“At this time, anybody can say, ‘I am a property manager,’ and go into business,” says Alvin Wasserman, director of asset management at Fairfield Properties. “There are no requirements to establish whether that person is qualified or not to do the job. I think there needs to be a regulating authority that will be able to objectively determine if somebody is qualified to be a manager.”
It’s a legitimate concern for boards. Does the manager actually have the basic skills necessary for the job, such as knowing how to operate the management software, or how to read and understand a budget or a financial statement?
“The property manager is the team leader who’s coordinating the services of all of the professionals – both in-house staff and outside professionals – to make sure that the building is safe, comfortable, and a suitable place for people to live,” Wasserman says. “You want that responsibility to be in competent hands.”
Since there are no licensing standards, it’s up to individual management companies to determine their own requirements for property managers. Because those requirements are not standardized, when a board contracts with a new management company, there’s no way to know what level of experience the new manager will have – or even if he or she has any experience at all.
While every management company has different requirements when hiring, Wasserman believes that some skills are non-negotiable. “You need the ability to be able to work with people where everyone that calls is your boss,” he says. “Every unit-owner, every shareholder is one election away from being a board member. You can gauge the degree of success a manager has had in the business based on his or her board relations, based on the tenure with different boards.”
Licensing could also help prevent bad behavior. When an attorney, doctor, or other licensed professional has a complaint lodged against him or her, a review board will examine the complaint and handle repercussions, which can range from sanctions to suspensions to a revoking of the license.
Shareholders complaining about property managers have no such recourse. “There have been cases where property managers or individuals have run management firms, been accused of something or other, and shut their doors,” says Wasserman. “If you commit some kind of major fraud or theft, that person should not be allowed to be a partner in a management company going forward.” Licensing would be a deterrent against criminal activity (or even general bad behavior), in that a manager who has lost his or her license would no longer be able to work in the field.
Instituting licensing requirements could be difficult, though. A governing agency would need to be created, and standards would have to be decided on by the industry. Then there’s the issue of actually educating potential property managers – who teaches the classes? Are potential managers responsible for paying for their own courses, or will management firms step up? Wasserman believes the cost of schooling would end up being paid by the applicant, but acknowledges that it’s uncertain.
“That would be up to the standards of every individual company in the business,” he says. “The common practice in [obtaining] almost every license is that the individual seeking the license is the one who pays to earn it – I don’t know of any law firms that pay people to go to law school to get a license to practice law. I would see it being fairly similar in the real estate management field. The only thing that you will find in various professions is, if there are continuing education requirements, some companies pay for them and some don’t,” he adds, making a comparison to Continuing Legal Education courses, such as those offered by the New York State Bar Association.
In the end, though, establishing a licensing system remains a complex challenge. Wasserman points out that getting hundreds of companies to agree on one set of standards would take a herculean effort. In addition, the ramifications ripple into surprising areas. If there are requirements for property management, what happens to buildings that are self-managed? Does that person (or group of people) need to be licensed? What about insurance costs? Will an unlicensed property manager mean higher premiums for a building, and again, how does that affect self-managed buildings?
Wasserman acknowledges these concerns, but he still believes licensing is worth pursuing. “Everybody wants quality service from someone they can trust,” he says. “That’s really what it boils down to. With the absence of licensing, people are saving money on lower fees and possibly unqualified professionals. People want quality service. No matter what they’re paying, they expect quality.”