PM may stop providing me his services...

5 Replies

So, some of my other posts show I bought a few units from a guy that offered owner finance. His SFH are all in a land trust and the way the attorney wrote the note is we are both beneficial interests of the trust (not sure if I'm using right terms for explaining this) and I gain more and more interest as I make my payments to him. After last payment, he drops off. He offered to PM for me for a discounted rate because, after all, he has interest in the properties. However he is worried because he doesn't have a RE license. The way I've looked at it was we are both owners for now. He's worried about legal ramifications that I or maybe a tenants could bring. If something could go wrong.

My question is… the way we have this deal set up, is he protected from being fined for not having a license? And if he is, how? If he is not, what can we add or change to make this work without getting a RE license (waiver, ownership in my LLC, etc). Please advise.

In my state, a person can manage their own properties without having a license. It is when they start managing for others in exchange for compensation that they run afoul of the law.

Since he owns a portion of the property, he should be fine. It is when he drops off the notes and you own 100% of the property that he will be in violation. At least this would be the case if you were located in CO.

Mindy Jensen, Real Estate Agent in CO (#FA100049656)

The 'legal' argument sounds bogus to me.  He's trying to skirt the work and responsibility. I would negotiate where 10% more of my payment buys principle/ownership.  Now you will have to do it yourself or hire it out. You probably don't want a PM that's negative and angry @Chad Hurin  even if they have an interest in the property!

Oh ok.  Good to hear @Chad Hurin .  With an ownership interest in the property, you or he shouldn't need a license to manage as @Mindy Jensen points out.

Not an atty, but if the property is owned by a trust, then neither of you are the owners, the trust is. As such, the trust documents determine who may do what but I pretty sure that as a legal entity, the trust would need to hire a third party manager if the role is not defined as a function of the trust managers. Very round about way of saying talk to an atty.

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