Legal Responsibilities for California Property Managers

Property management involves many responsibilities that interact with the law. These responsibilities can include management of accounts and finances of the real estate properties being managed and handling disputes with tenants, contractors, insurance agencies, or other parties who have an interest in or obligation to the properties. If litigation becomes necessary, a knowledgeable property manager is a great asset for both owners and residents.

Fiduciary Duty

Under the law, property managers owe what is known as a “fiduciary duty” to the communities or buildings they manage. This means that the property manager must always act in the best interest of the client and must avoid any conflicts of interest that could harm the client, even if it means losing out on an opportunity.

Because property managers have an important role in making sure the communities they manage are in compliance with all legal obligations, property managers must be familiar with many areas of law, including those governing landlord/tenant relationships, evictions, non-payment issues, and public nuisances. Property managers may have to deal with several layers of applicable laws from the municipal or county level all the way up to federal requirements.

Federal Law and Property Management

Applicable federal laws may have to do with lending practices, fair housing, health and safety, or property rights. Examples include the Equal Credit Opportunity Act, the Lead-Based Paint Hazard Reduction Act, and the Uniform Residential Landlord and Tenant Act.

State and Local Law and Property Management

State law also provides important legal responsibilities for property managers. A property manager must ensure that every residential rental unit meets a minimum standard of habitability, consistent with health, safety and building codes, which may be promulgated on a state, county, or municipal basis. In most states, property managers must be licensed. In California, for example, an apartment property manager must be licensed with the California Bureau of Real Estate as a Real Esate Broker. The state Department of Real Estate (DRE) requires broker-applicants to document experience and/or educational training in the field and to pass a state licensing exam. California takes this requirement very seriously; property managers, like other brokers, are subject to license suspension or revocation for failing to uphold laws relating to the management of property. California property managers also need to be familiar with legal requirements having to do with marketing, credit lending, accounting, advertising, insurance, repairs, maintenance, and taxes. In Anaheim, property managers will also need to be familiar with Orange County rules and regulations as well as the City of Anaheim’s Nuisance Ordinance and Zoning Codes. Many property owners will not be aware of all of these legal requirements and will rely on the property manager for guidance.

Finally, property managers are expected to know and understand the rules of their own communities. Property managers will frequently need to help owners and residents understand their obligations under the governing documents of the applicable homeowner’s association or renter’s association. These documents may contain covenants, exclusions, reporting requirements, financial obligations, or collection procedures. Knowing the laws which touch on each of these issues makes the property manager a key individual for the smooth and efficient governance of a successful community.