Prop Mgr AND Realtor - seems unethical to me

Started by SueG • 44 replies • 2374 views

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SueG (Illinois)
Posts: 3

Posted:

This is a great site - thanks to everyone who takes the time to respond to everyone's questions!

I am the executor of my late mother's condo so I was not familiar with condo life til now. The property manager offered to list this unit and I think this seems odd - wouldn't there be a conflict of interest, disclosure issues, etc.

I just filed a lawsuit against the HOA for multiple sewer backups. There are several "dips" in the line that serves the units above and my unit. Other than paying for the plumber to come and rod (and rod and rod and rod), the HOA refuses to acknowledge the problem.

Had I taken the PM up on her offer to list the unit, I wonder how this would have played out since she would be my realtor.

Is it common for the PM to also be a realtor of units they manage?

RobertR1 (South Carolina)
Posts: 5,164

Posted:

SueG,
First I think you need to know more about your documents before you start filing Lawsuits. But suppose I am wrong and you know all about your documents and you still choose to file suit. You choice and it may well be the right one.

But to cope with the big picture and resolve this Manager issue you are going to have to know your documents well, and any applicable state laws, or county laws, etc.

First establish if this person is actually a realtor registered in the state. Who is their Brooker in Charge? On the off chance this person is a registered broker he has to have a company registered with the state. Is there any reference to the manager serving as a realtor in your Job discription of the manager. This kind of thing does happen, it is bad business for the association and can lead to all kinds of problems and should not be allowed by the Board. The Board might not care but they will care if this person violates some legal reguirement of the state. I also would contact the BBB and ask their advise. If your association has a lawyer I would ask the Board for a legal ruling.

This has got trouble written all over it, sure as God made little green apples.

JosephW (Michigan)
Posts: 882

Posted:

There are a number of management companies around the country that also have real estate arms. This is a throwback to the days when apartment management companies also had real estate and apartment finder subsidiaries and as a result is a pretty standard item in large cities like NY and Chicago. It is also normal in resort condo areas where the management usually handles the rentals and often the re-sales. It is also not unusal for management firms that handle large scale associations to have a real estate office for that association.

Having said that, if disclosed in the contract, and handled fairly (no special services if you use them as your real estate agent, vs. running into problems if you don't), there isn't an ethics problem in the strict sense. However, I agree with Robert, it's just something I would rather not deal with, and the potential for conflicts is too great. From the association's perspective, I would not want to have this as one more potential conflict area.

Joe

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RobertR1 (South Carolina)
Posts: 5,164

Posted:

Joe,
I certaily don't doubt this happens and being from a resort area, I am aware that some type condos get all twisted to where they are nothing but rental and re-sale units. Another potential for a problem, at least where I am, some other Real Estate office might feel the Condo Realtor is restricting their access to a free market you can have a dust up there. I doubt the Realtors would condone exclusive contracts in Condo, but I would not be surprised to see in happen in large complexes. On our Island we have a Real Estate office that at one time was run by developer. At that time there was no way they had exclusive coverage of all units on Island. Now, we are reaching buildout and the Developer Real Estate office is branching out into areas off the islands.

SusannaM (Florida)
Posts: 366

Posted:

I am in NE Florida. Not too long ago I did a search for local property mgmt. companies, and encountered several with internet portals that offer both property mgmt. and real estate services. I spoke to a realtor friend and he confirmed to me that since the market went downhill, some brokers decided to combine their professional services under one operation. Large RE firms have always had a separate division for rentals and property mgmt. During the RE boom of years past realtors were so busy making good money that they would not bother with rentals or prop. management. Things have changed since then and some realtors have gotten their CAM license which is very simple to obtain in FL. CAM stands for community association manager.

