Property management is as much about legal regulation as it is about property.
Property management is the oversight of leased property on behalf of the owner. It generally entails leasing, rent setting and collection, and building maintenance and repair. State licensing and tenant law make up the bulk of legislation affecting property management in California. Federal laws having to do with fair housing and disclosure are also very important to the property management business in any state.
Licensing
A property manager in California has to have or work under someone who has a real estate broker's license. The exception to this requirement applies to property owners who manage their own buildings. According to the state department of real estate, property managers must be familiar with the definition and rules of agency, contracts, fair housing, rentals and leases, business administration, marketing, purchasing, extensions of credit, accounting, advertising, insurance, repairs and maintenance, taxation and public relations. The state licensing exam and renewal education requirements cover these topics.
Tenant Law
Because property managers handle many responsibilities requiring tenant interaction, they must be familiar with landlord-tenant laws. In California, these laws span virtually every phase of tenancy, from advertising a unit when it becomes available through tenant move-out at the end of the lease term. State legislation focuses on protecting tenants from discrimination, limits security deposits, regulates deposit disposition, requires standards of habitability and limits the time and cause for a manager to enter a unit.
Other State Law
Laws that affect property management in California are found in 15 separate state government codes. They cover a wide range of issues outside standard tenant law. They include the Health and Safety Code, which prohibits a landlord or property manager from denying a tenant from opening a child care facility in his rental unit, to the Public Utilities Code, which allows for the placement of liens for the owner's or tenant's failure to make utility payments.
Rent Control
Rent control is a form of local legislation that regulates the eviction process and increases in rent. As of 2010, more than 40 cities in California have rent control legislation, including San Francisco, Oakland, San Jose, Los Angeles and Berkeley.
Other Considerations
In addition to being regulated by legislation that affects the operation of a rental property, the property management company is also a business entity itself and is subject to laws affecting any business in California. It must maintain insurance for both liability and errors and omissions. It also often is an employer. And it must pay state tax. All of these issues are subject to regulation through state law.
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