The Debate Goes On Licensing Property Managers

Six years ago, a scandal rocked the New York State real estate management industry for the second time in a decade. Thirty management company owners, agents and contractors were indicted for taking kickbacks for contract work at many New York City co-ops and condo buildings.

During that sweep of corrupt companies, two of the city’s largest management businesses—Marvin Gold Management and Elm Management Associates—were accused of taking millions of dollars in payoffs from contractors for work at luxury cooperatives, as well as low- and middle-income buildings throughout the city. One manager in the center of the controversy was accused of taking a total of nearly $4 million in kickbacks from contractors for work in some 74 buildings.

These scandals promptly re-ignited the often-discussed and very heated debate over whether property managers should be licensed. Currently, New York property managers are not required to be licensed—although many voluntarily take continuing education courses to stay current in the industry—and this fact still generates a good deal of controversy among residential industry players. Today, however, the interest in passing legislation to license property managers is either firing up or sizzling out, depending on whom you ask.

The Pros

On one side of the debate are the licensing proponents, advocating that managers should earn educational credentials and answer to a governing authority of some sort to ensure ethics and standards in the industry. Proponents firmly believe that such licensing may reduce the chances of a third round of scandal.

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2 Comments

  • Maryland State Legislators are now considering licensing of property managers. Advocates for Homeowners in Homeowner Associations and Condominium Associations favor this type of legislation theorizing that it will result in more consumer safeguards and provide a mechanism for ethics and governance complaints. Does anyone really believe legislation without a comprehensive ethics and good governance enforcement package will be anything more than a revenue stream for the state? Residents of HOAs are still crying for help in fighting corrupt and negligent boards and HOA officials. Property Managers who deem their income from the boards tend to serve them over the good of the communities affected. I'd appreciate any feedback. For more information on legislation and issues affecting HOAs, checkout the Maryland Homeowners Association.
  • I kind of agree with some of Ms. Davenport on the Licensing of Property Management. There are plenty of Certificate Programs available. I say this as a Licensed Real Estate Agent in the City of New York who can't seem to find a Licensed Broker who has not to this point worked to sabatoge my license and on the other hand I completed the Property Management Certificate Program under HPD only to meet with some of the most unethical behavior on both sides. Let me not forget to mention that I am a NYARM member. One of the issue that really should be addressed is the Reformation of those stiff necked Condo and Coop Boards that make life difficult for; buyers, seller, owners, renter, broker, agents and investors. Some of the actions that stem from so of the behavior are discrimatory to the point the labor department and fair housing actions should be larged against them.