SueG (Illinois)
Posts: 3

Posted:

Thanks to everyone who responded. Apparently this is a common practice. I just think it seems like a huge conflict of interest. And now that we are "at odds", it would have been very awkward to be in a contract to sell with this person.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

SueG,
I would certainly not conclude it is common practice. From what Susanne said about NE Florida it may get to that for the reason she stated. It is still pretty much what your Board allows, in fact it is entirely what your Board allows. The BOD writes the job discription on the manager, they can exclude him/her from conducting any other business on the property, and frankly if it were completely up to me, none would every be allowed to be realtors and sell in the association. Incidently there has been no comment that realtors work for Real Estate Companies and must have a brokers license to close on property. That means the association has a business relationship with the Broker Business, which I also think is illegal. It is just plain bad business, especially with all the associations top heavy in absentee owners. Why not just give them a dictator license, they can sometimes act that way now.

SusannaM (Florida)
Posts: 366

Posted:

Robert, I can see your point but SueG "homeowner" is not a BOD member, is she ??
and even so, a listing contract between a private individual such as homeowner and XYZ Realty has
nothing to do with any BOD or HOA.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Susanna,
You are right in your conclusion if the facts are as you state them, but looking back on the OP first entry I got the impression the PM that she is dealing with after purchase is employed by the association and is also employed by a realty company to contract property in the association.

Now Joe has concluded this may not be against the law and as long as no problem develops it is ok. Although he concedes it doesn't look good. I contend it doesn't look good, it is a conflict of interest, and is probably illegal because if the PM is employed by the association and by the Realty Company and has the blessing of the association to conduct this business, that would constitute a Business agreement between the association and a (preferred) realty business. If the Realty business develops trouble and does a wrong deed then the association would be part and parcel.

MaryA1 (Arizona)
Posts: 7,043

Posted:

If a conflict of interest does exist it would depend upon the state statutes as to whether it has been handled properly. In some instances if the conflict is mentioned to the board and they have no problem with it then everything is OK and no laws have been broken. However, if this particular situation does qualify as a conflict of interest and has never been brought to the attention of the board then perhaps a law has been broken. We don't have enough info to determine if a conflict of interest really exists and perhaps the original poster doesn't either.

SueG (Illinois)
Posts: 3

Posted:

Interesting discussion. Let me clarify that I didn't take the manager's offer to list the unit so there is no conflict of interest. I just was curious. If I were a homeowner, would I want my prop mgr to be doing another job on the association's time and if I bought this unit (with the mgr as the selling realtor) I would be concerned that the property manager knows history of the units - example: plumbing issues, leaks, defects etc that weren't disclosed. I realize it is the owner's responsibility to disclose but that just seems really risky. In the declaration that I have, it doesn't really list the "duties" of a property manager so I guess it's allowed? This was a hypothetical question. After my experience, I am thoroughly happy to be a homeowner of a single family home that has absolutely nothing to do with any type of association!

Thanks again for your opinions.

SusannaM (Florida)
Posts: 366

Posted:

Case closed. Good luck with your lawsuit.

MicheleD (Kentucky)
Posts: 4,491

Posted:

On the surface I don't think there's a conflict of interest.

And it's in the PM's best interest to keep the property maintained as well as sold quickly, in order to have a dues paying resident.

I suppose there are times it could get sticky, but, as I said, on the surface and for the sake of helping to keep the properties moving, it's not necessarily a bad idea.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Michele,
Where oh where did you get the idea that a PM job is to sell real estate or to abet the sale of Real estate. His job by description if Property Manager, not Individual home caretaker or fix up your unit so it sells quickly. or advertise your property, or show your property. In an HOA, the PM is charged with management of the common grounds, and the administration of same and management of assessments, fines, fees, etc, etc, and the record keeping of these funds. Nothing to do with individual properties unless they individually violate a covenant.

In a condo the PM is charged with the upkeep and maintenance of the common property (the buildings and land), plus finances bookkeeping etc, etc. They have no responsibility to the owners to provide any kind of owners assistance that is not provided in kind to all. They can not go and let a renter in because you forgot to leave your keys in a secure place. Legally, they can only do this in an emergency. Granted a good PM steps over the line to assist the owners on occasion but that is not their job . The sale of your unit in a condo is your job and not the PM.

