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Okay so I have a condo property in MD and I was curious about something. I have heard that a Property Manager is supposed to have a real estate license but I was wondering in the case where the Condo Association obtains property through foreclosures, is it ethical for the property manager to serve as a selling agent for that property? And if they do, is it ethical for them to collect commission off of the sell or is that considered a general function of a property manager?
Depends on where your state designations. Out here a property manager has a different real estate license and can't sell homes. You can be a real estate broker and act as a property manager as that is a "higher" level of license. So out here the answer would be maybe.
As mentioned, a lot will depend on state law. An agent is generally someone who sells property for others, so if the "manager" is an employee of the owner they may be able to sell the property without a license of any kind. The operative word is "may".
I can't tell if there are any facts to your question--it sounds all hypothetical.
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In Florida, a Realtor and a Property Manager can be the same thing. A Realtor requires state licensing to sell property.
Not to confuse things too much, there is another designation called a CAM (Community Affairs Manager) who manages an entire HOA/condo/co-op community that requires a different license.
As others have stated, it depends on which state you live in.
As mentioned, a lot will depend on state law. An agent is generally someone who sells property for others, so if the "manager" is an employee of the owner they may be able to sell the property without a license of any kind. The operative word is "may".
I can't tell if there are any facts to your question--it sounds all hypothetical.
It's not hypothetical. It really is a realtor who is a property manager, but he's acting as a realtor on behalf of the association that he is employed by. That is why I was curious if it was ethical. I mean it seems like he would be paying himself to do transaction, and that seems very questionable in my opinion, but I can see that it will vary from state to state.
I think you might be confusing what "property management" is vs. what a real estate agent does. I don't really see where it's unethical for someone who is paid to manage a property (i.e., oversee repairs, collect rents, find tenants, etc.) to also get paid for selling a home, which is a completely different skill set. It's like saying you would pay someone to clean your house, but if they turned around and sold your house, it would be unethical. That logic doesn't track . . .
As long as the association/owner is clear on what they are paying for (i.e., property managemnt vs. real estate commission), what's the ethical shortcoming?
It's not hypothetical. It really is a realtor who is a property manager, but he's acting as a realtor on behalf of the association that he is employed by. That is why I was curious if it was ethical. I mean it seems like he would be paying himself to do transaction, and that seems very questionable in my opinion, but I can see that it will vary from state to state.
If the Condo Association agrees to pay him a commission, I don't see how that might be unethical in any way. They're the ones controlling what is done.
I think you might be confusing what "property management" is vs. what a real estate agent does. I don't really see where it's unethical for someone who is paid to manage a property (i.e., oversee repairs, collect rents, find tenants, etc.) to also get paid for selling a home, which is a completely different skill set. It's like saying you would pay someone to clean your house, but if they turned around and sold your house, it would be unethical. That logic doesn't track . . .
As long as the association/owner is clear on what they are paying for (i.e., property managemnt vs. real estate commission), what's the ethical shortcoming?
I am very aware of the difference. The problem is after rreviewing his contract there is nothing in his property management contract that indicates that he should function as a Realtor too.
Why is this an issue you ask? The contract is written as such so that he has control of the money. The only thing he needs is someone to sign the checks. In addition to that though, in reviewing our yearly budget there is nothing indicating that he is being paid as a Realtor.
That means one or two things to me, either he is being paid as a realtor without it being documented or he is basically functioning as a Realtor for free. To me if the former is true, the conflict that I see is who determines how much he is paid and who is responsible for documenting the pay. He is essentially hiring himself to work.
From another perspective, it might be advantageous for a property owner to have a Property Manager (Condo, for example) who was also licensed to sell properties. He would have a built-in audience that was interested in renting/leasing condos ... who might optionally be interested in purchasing a condo. (Two entirely separate functions and services).
I am very aware of the difference. The problem is after rreviewing his contract there is nothing in his property management contract that indicates that he should function as a Realtor too.
Why is this an issue you ask? The contract is written as such so that he has control of the money. The only thing he needs is someone to sign the checks. In addition to that though, in reviewing our yearly budget there is nothing indicating that he is being paid as a Realtor.
That means one or two things to me, either he is being paid as a realtor without it being documented or he is basically functioning as a Realtor for free. To me if the former is true, the conflict that I see is who determines how much he is paid and who is responsible for documenting the pay. He is essentially hiring himself to work.
Generally, in order for a real estate agent to receive a commission there needs to be a contract in writing (at least for it to be enforceable--and I'm quite sure that some states require a written contract period.) But, if he's an employee he is not necessarily acting as an agent (i.e. selling property for others).
The Condo Association should have some form of oversight. Are the financial books audited or subject to some type of review? Have sales of foreclosed condos taken place already? What types of documentation are available for review? Closing statements should indicate whether commissions have been paid.
I can fully understand expenses associated with a real estate closing not being budgeted. Closing costs would normally just offset the dollar amount received from a sale--so only the net amount may be shown (if at all if the sale wasn't anticipated, because you can't budget what you don't anticipate.)
Maybe you should ask your questions to someone on the Condo Association board.
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