What Is Property Management? That Depends!

They may also be managed by a resident manager, someone who resides in the building who also is not required to have a real estate license, but may manage only that building.

In either case, whether managed by an unlicensed owner or resident manager, there are laws that must be complied with, and ignorance of the law is never a defense.

If the owner hires someone other than a resident manager to manage the building, that person must hold a New York State Real Estate Broker’s License or is exempt from the license requirement, such as a New York State Licensed Attorney, if the broker responsibilities include, for example, the collection of rents and the signing of leases,

The real estate broker may employ non-licensed individuals to assist the broker in the management of the properties.

The real estate broker’s license that is required is the same one required to sell single-family homes or act as a real estate broker in the commercial real estate market. The License Law of the State of New York makes no distinction.

This is not to say that the management of multi-family housing does not require special skills. The Institute of Real Estate Management offers a nationally recognized certification known as Certified Property Manager, which is awarded based on the completion of property management courses and experience in the field of property management. New York University also offers a Certificate in Property Management.

The role that the property manager may play, and by that I mean a property management company, is varied and valuable.

Architects design buildings to conform to zoning, code, determine the materials to be used, etc. A property manager can offer practical suggestions based upon experience in managing buildings.

Accountants prepare budgets, but a property manager’s input based upon cost effective considerations may be invaluable to the financial success of the property.

The best way for the property manager to learn about the mechanical systems and other construction related issues is if the property manager is on-site during the period of construction.

A property manager who is involved in the rent-up or selling process will have a positive effect on tenant selection.

The ultimate success of the property starts well before the property manager begins to deliver the services of day-to-day maintenance and upkeep.

In the Hamptons, there are property managers who perform these kinds of services for owners of residential properties, but their role should not be confused with those who are hired, for instance, during periods of absence by the landlord to see that the home is cared for – the lawn mowed, the snow removed, the plumber and electrician called to perform services for the tenants or protect the property from damage. This type of management, though vital, is more custodial in nature, and doesn’t require a real estate license.

It is not uncommon for real estate agents on the East End of Long Island, given its second home character, to provide services to landlords they represent in finding a tenant for a property, beyond those normally associated with those of a broker.

This is usually motivated by a desire to cultivate “goodwill” with their clients. Still others avoid this practice to avoid problematic situations that could develop as a result.

I think that for those who do, prudence should dictate that they consult legal counsel as well as their insurance carrier.