Does a Close Relative Need a Property Manager's License?

Robert S. Griswold | Steven R. Kellman | Ted Smith
14-April-2002 Sunday

This column on issues confronting renters and landlords is written by Counselor of Real Estate and Certified Property Manager Robert Griswold, host of Real Estate Today! with Robert Griswold (9 a.m. Saturdays on AM1130 - KSDO radio, or on the Internet at www.retodayradio.com), and by attorneys Steven R. Kellman, director of the Tenants' Legal Center, and Ted Smith, principal in a law firm representing landlords.

QUESTION: My parents own a lot in Los Angeles with two single- family homes on it, both rented. Because my parents recently moved into their retirement home 75 miles away, they asked me to manage the property for them (i.e. collect rent, schedule repairs, etc.).

However, one of the tenants is refusing to deal with me, saying that I do not have the necessary licensing to be a manager. Do I really need to obtain a real estate/property manager's license to assist my parents? I receive no pay.

ANSWER: Smith: California's real estate licensing law extends to property management activities. These include negotiating leases and collecting rents. There are certain requirements and some people are excluded. The state will probably look at the relationship between the parties and whether a fee or other consideration is given.

Rental owners and operators may run their own rental properties without being licensed. An on-site resident apartment manager is not required to be licensed.

In this case, I see you managing the property with your parents as an owner/operator. You are not receiving a fee and you are a member of their immediate family. Based on these facts, you make a good case for falling outside the scope and jurisdiction of the licensing requirements mandated by the California Department of Real Estate.

Griswold: While I agree with Smith's analysis in this particular situation, there are limitations on the interpretation of the familial relationship or even the issue of no compensation. For example, you would be considered an immediate family member here but if you are asked by your cousin to manage their rental property you have probably crossed the line and would need a license.

Also, just because you are not getting paid directly for the limited property management duties you are currently performing does not mean that your services are entirely gratuitous. For example, a real estate license may be required if you were managing the property until the current leases expired and then you would sell the property and receive a commission.

I would strongly suggest that you consider taking real estate and property management courses that would give you more knowledge in the field as well as preparing you to qualify as a real estate salesperson or broker. You may find that you enjoy managing real estate and would like to pursue other property management opportunities.

A rug's life

Can a landlord/agency deduct money from my security deposit when I move out for carpet cleaning/repair even though they plan to replace the carpet with new carpet before the next tenant moves in?

Smith: As the landlord's attorney, I believe it is reasonable for your owner to deduct a carpet cleaning charge against your security deposit even though the landlord plans to replace the carpet when you vacate. California's security deposit law states that you remain responsible for reasonable cleaning to the rental. If carpet replacement is the only viable option then the landlord should be entitled to that entire cost.

I advise my clients to prorate the carpet expenses by comparing the customary life given to rental property carpet against the tenant's length of stay. Even so, if your landlord can prove that you caused most of the carpet damage while you were living there, then you will be responsible for the entire replacement cost.

Days of our strife

I am on a month-to-month rental agreement at a rental house near the beach. I've just received a 30-day notice to vacate in the middle of the month. The legal notice states I must be out by the 20th of next month and there is no reason stated.

My concern is that the 20th is not the most convenient time for me to move as I prefer the 10th of next month. If I go ahead and leave early do I have to pay for the balance of the 10 days until their notice to vacate expires? Can't I just pay for the days that I am actually there?

Griswold: You can not unilaterally move out before the 30 days and just prorate the rent without the mutual agreement of the landlord. Thus, you should immediately contact the landlord to reach an agreement and then be sure to record the details in writing. Otherwise, if you were to just leave and attempt to only pay partial rent, the landlord would be within rights to deduct the balance of 10 days from your security deposit or seek the funds in small claims court. If you cannot reach the landlord on the phone to discuss the matter, I suggest that you send the landlord a written request indicating that you will be glad to leave but that you need to be out on the 10th and are willing to pay through the 10th only.

IF YOU'RE A TENANT OR LANDLORD, the authors stand ready to answer your questions in this column, although letters cannot be answered individually. Write them at: Rental Roundtable, Homes Section, San Diego Union-Tribune, P.O. Box 120191, San Diego, CA, 92112-0191. Or you may e-mail them at rgriswold.sdut@retodayradio.com

Copyright Union-Tribune Publishing Co.

Back to 2002 Rental Roundtable Index

Robert Griswold and the Real Estate Today! radio show strongly support the intent and the letter of all federal and state fair housing laws. As a reminder to all owners and managers of real estate, note that all real estate advertised is subject to the Federal Fair Housing Act, which makes it illegal to advertise "any preference, limitation, discrimination because of race, color, national origin or ancestry, religion, sex, physical disability, or familial status, or intention to make any such preference, limitation or discrimination." Additional state and/or local fair housing laws may also apply. Be sure to inform all persons that all dwellings offered or advertised are on an equal opportunity basis.

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Revised and Updated - Wednesday, April 26, 2006

Robert S. Griswold, CRE, CPM, CCIM, PCAM, GRI, ARM
Griswold Corporate Center
Griswold Real Estate Management, Inc.
5703 Oberlin Drive, Suite 300
San Diego, CA 92121-1743
Phone: (858) 597-6100
Fax: (858) 597-6161
Email: rgriswold.ret@retodayradio.com