In: new york state property management
Property management, particularly in the New York City metro area, is a highly specialized field that handles tremendous, valuable assets. The barrier to entry into our field is pretty low, with a number of fly-by-night companies and inexperienced managers / companies in the field. They’re able to take on clients due to their cheaper pricing, which in many cases is the sole litmus test used by property owners and boards for their management hires. This begs to raise the question; should property managers and management companies be licensed in the State of New York or should it stay as it is; with no major restrictions or hurdles to jump over?
If you look to the state of Florida, real estate management companies are required to be Licensed Community Association Management firms and individual managers are required to possess the Community Association Manager license as well. Both of these licenses are obtained by passing background checks with the Federal Government, taking specialized courses, passing course tests, passing state level tests and then attending continuing education every two years. Once these tests are passed a license is issued through the Florida Department of Business and Professional Regulation and then the licensees and the firms are held accountable for their actions and also held liable for any violations of the state-level regulations. Rules are changing constantly and it is up to the licensee to ensure that they are following the law as it is written. No such laws or oversight exist in New York State.
In New York State, and a reason why so many real estate brokers turn to management in a downturn, a property management firm must be a Licensed Real Estate broker in order to collect rent (or maintenance / common charges) on behalf of the owner. Many companies do not know this law as it is not widely known and as a result do not maintain an active broker’s license for the firm. Other than that provision, there is no obligation by the management company to follow any statutes of law that relate specifically to the management of properties and the fiduciary responsibilities of a managing agent to the owner of the property. Of course all laws have to be followed with regards to the maintenance of a property and each property should be run efficiently in a law-abiding way, but there is no oversight at this time from the state to make sure that those who are running these properties themselves are both with a clean record and properly trained for the position.
Could the various buildings owners and boards in the area benefit from a systematic overhaul of the current system that would ensure that all of the employees managing their accounts be licensed and up-to-date with all current regulations and responsibilities? I think so. It would take a lot of work on both the state end and also with each individual property management company, but in the end it could benefit those who need it the most; the property owners who rely on us, as professionals, to maintain and properly manage their valuable assets.
– Mark Levine, RAM, CAM