Property management is the operation, control, maintenance, and oversight of real estate and physical property. This can include residential, commercial, and land real estate. Management indicates the need for real estate to be cared for and monitored, with accountability for and attention to its useful life and condition. This is much akin to the role of management in any business.
Property management is the administration of personal property, equipment, tooling, and physical capital assets acquired and used to build, repair, and maintain end item deliverables. Property management involves the processes, systems, and workforce required to manage the life cycle of all acquired property as defined above, including acquisition, control, accountability, responsibility, maintenance, utilization, and disposition.
An owner of a single-family home, condominium, or multi-family building may engage the services of a professional property management company. The company will then advertise the rental property, handle tenant inquiries, screen applicants, select suitable candidates, draw up a lease agreement, conduct a move-in inspection, move the tenant(s) into the property and collect rental income. The company will then coordinate any maintenance issues, supply the owner(s) with financial statements and any relevant information regarding the property, etc.
Roles
This profession has many facets, including managing the accounts and finances of real estate properties and participating in or initiating litigation with tenants, contractors, and insurance agencies. Litigation is sometimes considered a separate function set aside for trained attorneys. Although a person will be responsible for this in their job description, there may be an attorney working under a property manager. Special attention is given to landlord/tenant law; most commonly, evictions, non-payment, harassment, reduction of pre-arranged services, and public nuisance are legal subjects that gain the most attention from property managers. Therefore, it is a necessity that a property manager is current with applicable municipal, county, state, and Federal Fair Housing laws and practices.
Licensing
Australia
Every state of Australia except South Australia require a proper license in order to manage a property. The purpose of this regulation is to ensure that a property manager is as well-prepared for the job as possible. (There may be exceptions like managing an extremely small property for a relative.) In South Australia, if you run a property management business, you must be a registered land agent.[1]
All tenancy applications received are reference checked inclusive of identification, means of income, previous tenancy references and workplace references.[citation needed] Additionally tenants are checked against the National Tenancy Information Centre of Australia which records details of defaulting tenants.[citation needed]. In recent year property management in Australia has changed from a brick and mortar business to virtual online.
Canada
In Canada, the laws governing property management and landlord/tenant relations are, generally speaking, a Provincial responsibility.[citation needed] Each Province and Territory makes its own laws on these matters. In most cases, any person or company can offer property management services, and there are licensing requirements.[citation needed] Other than specific laws in each Province and Territory governing these matters, they are governed by English Common Law, except in the province of Quebec where the Civil Code is used in place of English Common Law.[citation needed] In some cities, the Provincial Legislation is supplemented by City by-laws.
British Columbia
The licensing of property managers is regulated by the provincial government and licensing by the BCFSA is a regulatory agency established by the provincial government.Its mandate is to protect the public interest by enforcing the licensing and licensee conduct requirements of the Real Estate Services Act. The BCFSA is responsible for licensing individuals and brokerages engaged in real estate sales, rental and strata property management. The BCFSA also enforces entry qualifications, investigates complaints against licensees and imposes disciplinary sanctions under the Act.
The BCFSA is responsible for ensuring that the interests of consumers who use the services of real estate licensees are adequately protected against wrongful actions by the licensees. A wrongful action may be deliberate or may be the consequence of inadequate exercise of reasonable judgment by a licensee in carrying out their duties and responsibilities.
The BCFSA is responsible for determining what is appropriate education in real estate matters for individuals seeking to be licensed as real estate practitioners and arranging for licensing courses and examinations as part of the qualification requirement for licensing. Under the authority of the BCFSA, licensing courses are delivered by the UBC Sauder School of Business, Real Estate Division.
Ontario
In Ontario, no licensing is required to operate, however ACMO – the Association of Condo Managers of Ontario is a self-governing body for certification and designation of its members who run buildings with more than 600 units. (RECO) the Real Estate Council of Ontario, regulates licensed realtors in Ontario. The provincial government is revising its condominium act. After public consultation, it hopes to put forth legislation during the 2015–2016 session requiring Condo Management firms and staff or condo employees and boards to be accredited.
Saskatchewan and Alberta
Both require property managers to hold a real estate license.
