Regulation of Property Management Companies

Property management companies are responsible for the maintenance, leasing and renting of real estate owned by someone else, in exchange for an agreed upon compensation. Property management is regulated by several federal statutes.

Federal Regulations

The Federal Management Regulation 2010, is the updated federal guideline for managing federal properties. Real property is covered under Subchapter C and includes regulations on preserving historic properties, acquiring and disposing of real estate and responsibilities for providing security for properties.

Licensing

Most states require property managers obtain a real estate broker's license. However, in some states such as California, a licensed company may employ sales persons to engage in property management activities. States particularly disagree on whether community association managers must obtain a broker's license.

Banks

Following the 2009 Omnibus Appropriations Bill, banks are expressly forbidden from performing property management functions for properties not directly owned by the bank. Although banks may continued to manage foreclosed properties, they may not engage in real estate activities.

References

• gsa.gov: Federal Management Regulations Subchapter C
• IREM.org: Banking Conglomerates Permanently Barred from Real Estate Activities