LAURA'S LEGAL CORNER
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Dear Readers:
Over the past few weeks I have had the privilege of appearing at several of your Market Center sales meetings. One of the topics on which I presented was that of sales associates serving as property managers. While it is certainly understandable that you would want to provide another service to an owner whose property you are listing if it is moving slowly, you should be extraordinarily careful not to move from the traditional services a full service agent provides as a listing agent into the area of property management. If you don't understand the difference, get help from your team leader at once.
Here are the basic Keller Williams rules and the law:
1. In Texas , if you are a licensed sales associate, affiliated with a broker, there are no other legal requirements or restrictions on you serving as a property manager. If you make a mistake, legally or liability-wise it is just like any other mistake. Nevertheless, if you take on this area of service, you are proceeding into an area which is quite different than anything you do as a listing agent or buyer's representative.
Texas Occupations Code Section 1101.002: Real Estate Brokers and Salespersons; Definitions.
Texas Occupations Code Section 1101.005: Real Estate Brokers and Salespersons: Applicability of Chapter.
2. The Leadership Councils of the Northwest, Southwest and Lake Travis Market Centers have established a requirement that only licensed brokers who are affiliated with Keller Williams may provide property management services. If the broker is providing these services, he or she is required to do so separate and apart from Keller Williams, using her own identity and not that of Keller Williams.
Keller Williams does not receive any part of the property manager's fee or commission. This is something that the broker does on his own, using his own broker's status. Other marketing materials, other company logos, and a separate corporate or individual identity as a broker are required.
3. So, what are “property management services” and how do they differ from the traditional full service of a listing agent? Again, if you don't know the answer to this, you probably don't fully understand the very distinct purpose of property management. Do not launch into this without discussing it fully with your team leader first. Here are a few quick question-and-answer examples.
Q. After successfully leasing a residential property, the Owner you have served as a listing agent asks you to start collecting money from the tenant. Is this a property management service?
A. This is a classic property management service. What is your agreement with the client about where you will maintain the funds? When will you report a default such as a check for insufficient funds or failure to pay timely? What will your expenses be, and what will your fee for these services, if any, be? Many clients expect anyone handling funds to be bonded. Are you? Have you discussed this with your client?
Q. After successfully leasing a residential property, the Owner asks to you evict the tenant.
Hint: Texas Property Code Section 91.001: Notice for Terminating Certain Tenancies
A. This is a classic property management service. Do not ever do this unless and until you fully understand the serious consequences of wrongful eviction. Texas is a state that favors the tenant enormously. Even if you are an experienced property manager, you need to get legal help on this if it is not something you do often. And what you can do with a commercial property to evict a tenant is utterly different than what you can do with a residential tenant. Even worse, if your tenant has both commercial and residential uses for a property he or she is leasing, you have complicated legal issues that can get you sued or even enjoined if you do not proceed with the greatest of care.
Q. After successfully leasing a residential property, the Owner asks you to start handling all the routine maintenance on the property, asks you to hire contractors, asks you to review their invoices, and then asks you to forward the invoices for payment by the Owner.
A. This is a classic property maintenance service and one which can cause you a lot of heartache if you don't have a carefully detailed agreement. If you do agree to provide this kind of service, you need to have a carefully drawn agreement that places the responsibility and liability on the Owner's shoulders for many things including nuisance, and environmental, damage and construction insurance. Were you aware that in Texas , most permanent property insurance policies do not cover construction related activities that result in damage, including routine repair and maintenance? Furthermore, you need to clearly understand who is responsible for these activities.
Q. After listing the property for sale, the Owner - who lives in another state or country - asks you to just look after the property and report back to him the condition and needs of the property whenever you are showing it.
A. Surprise! Without additional duties required by the Owner, this is not property management. This is what a great full service agent does to help his client. But remember, when you spot something like the plumbing leaking or the toilet running, e-mail the client promptly, but don't get into a situation where your e-mail suggests this is what you are going to do as a part of your ongoing relationship. Spotting something wrong when you are showing a property and contacting the Owner to help him preserve the value of his property is good service; suggesting that this is what you do because you are a great agent is a mistake. Take care in what you say in your e-mails. Read them a time or two before you send them and make sure they don't suggest you or anyone involved in showing the property is taking on the responsibility to observe at regular intervals the condition or needs of the asset.
Laura Fowler and THE FOWLER LAW FIRM P.C . are very proud to begin their fifth year representing the Southwest and Northwest Keller Williams Market Centers , many of its wonderful agents and in turn their wonderful clients, family and friends. We are so grateful to so many of you who have helped to make our firm a success. The Fowler Law Firm P.C. is a full service law firm whose attorneys have many years of experience in the handling of real estate, family law, probate and estate, business formation and taxation. We never charge a client a fee or incur any expense until the client understands and agrees. In addition, we often counsel with your clients and friends and give them the information they need at no charge when we cannot truly be of service. For more information or to refer a matter to us please contact us at (512) 441-1411 or visit our website at www.thefowlerlawfirm.com .
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This information is
provided by Laura S. Fowler, Attorney at Law with
The Fowler Law Firm PC. It is not intended as a
substitute for careful review by legal counsel of
your choosing. We would be most honored to assist
you in your every real legal need.
Contact Laura
Fowler at lfowler@thefowlerlawfirm.com
or
call (512) 441-1411.
As with any legal
issues, please consult your attorney with
questions.
