Property management is the operation, control of (usually on behalf of an owner), and oversight of commercial, industrial or residential real estate as used in its most broad terms. Management indicates a need to be cared for, monitored and accountability given for its usable life and condition. This is much akin to the role of management in any business.
Property management is also the management of personal property, equipment, tooling and physical capital assets that are acquired and used to build, repair and maintain end item deliverables. Property management involves the processes, systems and manpower required to manage the life cycle of all acquired property as defined above including acquisition, control, accountability, responsibility, maintenance, utilization, and disposition.
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One important role of a "Property Management" is that of liaison between the Owner of record and the actual tenant/leasee tenant. Providing a buffer for those owners who are desiring to distance themselves from their tenant constituency. Duties of property management generally will include a minimum of these basic primary tasks;
A. The full and proper screening or testing of an applicant's credit, criminal history, rental history and ability to pay.
B. Lease contracting or accepting rent using legal documents approved for the area in which the property is located.
C. Mitigation and remediation regarding any maintenance issues, generally within a budget, with prior or conveyed consent via a Limited Power of Attorney legally agreed to by the property owner.
There are many facets to this profession, including managing the accounts and finances of the real estate properties, and participating in or initiating litigation with tenants, contractors and insurance agencies. Litigation is at times considered a separate function, set aside for trained attorneys. Although a person will be responsible for this in his/her job description, there may be an attorney working under a property manager. Special attention is given to landlord/tenant law and most commonly evictions, non-payment, harassment, reduction of pre-arranged services, and public nuisance are legal subjects that gain the most amount of attention from property managers. Therefore, it is a necessity that a property manager be current with applicable municipal, county, state and Federal Fair Housing laws and practices.
Property management, like facility management, is increasingly facilitated by computer aided facility management (CAFM).
Most states require property management companies to be licensed real estate brokers if they are collecting rent, listing properties for rent or helping negotiate leases. 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 on-line for anyone holding a real estate salesperson or real estate broker's license. A few states, such as Idaho and Maine, do not require property managers to have real estate licenses. Washington State requires Property Managers to have a State Real Estate License if they do not own the property. Owners who manage their own property are not required to have a real estate license, See the State Laws [1] however they must at least have a business license to even 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.
Generally, property managers who engage in only association management need not be licensed real estate brokers. In Connecticut, however, a broker's license is required. Some states, while not requiring a real estate license, do require association managers to register with the state.
Every state of Australia has different licensing requirements. To be able to trade as a property management company, the company has to be licensed with a principal or licensee in charge. Each staff member of the company has to have a certificate of registration. (Agents Act 2003, Part 4, Section 45) http://www.austlii.edu.au/au/legis/act/consol_act/aa200381/
Victorian Property Management includes new legislative requirements under the Owners Corporation Act 2006 (commenced 2008 and replaces the old Body Corporate provisions under the Real Estate Act). Owners Corporation Managers are required to be Registered with Consumer Affairs Victoria and hold insurance. Real Estate Agents are required to be licensed. Melbourne has seen significant growth in large multi unit apartment developments and Owners Corporation Management is evolving as a result. Owners Corporations can be residential, commercial or a mix.
Residential Property Managers in New Zealand currently come in two types. Those that are licensed and those that are unlicensed. The New Zealand Government is reviewing whether all forms of property management need any legislation. New Zealand licensed property managers offer a full and complete service with qualified professionals who collect rent through an audited trust account to protect both investment property owners and tenants. Also licensed property managers adhere to the Real Estate Institute of New Zealand property management code of practice which outlines industry best practices for dealing with the public. Unlicensed property managers do not require any registration, minimum knowledge or skill, or adhere to any code of practice to offer a property management service.
Consequently, the services offered in New Zealand are varied where both licensed and unlicensed property managers have a mixed track record in delivery services to this industry.
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.
No specific qualifications or licences are required to operate as a managing agent in Ireland. This is likely to change once the National Property Services Regulatory Authority is established on a statutory basis.
A Bill providing for the statutory establishment of this body is expected to be published by the Irish Government in 2008. The new authority will license and regulate managing agent services, but is not expected to have legislative power to investigate individual complaints against managing agents.
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.
Building Owners and Managers Association (BOMA International) offers industry-standard designations that certify the training to Property Managers:
Institute of Real Estate Management (IREM)
Manufactured Housing Institute (MHI)
National Apartment Association (NAA) has the following designations:
National Association of Residential Property Managers offers designations to certify ethical and professional standards of conduct for property managers:
State-specific designations include the following:
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:
Property Management Software (for partial list see List of property management software) continues to grow in popularity and importance. As it decreases in price, smaller companies and amateur property managers are able to function using some of the same best practices and efficiency as larger companies. Online Asset Management Software (OPMS aka Online Property Management Software) is a major cause of the crash in the price. In addition to the core Property Management Software options, there is a quickly growing number of closely related software products being introduced to the industry.
Like the Online Property Management Software, most of these products are also Online Software, also known as Software as a Service (SaaS). This approach to software typically makes the barriers to entry far lower than the traditional box software alternatives. Many of these options are available for a demo period at no cost. While there is often a set up or licensing fee required at the time of implementation, the product cost is paid as a monthly fee and service contract often offer flexible terms. Like other non-product oriented services, the SaaS product will have a non-performance clause allowing the customer to discontinue service if the terms of the contract are not met by the provider.
Another benefit to these types of products/services is that upgrades are performed on the server-side by the software vendor and therefore require far less, or even no change management at all. While the software seller may choose to increase monthly costs at the renewal stage of the contract, there is no direct Upgrade cost as found in box software products. Many software services will also perform intermediate releases that have no noticeable change in product features, but they may repair many bugs and have iterative augmentations that have a positive effect for the user without having to install patches on their PC.
The term property management is used to describe the practice of managing capitalized assets and personal property that are not real estate in nature, such as equipment, tooling and consumables. This is particularly the case in some post-secondary institutions, hospitals, manufacturing industry, federal agencies and organizations that must manage government-furnished property, such as government contractors.
See the National Association of Residential Property Managers website [1] for a more complete review of residential property management requirements in the USA.