Germany
In Germany, property management is divided into the areas of home owner's association management (WEG-Verwaltung), rental management (Mietverwaltung), and special property management (Sondereigentumsverwaltung) with different clients and tasks. Since 2018, a license in accordance with the Trade Regulation Act (§ 34 C GewO) is mandatory for property managers. This requires sufficient insurance as well as sound financial circumstances and reliability. There are no requirements regarding professional trainings or degrees. However, there is a training obligation of twenty hours within a period of three years. Receiving a license as a property manager in Germany is accompanied by membership of the relevant chamber of industry and commerce.[2]
Hong Kong
In Hong Kong, property management companies (PMCs)[3] and property management practitioners (PMPs)[4] are regulated under the Property Management Services Ordinance (PMSO) (Chapter 626 of the Laws of Hong Kong),[5] which was enacted in 2016. Only some sections under the PMSO have commenced operation and they are the ones concerning the establishment of the Property Management Services Authority (PMSA) as the regulator for the industry. Apart from establishing the PMSA, the PMSO provides a legal framework for the regulatory regime, and the details of the regime, including the licensing criteria for PMCs and PMPs, are being formulated by the PMSA (public consultation underway[6]) and will be set out in subsidiary legislation. Other sections of the PMSO will commence operation after the subsidiary legislation is passed by the Legislative Council of Hong Kong and commences operation.
Certain classes of persons are exempted from the licensing requirement.[7] Those not exempted are required to obtain a licence and failure to do so is a criminal offence subject to a maximum penalty of a fine of HK$500,000 and imprisonment for two years.[8] Those who are licensed are subject to disciplinary actions (including verbal warning, written reprimand, penalty up to HK$300,000, imposition of a condition on licence, suspension and revocation of licences[9]) by the PMSA if they commit a "disciplinary offence" as defined under section 4 of the PMSO.[10] The PMSA may issue codes of conduct containing practical guidance to licensees, including the matters that the PMSA considers to be relevant to determining whether a licensee has committed a disciplinary offence.[11]
Under the PMSO, property management services (PMSs) are to be prescribed under seven specified categories[12][13] as follows:
General management services relating to a property;
Management of the environment of a property;
Repair, maintenance and improvement of a property;
Finance and asset management relating to a property;
Facility management relating to a property;
Human resources management relating to personnel involved in the management of a property; and
Legal services relating to the management of a property.
Only those PMCs providing PMSs falling within more than one category of PMSs are required to be licensed,[14] and individuals who assume a managerial or supervisory role in these PMCs are also required to be licensed.[15] In other words, PMCs providing PMSs falling within only one category of PMSs are not required to be licensed, and individuals working in the front line without assuming a managerial or supervisory role are not required to be licensed either. All types of properties (i.e. whether residential, commercial or otherwise) are covered by the PMSO, but "property" is given a technical meaning and refers to those which have a deed of mutual covenant (DMC) (a document containing terms that are binding on all flat owners of a multi-unit or multi-storey building[16]) since only PMSs provided to buildings with multi-ownership are intended to be regulated.[17] In other words, PMCs and PMPs providing PMSs to properties without a DMC are not to be regulated under the PMSO.
India
In India, there is no statutory regulation of property management companies, real estate agents or developers. In 2013, a Real Estate Regulation and Development Bill was passed by the Union Cabinet, but has yet to take effect. The bill seeks to set up 3 regulatory bodies in the country. The Real Estate Regulation and Development Bill was passed by the Union Cabinet in early 2016 and this is expected to bring about a sea change in the management of real estate in India.[citation needed]
New Zealand
Commercial Property Management leasing agents in New Zealand are required to have a real estate agents licence and operate and audited trust bank account. Commercial leases are covered by the Property Law Act 1952.
Residential property management in New Zealand is an unlicensed and unregulated industry. Property managers in New Zealand do not require any registration, minimum knowledge or skill. The New Zealand Government reviewed whether all forms of property management need any legislation.[18] Following completion of the review, the Associate Minister of Justice, Hon Nathan Guy, announced on 2 July 2009 that no new occupational regulation would be imposed on property managers[19] in part due to there already being existing laws which could be used to protect consumers.