But this thread is dead anyway, as our OP was, in effect, playing games, or I should say, she is not playing the same game we are playing.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Sorry, Robert, I think we will just have to agree to disagree on this one.

A property management company may have a multitude of "hats" it wears, or, put another way, an entire menu of services it provides to many clients.

One of those many services, apparently in some areas, is realtor.

Call it a "full service agency," if you will.

A property management company seldom has one client. And seldom does its portfolio contain clients who all have the same needs and/or require all the same services.

I'm just saying it's not necessarily a conflict of interest, in and of itself, on the surface. It probably could be under the right set of circumstances, but not in and of itself.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Michele,
I really respect your posting here and you are smart as a tack, and maybe I am being argumentative when I mention this but, we really are talking oranges and apples.
Maybe if you could show me in the OP there was some mention of Property Management Companies, I could get straight. I thought the reference was to Property managers. Maybe I could stretch a little if the reference was Property Managers assigned by a Property Management Company, and even then I doubt I could reach that far as to agree the manager of property should be or could be a Realtor. If the Property Management Company has a Real Estate arm, let them send a Realtor to do the job. You will also note that in Florida and probably elsewhere, property management companies are also cutting costs and one way is to get rid of their property managers (licensed by Florida) and assigning a Realtor the job and getting the Realtor a PM license. And that is also double double conflict of interest, IHMO>

MicheleD (Kentucky)
Posts: 4,491

Posted:

Again, we will just agree to disagree, and I will agree with you that you might be getting argumentative over semantics; splitting hairs, if you will.

Property manager, management company, property management conglomerate, makes no difference to me.

Since the original poster had already gotten her particular question answered and the thread had effectively beaten the dead horse into submission, I was just offering my own personal opinion about in general or taken at face value whether a property manager, either as part of a one-person operation or 150-person operation, is a conflict of interest.

I don't believe so.

Just my take on it.

I do think there is potential there for conflict of interest, but not just in general.

But then again, I also feel that it has potential to be a good thing for the community as well.

But, that's okay that we don't see eye-to-eye.

I just want to be sure that you understand it doesn't matter to me if it's one property manager or an employee of a huge Property Management GigantiCo.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Michele,
Please tell me what the answer was that the OP received ?

(Yours)
Since the original poster had already gotten her particular question answered and the thread had effectively beaten the dead horse into submission,

RobertR1 (South Carolina)
Posts: 5,164

Posted:

To all:

I would like to paste in the OP response to the first few answers to her question.
**********************
Thanks to everyone who responded. Apparently this is a common practice. I just think it seems like a huge conflict of interest. And now that we are "at odds", it would have been very awkward to be in a contract to sell with this person.
*********************************

This poster says she is suing the Regime for some sewer pipes that were installed wrong, if I recall. Given her position as the principal in her mother's behalf, she concludes it would have been awkward to persue this interest if she had a contract to sell with the PM. Doesn't this clearly demonstrate conflict of interest?

If you have the question? I am up this late because I have to be, not because I enjoy it.

SusannaM (Florida)
Posts: 366

Posted:

Robert, sorry but this thread is not about your differences of opinion with Michelle. The OP has already thanked everyone for their "opinions" about a hypothetical scenario, and she will do as she pleases regardless of what anyone continues to opine on this forum. That is clear. There is no need to prolong the argument.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Quote:

Posted By RobertR1 on 01/05/2009 11:21 PM
To all:

I would like to paste in the OP response to the first few answers to her question.
**********************
Thanks to everyone who responded. Apparently this is a common practice. I just think it seems like a huge conflict of interest. And now that we are "at odds", it would have been very awkward to be in a contract to sell with this person.
*********************************

This poster says she is suing the Regime for some sewer pipes that were installed wrong, if I recall. Given her position as the principal in her mother's behalf, she concludes it would have been awkward to persue this interest if she had a contract to sell with the PM. Doesn't this clearly demonstrate conflict of interest?

