When it comes to running a property in the form of a landlord or property manager there are many aspects of the business where it pays to be educated; not the least of which is legal aspects of the job. Being a property manager means that you must learn and adhere to any laws that govern such activity in order to ensure you do not leave yourself vulnerable to a potential lawsuit should something go awry. However, it also pays to be aware of any legal protections that the law may afford you, in order to keep both you and your investment safe.
Property management laws, which vary from state to state, regulate real estate professionals responsible for managing rental properties such as apartments, homeowners associations, condominiums, office buildings, cooperatives, and so on.
First, there are numerous professional obligations that go along with being a property manager. Most states require property managers to be licensed after having earned a degree or passing a written examination only after taking a specific course on property management. Often an extensive background check is also needed; any serious criminal convictions could disqualify an applicant. But once a license is obtained, that is not the end of it oversight; in order to maintain a license in good standing, many municipalities require continuing education and payment of annual fees.
Property managers are also required, at all times, to act in the best interests of their clients, tenants, and the buildings that they represent; this, legally, is known as a fiduciary duty. To that end, a property manager must avoid performing actions – such as taking on a conflict of interest or an opportunity for self-gain – that would result in harm or damage to their clients. However, a fiduciary duty is a duty owed to the community as a whole, as opposed to a duty owed to each individual member of the community.
Obligations brought on by Homeowners Association and Condominium laws also figure into the routine of a property manager, and they will have to learn to successfully navigate and incorporate those laws into their own individual mandates in order to successfully and legally run properties they are responsible for. For example, a property manager may have to assist Homeowners Associations to collect assessments, make reports to various governmental agencies, ensure residents are complying with association rules, handling various association-related financial issues, and so on.
A property manager will also have to deal with numerous professional organizations that relate to various aspects of their management duties. They run the gamut from groups that lobby for laws that cover property managers and the properties that they represent, as well as purveyors of information regarding news and developments in the property management industry and the legal field.
In recent years, a newer aspect of the role that property managers play has come under increased scrutiny from state governmental officials; the belief that certain and specific aspects of the duties of a property manager, may constitute the unauthorized practice of law. Therefore, it’s vitally important for a property manager to have access to work closely with a qualified and experienced attorney to ensure they are not inadvertently violating the law. Examples of these scrutinized activities include recording claims of lien, sending demand letters, and so on.
Utilizing the skills of a legal counsel in these matters to ensure compliance with the law is very important. For more information on the numerous and sundry aspects of the law and how it relates to property management, be sure to contact a licensed attorney in your area that specializes in community association or property management law.