New Zealand licensed Real Estate Agents may offer Residential Property Management service with qualified Real Estate Agents as Property Managers, or property manager's working under the Licensed Real estate agency. Member Agents are supposed to adhere to the Real Estate Institute of New Zealand property management code of practice[20] which according to the REAA outlines industry best practices for dealing with the public. Critics state the Real Estate Agents Authority complaint committee as having less scope or jurisdiction for adverse judgement against negligent Property Management licences as they would otherwise to those in "real estate agency work",[21] unsatisfactory property management conduct cases can receive findings of "no further action" as opposed to "unsatisfactory conduct"[22] due to "conduct unrelated to estate agency work".[23] Best practice guidelines[20] imply Licensed Real Estate agencies conducting property management business should collect rent through an audited trust account which brings some certainty to the security of the Landlord and Tenants rental Monies though REAA cases implies that this is not always so.[23]
The Residential Tenancies Act 1986 sets out the rights and responsibilities of residential landlords and tenants, including the requirement to have a written tenancy agreement and the need to lodge tenancy bonds (if one is required) with the Ministry of Business, Innovation and Employment. The Tenancy Tribunal[24] and its adjudicators/mediators hear and make judgement on disputes (between landlord and tenants) in relation to any breaches of The Residential Tenancies Act 1986 and The Unit Titles Act 2010.
On July 1, 2019, the Healthy Homes Standards became law. The healthy homes standards introduce specific and minimum standards for heating, insulation, ventilation, moisture ingress and drainage, and draught stopping in rental properties. All private rentals must comply within 90 days of any new or renewed tenancy after 1 July 2021, with all private rentals complying by 1 July 2024[25]
The Unit Titles Act 2010 sets out the law for the ownership and management of unit title developments, where multiple owners each hold a unit title. The Act covers the set-up of such developments, body corporate governance, the rights and obligations of the body corporate and unit owners, disclosure between buyers and sellers, dispute resolution etc. The Unit Titles Regulations 2011 provide operational guidelines. The body corporate is responsible for financial and administrative functions relating to the common property and the development. All unit owners are members of the body corporate. A body corporate can delegate some of its powers and duties to a body corporate committee and a professional body corporate manager may be contracted to provide services.[26]
Republic of Ireland
In the Republic of Ireland, there is no legal obligation to form a property management company. However, management companies are generally formed to manage multi-unit developments, and must then follow the general rules of company law in terms of ownership and administration.
Since July 2012, it has become mandatory for all property service providers, including property management companies, to be registered and fully licensed by the Property Services Regulatory Authority of Ireland.
The National Consumer Agency (NCA) has campaigned in this area, and in September 2008 it launched a website explaining consumer rights. The NCA does not have a legislative or regulatory function in the area, unless a consumer complaint is in relation to a breach of consumer law.
Romania
No specific regulatory or licensing body exists at this time (November 2012). However, under financial business law, Any business offering Property Management as a chargeable, fee earning act of commerce may only do so if such services are listed in their Company Acts of Constitutions, i.e., legally pre-declared list of business activities. Under Romanian law, no business can derive income from any such service that is not declared in this way and should be demonstrable upon request by the client of legal entities.
United Kingdom
In the United Kingdom, there is no statutory regulation concerning property management companies. Companies that manage rented residential property are often members of the Association of Residential Letting Agents. Companies or individual landlords who accept tenancy deposits for "assured shorthold tenancies" (the usual form of residential tenancy) are required by statute to be members of a Tenancy Deposit Scheme.
United States
Most states, such as New York,[27] and Colorado,[28] require property management companies to be licensed real estate brokers if they are collecting rent, listing properties for rent, or helping negotiate leases and doing inspections as a third-party. A property manager may be a licensed real estate salesperson but generally they must be working under a licensed real estate broker. Most states have a public license check system online for anyone holding a real estate salesperson or real estate broker's license.[29] A few states, such as Idaho, Maine, and Vermont do not require property managers to have real estate licenses. Other states, such as Montana, Oregon, and South Carolina, allow property managers to work under a property management license rather than a broker's license. Some states, like Pennsylvania, allow property managers to work without a real estate license if they do not negotiate leases, hold tenants' money, or enter into leases on the property owner's behalf.
