Posted by SaveHomeFromForeclosure on November 17, 2006 at 21:20:17:
I don’t know if this would work. Being that it is your brother it might be ok.
What if he gives you a limited power of attorney to deal with the property?
Inquiring legal minds want to know!
License to Manage Other Owner’s Property? - Posted by Greg
Posted by Greg on November 14, 2006 at 17:23:01:
My brother in law is purchasing a property here in New Mexico. Since I manage my own investment property here, I am going to manage his. I’ve drawn up a contract, but he says he read somewhere I have to be licensed. Is this true? I’ve never heard of that, but suppose it could be local code where he’s from in CA. Is there such licensing? And is it required in my situation?
Agent license or option - Posted by John Merchant
Posted by John Merchant on November 20, 2006 at 12:44:01:
In many states one has to be a lic. REA or broker to manage rentals, collect rent, etc.
Call the NM RE Commission or agency and they can tell you in a minute if a RE lic. is required in NM.
Another possible option for you both is for your BIL to convey you a small interest in the RE in return for your management of it, then you could manage it for your ownership entity.
Re: License to Manage Other Owner’s Property? - Posted by Frank Chin
Posted by Frank Chin on November 16, 2006 at 07:41:05:
Greg:
This issue could be quite technical, and hinges on technicalities of state RE law.
While it is true that generally you CANNOT collect a fee to manage propertities for others, you can get around it here in NY (not a lawyer and not tested) as I have read the RE law for my licensing exam.
As long the PM does not “collect the rent”. The intent and thrust of licensing is someone unsavory can collect the rent and skip town. The law states somone not licensed cannot collect the rent. Having the tenant mail the check to you directly can solve this, or open an account locally, and have the tenant walk to the bank and deposit it.
You can be an employee, which involves paperwork with workman’s comp, FICA etc. An employee can do whatever is legal for the employer. The downside is it might not be worth the hassle.
Call you a “handyman” with a monthly contract for routine maintenance, or a monthly inspection fee, or a monthly landscaping fee. You get the idea. It is not illegal to pay someone out of state a fixed fee for these things, and if you do your relative a favor picking up a check once a month, who’s going to split hairs??
Probably simpler this way than sham leasing arrangements, or be on the deed.
Frank Chin
Re: License to Manage Other Owner’s Property? - Posted by BTI
Posted by BTI on November 15, 2006 at 24:03:32:
Greg
Don’t know the law in New Mexico, but a quick check with the Dept. of Real Estate can give you an answer.
If a license is required there are generally two ways to overcome this. One your brother in law signs a master lease with you and the tenants sublease from you.
Second, have your brother in law give you a small interest in the property, eg 1% and you give him a very long option to buy back your interest, an owner doesn’t need a license.
BTI
Re: License to Manage Other Owner’s Property? - Posted by Max-Va
Posted by Max-Va on November 14, 2006 at 21:29:15:
In Virginia You have to hold a real estate license to manage a property you do not own, for a fee.
Re: Agent license or option - Posted by Frank Chin
Posted by Frank Chin on November 21, 2006 at 17:59:28:
John:
I often wondered where the line is drawn on “property management”.
I started off having a retired gentlemen next store to a rental sweep the sidewalk, and pull the garbage pails in following garbage collection. I don’t think that constitutes property management.
Later on, he took charge of checking burnt out bulbs in the hallways, and replacing them, and I don’t think that constitutes property management either.
Later still, I gave him the number for my plumber so he can call if my tenants have a complaint. I still don’t think that constitutes property management.
The city issues citations for dirty sidewalks, and he would mail it to me. Property management??
And when contractors come to do work, he keeps an eye on them, and keeps me informed. I had a new sidewalk put in, and he watched the whole time.
As to rents, I got a rent box where the tenants leave me the rent, and the wife goes to pick it up. But I don’t think if I ask this gentlemen to put it in an envelope, and mail it to me, it’s property management.
Why did I use him??
He’s retired with a heart condition, and sits in a chair in front of his house right next to mine. In the winter, he sits by the window, and sees everything going on at my rental. And he only wanted $50.00/month plus the use of my driveway.
As to licensed property managers, they want 10% of the rent roll, over $300.00/month, and they have to charge extra for keeping the sidewalks clean, bulbs replaced. BUT they can legally have the tenants pay THEM, take out the 10%, and mail me the rest. But they can’t watch the place 24/7.
And give someone an interest in my property to sweep the sidewalks?? If I tell any of my relatives this, they either say “I lost my marbles”, or “can’t you go and sweep the place”??
I think if I keep the duties BELOW that which constitutes property management, I’m on safe ground.
Another thought. This gentlemen passed away a few years back, and his widow took over. Wouldn’t there be some complication getting him off my deed??
Around here, they called guys like this the “super”, and it’s less formal and complicated. And to be real technical, maybe just 1099 the guy as a contractor.
Someone below ask about “power of attorney”. It seems I don’t have to provide one to someone to sweep the sidewalks, change bulbs etc. He’s not making any decisions on my behalf.
Frank Chin
Re: License to Manage Other Owner’s Property? - Posted by Greg
Posted by Greg on November 17, 2006 at 08:54:43:
Thanks. I’ve gotten several good ideas from your replies. It’s funny that this particular subject was never mentioned in all the “landlord” books I’ve been reading. I suppose most are either managing their own or having a company do it.