If you have the question? I am up this late because I have to be, not because I enjoy it.

Robert, thanks! It's easy having a discussion with people who answer their own questions! From what I can tell, that was her one and only question.

Please read my posts again. I never said "never" and never said "always."

I'm not a black-and-white person, I allowed for the potential for conflict of interest, but I also clarified that, on the surface, in and of itself, a PM/realtor is not necessarily a conflict of interest.

Now, if it were a MANDATORY situation, where the residents (and their heirs) HAD to use the PM as their listing realtor, then that's another hunting dog.

But that was not the case here.

(Be careful, Robert, Mom is herding us again.)

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Michele,
Thanks for your reply and clarification. I am happy we can talk about differences.

YeHaw!! Move'em out, move'em out, get along little doggie!

MaryA1 (Arizona)
Posts: 7,043

Posted:

Get em on, move em out, move em out, get em on, get em on, move em out, Rawhide! I think it's "dogy" or "dogie" (a stray or motherless calf) not "doggie" (aka dog or puppy). BTW, spell check doesn't work with this word! LOL

SusannaM (Florida)
Posts: 366

Posted:

Mary, can't help but wonder if your claim that you prepared and filed "complex corporate tax returns" is indeed bogus. I've never encountered an accounting professional writing the type of "statement" you just did.

GeorgerwilliamsW (Indiana)
Posts: 975

Posted:

As John noted elsewhere, it's time to move on, folks. This is not a social chat room.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Thanks, Dad.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Quote:

Posted By SusannaM on 01/06/2009 12:56 PM
Mary, can't help but wonder if your claim that you prepared and filed "complex corporate tax returns" is indeed bogus. I've never encountered an accounting professional writing the type of "statement" you just did.

Susanna,

You are certainly free to think as you like. I choose to keep secret what I think about you!

MaryA1 (Arizona)
Posts: 7,043

Posted:

"Dad" and anyone else who objects doesn't have to read the "chat"!

MicheleD (Kentucky)
Posts: 4,491

Posted:

Quote:

Wow.

Mom.

Calling someone a liar whom you don't know.

Over a throw-away comment.

Nice.

Mary, kudos on your restrained response.

JohnK3 (Pennsylvania)
Posts: 967

Posted:

Quote:

Posted By GeorgerwilliamsW on 01/06/2009 1:01 PM
As John noted elsewhere, it's time to move on, folks. This is not a social chat room.

For the record, I have no problem with chat. In fact, it's often enjoyable to read; demonstrates some (I stress some) of our correspondents have personality.

My only objection is when threads turn into a repetitive tape loop/echo chamber. But even then, tough darts on me. I don't have to contribute and don't have to keep reading. Nor would I whisper the slightest complaint unless it involved me and my failure to be a good sport.

But that's just, as Mary will attest, what a good boy am I.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Right on, John. And as I see it, the reason many of the threads on this group often go off-topic and become a bit "chit-chatty" is because we don't have the opportunity to go "off-line" with our group "friends". Most other newsgroups that I have been a part of have the option of replying to the group or directly to the poster. This enables the group members to take a topic off-line so as not to bore everyone with their chit-chat or their little spat. I have many "Internet friends" that I've met through various newsgroups and have enjoyed private emails with over the years.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Mary:

FYI:

my yahoo email: [email protected]

"PM" me some time. . . (wink)

SusannaM (Florida)
Posts: 366

Posted:

I hate to add yet another unrelated post to this thread but Mary, that's not an excuse. HOATalk is not obligated to provide you or anyone else with features such email or instant messenger. You could have volunteered to your "pals" here an email address long time ago. I've already received emails from 3 posters. I use a yahoo address for internet purposes, and keep my private email addresses separate.

MicheleD (Kentucky)
Posts: 4,491

Posted:

You're such a good Mom.

What a model for us all.

Thanks, again.

