Providing Property Management Activities Outside Your Brokerage
| February 07, 2017
- property management is an activity that requires a licence in Alberta
- every licensed activity you perform must be through your brokerage
- you can only be licensed with one real estate brokerage at a time
- industry professionals cannot provide property management services outside of their brokerage, even when they’re licensed in property management
These highlights sound straight forward, but problems arise when someone holds a licence for property management activities but provides those services outside of their brokerage. The Real Estate Council of Alberta is observing an increase in this type of activity.
Providing property management services is a trade in real estate. To provide property management services, you must successfully complete the educational qualifications to conduct property management services and register with a brokerage that allows its registrants to provide property management services.
When you provide property management activities to an owner, you must do it through the brokerage identified on your licence. You must not establish a separate entity to provide property management services.
When an associate provides property management services under a company that is not their brokerage, that’s a breach of the Rules. Additionally, a side company, which isn’t a licensed real estate brokerage, could find itself in contravention of the legislation and subject to an administrative penalty of up to $25,000 for each day that the contravention continues.
Advertising your property management services
Now, let’s say that you’re licensed in all real estate sectors, and your brokerage allows you to do property management – you need to ensure that advertising you’re placing for your property management services clearly indicates your brokerage’s name.
If your brokerage is ACER Real Estate, and you’re advertising your services as a property manager, you need to ensure the ad is clear about your brokerage, ACER Real Estate. You may want to add additional wording that indicates you provide property management services through ” ACER Real Estate”, but you must clearly identify the trade name of your brokerage. .
You must receive your compensation through your brokerage
In real estate, when a consumer agrees to work with you they’re actually entering into a service agreement with your brokerage. Property management, as one of the real estate areas of practice, is no different. You can’t contract with a consumer to provide property management services without it being on behalf of your brokerage.
You must deposit all money you receive for rental or lease income into your brokerage trust account. The owner pays the brokerage for all property management services provided.
We know that all of Alberta’s industry professionals take the professionalism of the industry and consumer protection very seriously. If you want to offer property management services, simply ensure that you have the qualifications and are doing so through your brokerage.