Owners who manage their own property are not required to have a real estate license in many states; however, they must at least have a business license to rent out their own home. Owners who do not live near the rental property may be required, by local government, to hire the services of a property management company.[citation needed] Some states with high tourism numbers, such as Hawaii,[30] have strict property management rules.
In California, third-party apartment property managers must be licensed with the California Bureau of Real Estate as a Real Estate Broker. A broker's license is required for any person or company that, for compensation, leases or rents or offers to lease or rent, or places for rent, or solicits listing of places for rent, or solicits for prospective tenants, or negotiates the sale, purchase or exchanges of leases on real property, or on a business opportunity, or collects rents from real property, or improvements thereon, or from business opportunities.[31] California Code of Regulations, Title 25, section 42, requires property owners of apartment buildings with 16 or more units to have on-site resident managers living on their properties. There is no such requirement for apartment buildings with less than 16 units.[32]
In order to be able to manage properties in Panama, at that moment, no licenses are required, as long as the company is focused on managing properties. Nevertheless, a real estate company which plans to buy and sell properties requires a license.
Kenya
In Kenya the Estate Agents Registration Board (EARB)[33] is the regulatory body for estate agency practice in Kenya and it derives its mandate from Estate Agents Act, 1984 Cap 533[34] which was operationalized in 1987. As per the provisions of the Act, the Board is charged with the responsibility of registering estate agents and ensuring that the competence and conduct of practicing estate agents are of a standard sufficiently high to ensure the protection of the public. The Board also keeps a list of registered members on its website that is accessible to members of public, In accordance with section 9 of the Estate Agents Act.[35] The Board recently[when?] drafted a proposal with a set of amendments to the Estate Agents Act.[36]
Associations that real estate agents and property developers can join include: Kenya Property Developers Association (KPDA)[37] KPDA was established in Nairobi in 2006 as the representative body of the residential, commercial and industrial property development sector in Kenya. It is an emerging Business Member Organisation which works in proactive partnership with policy-makers, financiers and citizens to ensure that the property development industry grows rapidly but in an organized, efficient, economical and ethical manner. Another Association is the Kenya Professional Realtors Association (KPRA).[38] KPRA is a professional organization that advances Real Estate Professional Services for Real Estate Professionals who buy, sell and manage real estate and related businesses. KPRA Provides a variety of services to its members including professional designation, training certification, education and legislative representation, as well as membership in local and regional businesses affiliated with KPRA.
Professional designations
Building Owners and Managers Association (BOMA International) offers industry-standard designations that certify the training to property managers:[39]
Certificate for Apartment Maintenance Technicians (CAMT)
National Apartment Leasing Professional (NALP)
National Association of Residential Property Managers (NARPM) offers designations to certify ethical and professional standards of conduct for property managers:[40]
Minnesota – Certified Community Association Manager (CCAM)
Minnesota – Certified Residential Manager (CRM)
The Community Associations Institute also has designations in the United States for residential property managers who manage planned communities such as Condominiums, Home Owners Associations and Cooperatives. National designations include:
Association Management Specialist (AMS)
Certified Manager of Community Associations (CMCA)
Large Scale Manager (LSM)
Professional Community Association Manager (PCAM) – Highest designation awarded.
The National Association of Home Builders has a specialized designation for the affordable housing industry through the Low Income Housing Tax Credit (LIHTC) program: • Housing Credit Certified Professional (HCCP)
Property management software continues to grow in popularity and importance. As it decreases in price, smaller companies and amateur property managers can function using some of the same best practices and efficiency as larger companies. Online asset management software (OPMS, or online property management software) has been a significant cause of the price declines. In addition to the core property management software options, a quickly growing number of closely related software products are being introduced to the industry.
A property management system, also known as a PMS, is a comprehensive software application used to cover objectives like coordinating the operational functions of the front office, bookings, communication with guests, planning, reporting, etc. This kind of software is used to run large-scale hotels and vacation properties.