JohnK3 (Pennsylvania)
Posts: 967

Posted:

Awhile ago, I did ask HOATalk if we "regulars" could have a thread to discuss off-topic (non-HOA) topics. HOATalk replied that was not in their cards. And as it's their dime which finances these boards, that's fine with me. On the other hand, I can't recall an instance in which HOATalk has interferred or otherwise slapped any wrists when "chat" has entered a thread. I'll guess because on IMBs "chat" is a given, perhaps expected behavior and that HOATalk chooses to tolerate(?) it unless or until it gets way out of hand. So looks like dilittante "chatters" are safe - for the time being. Though I 'spose if someone chose, and had the ability, an off-site/off-topic chat board could be set up. I'd join. Anybody else?

GlenL (Ohio)
Posts: 5,491

Posted:

Perhaps a Yahoo or Google group, they're free.

Studies show that 5 out of 4 people have problems with fractions

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Glen and all,
Is it possible for those of us that want this interaction could freely post in our Profile, a e-mail account each could set up in say Gmail or something. Or am I just saying what you all just said.

MaryA1 (Arizona)
Posts: 7,043

Posted:

I'm game. As I said b/4, I've met a number of people thru the internet newsgroups that I've maintained an "internet" friendship with. A Yahoo group is a possibility. Perhaps someone who's more saavy about these things can get one started.

MicheleD (Kentucky)
Posts: 4,491

Posted:

For what it's worth, even with that, there will still be "wandering" threads from time to time.

It's the nature of the beast. The human animal beast that is communicating through the forum.

So we will continue to do it from time to time.

Just as some people will feel compelled to be "Thread Police" or "Forum Mom/Dad" and try to tell grown-ups how they should or should not be behaving.

That, too, is just the way these things work.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Yep! It's called human nature.

DwightT (Idaho)
Posts: 664

Posted:

The HOATalk website appears to be using the web portal software called DotNetNuke (also known as DNN). It's been a couple years, but I have worked on a DNN site before (module development).

DNN has a configuration option where individuals could choose to make their email addresses available to others on the site. I believe that HOATalk had that feature enabled when I first signed up. If I remember correctly, there is even a DNN module available that would allow people to send private messages to others through the website without having to directly reveal anybody's address (though one could still include their address in the body of the private message if they wanted to).

As others have noted enabling that private message feature still wouldn't stop the discussions from wandering, but it would allow others to suggest that it be "taken to private message" if the conversation goes too far astray.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

To all,
Can we then agree that we should notify HoaTalk, we would like to discuss using this DNN feature (God help me, I am talking like a Nerd and really haven't a clue what a DNN is, even with Dwight's explanation.)

Can we just assume they would read this thread. If someone comes knocking on my door and say they are the Hoatalk Police and I am going to jail, I will be very upset.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Quote:

Posted By RobertR1 on 01/08/2009 1:58 PM
If someone comes knocking on my door and say they are the Hoatalk Police and I am going to jail, I will be very upset.

Naw. Don't worry about it. The only power self-appointed "Forum Police" have is in their own heads.

But it would be great if we could have the PM feature turned on!

I see an option on my own profile to "email member," but I can't seem to find any way to locate other users' profiles.

DwightT (Idaho)
Posts: 664

Posted:

Quote:

Posted By RobertR1 on 01/08/2009 1:58 PM
To all,
(God help me, I am talking like a Nerd and really haven't a clue what a DNN is, even with Dwight's explanation.)

So you feel there is something wrong with being a Nerd??

(I'm obviously a long-time member of the slide-rule/pocket protector club and proud of it)

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Dwight,
I am a Nerd also, it says so on my Best Buy T-shirt, that someone gave me. Nope, correction, it says I am a Geek.

Nope, don't have anything against Nerds, I kinds think they are neat because their mind works so much different than mine. My Grandson can sit down in front of my computer and get that thing moving, he types at unbelievable speed, flash forward and backward and never loses anything, no doubt his mind is seeing a different problem than mine when I look at my computer.

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