Property Managers Must Have Active California Real Estate License

ROBERT GRISWOLD | STEVEN R. KELLMAN | TED SMITH
19-Apr-1998 Sunday

This column on issues confronting renters and landlords is written by Certified Property Manager Robert Griswold (host of "Real Estate Today!" on KOGO Radio, AM 600, Saturdays, 1 p.m.) and by attorneys Steven R. Kellman, director of the Tenants' Legal Center, and Ted Smith, principal in a law firm representing landlords.

Q: I am working in another state for a government agency as a housing management assistant and am planning to move to California soon. Do I need to have a California real estate license to be considered for a job as a property manager? Are there any exceptions?

A: Griswold: Yes, in virtually all instances you must have a California real estate license to be a property manager in the state.

The California Department of Real Estate (DRE) requires that all property managers have an active real estate salesperson's or broker's license unless you qualify for the limited exemption allowed for a resident manager or rental hostess.

In certain circumstances, an unlicensed person employed by and under the direct supervision of a licensed real estate broker may perform limited management or leasing functions for residential apartments.

Under the California Business and Professions Code, these activities are limited to:

1. Showing rental units and common areas to prospective tenants.

2. Providing or accepting preprinted rental applications or responding to inquiries from a prospective tenant concerning the completion of the application.

3. Accepting deposits or fees for credit checks or administrative costs and accepting security deposits and rents.

4. Providing information about rental rates and other terms and provisions of a lease or rental agreement, as set out in a schedule provided by the employing broker.

5. Accepting signed leases and rental agreements from prospective tenants.

The DRE considers property management to be a licensed activity and there are serious implications for the individual and the firm or owner that fails to comply exactly with the requirements.

Also, the exemption for a leasing agent has been interpreted by the DRE to only cover leasing agents employed at a single location.

It is well established by the DRE that a property manager who lives off-site (even if he or she has the title "resident manager") must hold a California real estate license.

Q:My wife and I have lived in a one-bedroom apartment for eight years at a 320-unit community with 20 buildings.

Until now, we have paid our own separately metered gas and electric bill, while the water and sewer charges had been included in our rent.

We have been notified that, when our lease expires, we will be charged a flat monthly fee added to our rent to cover the water and sewer.

The units are not individually metered and are both one- and two-bedrooms. The same amount will be charged to all tenants even though the units are different in size and some people have families.

In the absence of individual water meters, are these charges legal?

A: Griswold: Yes, as long as the landlord gives you proper notice and makes the change effective upon expiration of your current lease.

An entirely separate issue is whether the charges are equitable as proposed. Since the majority of multifamily apartment communities are master-metered for water, the residents have no incentive or accountability to conserve water, while owners throughout Southern California are facing significant increases in their water and sewer charges.

For many years, the only way owners could recover increasing costs such as water was through rent increases. However, many tenants object to general rent increases and would welcome the ability to keep their rent from increasing if they help the owner control costs.

Fortunately, there are many new systems that are available for rental housing that will allow owners to retrofit each unit with a water meter that can record water use.

Frequently, the owners contract with independent firms to bill the individual tenants for their water use, just like the electric and natural gas utilities. Many tenants may be too young to remember that until the 1970s most multifamily buildings were master-metered for electricity.

I firmly believe that separate metering for water will be the norm within 10 years. In the meantime, for owners who want to encourage water conservation and/or pass along the increased charges, there are a variety of methods commonly referred to as RUBS, or residential utility billing systems.

RUBS can be any form of allocating some or all of the water charges back to the tenant. One method is to either install a separate common area water meter or deduct a certain portion for the common area and landscaping uses at the property and then spread the balance between the residents.

There are no official guidelines or regulations regarding the proper allocation formula, thus the potential for disagreement.

Obviously, you feel that you will be charged more than your fair share as you are in a smaller unit with only two occupants. While there is no perfect system since some people are water misers and some can be water hogs, I agree that the landlord could come up with a more equitable system, possibly based upon unit size.

Q: I rented an apartment through a rental locator service and moved into an upstairs unit right above the owner.

I am a light smoker. Recently, I notified the owner of a maintenance problem, and when she came to fix it, she noticed a cigarette butt in the ashtray and was very upset.

She said that she had a strict no-smoking policy and if I didn't comply, I would have to move. Neither the rental agent nor the owner, who had first shown me the unit, ever told me about the no-smoking policy, and there is no reference to smoking whatsoever in the lease.

While I have been considerate and voluntarily restrict my cigarettes to two per day next to an open window, I am concerned that I may be evicted. Can she evict me or must she wait until my 12-month lease expires?

A: Griswold: The owner cannot evict you during the 12-month lease unless the no-smoking policy is a term of the lease. Since the lease does not contain such a clause, the landlord must wait until the lease expires.

Since it is unlikely that you will be able to stay in the long run unless you quit smoking, you may be able to get your landlord to return your full deposit and even provide funds to cover some of the costs of your move.

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 191, San Diego, CA, 92112. Or you may e-mail them at rgriswold@retodayradio.com

Back to 1998 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.

FHEO Logo

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