Business models
Percentage of rent
This is the most common model, and is used by property management companies in the residential space that manage multi-home units and single family homes. The property owner in this case signs a property management agreement with the company, giving the latter the right to let it out to new tenants and collect rent. The owners don't usually even know who the tenants are. The property management company usually keeps 10-15% of the rent amount, and shares the rest with the property owner.
Fixed fee
This is the most common revenue model used by companies when monitoring empty homes or empty land sites. The work here involves monitoring the property and ensuring that it is safe and secure, and reporting back to the owner. As there is no income from these properties, a fixed monthly fee is usually charged to the owner.
Guaranteed rent
This model is also used in the residential space, but mostly for small units in high demand locations. Here, the company signs a rental agreement with the owner and pays them a fixed rent. As per the agreement, the company is given the right to sublet the property for a higher rent. The company's income is the difference between the two rents. As is evident, in this case, the company minimizes the rent paid to the owner, which is usually lower than market rates.
Revenue share
This model applies to the service apartment space and other commercial establishments, such as retail or business centers that generate revenue. In this case, the property manager signs an agreement with the property owner, with the right to convert the property into a revenue generating business such as a business center, service apartment, etc. Instead of paying rent to the owner, the management company shares a percentage of revenue.[citation needed] There are also hybrid structures here, where a combination of a fixed rent and a share of revenue is shared with the property owner.[citation needed]
This aims to be a complete list of the articles on real estate.
Renting, also known as hiring or letting, is an agreement where a payment is made for the use of a good, service or property owned by another over a fixed period of time. To maintain such an agreement, a rental agreement is signed to establish the roles and expectations of both the tenant and landlord. There are many different types of leases. The type and terms of a lease are decided by the landlord and agreed upon by the renting tenant.
Real estate agents and real estate brokers are people who represents sellers or buyers of real estate or real property. While a broker may work independently, an agent usually works under a licensed broker to represent clients. Brokers and agents are licensed by the state to negotiate sales agreements and manage the documentation required for closing real estate transactions. Buyers and sellers are generally advised to consult a licensed real estate professional for a written definition of an individual state's laws of agency.
An estate agent is a person or business that arranges the selling, renting, or managing of properties and other buildings. An agent that specialises in renting is often called a letting or management agent. Estate agents are mainly engaged in the marketing of property available for sale, and a solicitor or licensed conveyancer is used to prepare the legal documents. In Scotland, however, many solicitors also act as estate agents, a practice that is rare in England and Wales.
A landlord is the owner of a house, apartment, condominium, land, or real estate which is rented or leased to an individual or business, who is called a tenant. When a juristic person is in this position, the term landlord is used. Other terms include lessor, housing provider, and owner. The term landlady may be used for the female owners. The manager of a pub in the United Kingdom, strictly speaking a licensed victualler, is referred to as the landlord/landlady. In political economy it refers to the owner of natural resources alone from which an economic rent, a form of passive income, is the income received.
A lease is a contractual arrangement calling for the user to pay the owner for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial or business equipment are also leased. Basically a lease agreement is a contract between two parties: the lessor and the lessee. The lessor is the legal owner of the asset, while the lessee obtains the right to use the asset in return for regular rental payments. The lessee also agrees to abide by various conditions regarding their use of the property or equipment. For example, a person leasing a car may agree to the condition that the car will only be used for personal use.
A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee or a tenant has rights of real property by some form of title from a lessor or landlord. Although a tenant does hold rights to real property, a leasehold estate is typically considered personal property.
A property manager or estate manager is a person or firm charged with operating a real estate property for a fee. The property may be individual title owned or owned under the sectional title, share block company owned, and may be registered for residential, commercial office, and retail or industrial use. In 2006, the Bureau of Labor Statistics Office of Occupational Statistics reported that there were 329,000 property managers employed in the United States, with the number expected to grow to by 50,000 by 2016.
A rental agreement is a contract of rental, usually written, between the owner of a property and a renter who desires to have temporary possession of the property; it is distinguished from a lease, which is more typically for a fixed term. As a minimum, the agreement identifies the parties, the property, the term of the rental, and the amount of rent for the term. The owner of the property may be referred to as the lessor and the renter as the lessee.
