not get someone who at least has to answer to a higher authority (such as the state Real Estate Commissioner)?
Hi Dave,
I'm just trying to cover all the bases I can think of before buying some property later this year. I have a friend who would help with the management (I'm out of town on business a few times a year) and I'm trying to avoid paying prop. mgmt. fees as I'll be doing most of the management myself.
I appreciate the help, Dave
Tracy