Rent control in Ontario refers to a system of rent regulation in Ontario, Canada which limits the amount by which the rent paid by tenants for rental accommodation can increase. It applies to any unit that was first occupied for residential purposes before November 15, 2018.
Landlord harassment is the willing creation, by a landlord or their agents, of conditions that are uncomfortable for one or more tenants in order to induce willing abandonment of a rental contract. This is illegal in many jurisdictions, either under general harassment laws or specific protections, as well as under the terms of rental contracts or tenancy agreements.
The Consumer, Trader and Tenancy Tribunal of New South Wales was a tribunal that specialises in resolving consumer disputes in New South Wales, a state of Australia. The tribunal has concurrent jurisdiction in respect of certain consumer claims with the normal civil courts of New South Wales. In other areas of consumer law, it has exclusive jurisdiction. It was created on 25 February 2002 and ceased to function on 31 December 2013, its function assumed by the New South Wales Civil and Administrative Tribunal (NCAT).
Consumer Affairs Victoria (CAV) is a government agency that protects and promotes the interests of consumers and is based in the Australian state of Victoria. It is responsible for reviewing and advising the Victorian Government on consumer legislation and industry codes; advising and educating consumers, tenants, traders and landlords on their rights, responsibilities and changes to the law; registering and licensing businesses and occupations; conciliating disputes between consumers and traders, tenants and landlords; and enforcing and ensuring compliance with consumer laws. It is a business unit of the Department of Justice and Community Safety.
A letting agent is a facilitator through which an agreement is made between a landlord and tenant to rent a residential property. This is commonly used in countries using British English, including countries of the Commonwealth. In the UK, Australia, and New Zealand, the agreement between landlord and tenant is normally formalised by the signing of a tenancy agreement. A letting agency normally charges a commission for their services, usually a percentage of the monthly rent.
The Landlord and Tenant Act 1985 is a UK Act of Parliament on English land law. It sets minimum standards in tenants' rights against their landlords.
The Residential Tenancies Authority (RTA) is the Queensland Government statutory body that administers the Residential Tenancies and Rooming Accommodation Act 2008. The RTA is responsible to the Minister for Housing, Local Government and Planning and Minister for Public Works.
The Ellis Act is a 1985 California state law that allows landlords to evict residential tenants to "go out of the rental business" in spite of desires by local governments to compel them to continue providing rental housing.
The history of rent control in England and Wales is a part of English land law concerning the development of rent regulation in England and Wales. Controlling the prices that landlords could make their tenants pay formed the main element of rent regulation, and was in place from 1915 until its abolition by the Housing Act 1988.
Rent regulation is a system of laws for the rental market of dwellings, with controversial effects on affordability of housing and tenancies. Generally, a system of rent regulation involves:
The Costa–Hawkins Rental Housing Act ("Costa–Hawkins") is a California state law, enacted in 1995, which places limits on municipal rent control ordinances. Costa–Hawkins preempts the field in two major ways. First, it prohibits cities from establishing rent control over certain kinds of residential units, e.g., single-family dwellings and condominiums, and newly constructed apartment units; these are deemed exempt. Second, it prohibits "vacancy control", also called "strict" rent control. The legislation was sponsored by Democratic Senator Jim Costa and Republican Assemblymember Phil Hawkins.
↑ A "property management company" is defined as "a business entity (whether a company, partnership or sole proprietorship) that carries on the business of providing property management services" under section 2 of the Property Management Services Ordinance
↑ A "property management practitioner" is defined as "an individual who assumes a managerial or supervisory role in a property management company in relation to property management services provided by the company" under section 2 of the Property Management Services Ordinance
↑ Chasse, Terrance (2014-12-31). "New York State Property Management Law". NYCPP. all New York property management companies must posses[sic] a real estate broker's license. This license is required for such activities as renting to list, negotiating the rental of a property, collecting rent and placing tenants on behalf of a landlord client. There are very limited exemptions to this requirement.
↑ "CP-27". colorado.gov. Archived from the original on 2 January 2015. Retrieved 2 January 2015. Pursuant to C.R.S. §12-61-101(2)(a)&(b), the leasing and subsequent management of real estate for a fee or compensation, is included among the activities for which a license is required.
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