A property manager is a business that manages the operations of residential, commercial, or industrial properties on behalf of the owner. The exact responsibilities of a property manager depend on the type of property, how it is used and what its legal status is. A manager might work for the board of directors of a homeowners association, a landlord who owns residential rentals or the owner of a commercial space.
A legal consultation in California with a California lawyer would help a person learn more about the legal complexities of the property manager-owner relationship in that state.
For example, property managers are common in the world of homeowners and condominium associations. Generally, homeowners associations (HOAs) are governed by a board of directors. The directors are owners of residences in the association. They commonly hire a professional management company to manage the HOA’s operations.
The property manager provides accounting services, collections of delinquent HOA fee accounts, finding the contractors the HOA needs for its amenities, e.g., landscaping and pool operation, and enforcing covenants, the rules of the community.
For condominium associations, the property manager would also have to maintain the exteriors of the structures and certain interior features, e.g., elevators and stairways.
Landlords may also employ property managers to do the work of finding tenants, collecting rents and maintaining the property they rent. A property manager may also provide accounting services for an HOA, condominium association or landlord.
Property managers are also likely to handle legal matters, ensuring that the HOA or landlord comply with federal, state, and local laws. They may handle communications with a lawyer or lawyers who represent the owner’s interests in connection with legal issues that arise.
What Are Common Property Management Disputes in California?
Property managers are agents of the boards of directors, landlords and companies that hire them to provide management services. California law imposes a variety of legal duties on both principals and agents, and property management disputes are likely to involve these duties.
For example, California law requires property managers to have a real estate license unless they work under the supervision of a licensed real estate broker. The California Department of Real Estate administers a real estate licensing exam, which addresses real estate law and ethical practices. If an agent were to misrepresent their status as a licensed agent, they could have liability to an owner who hires them.
Property managers who supervise rental properties and handle finding tenants could have legal problems if they are not licensed. Property managers who manage rental properties must know the state and local laws that regulate residential evictions. They must respect a tenant’s right to live in residences that are fit for human habitation and otherwise maintain the property according to the law.
Strict guidelines govern the eviction process in California, and a property manager should be familiar with them. Tenants can only be evicted for legally allowed reasons and at the end of their lease term. Formal notices at legally specified times must be given to the tenant.
Federal and state law also govern the process of screening applicants and this is yet another area of the law with which a property manager must be familiar. Finally, landlords, or their agents, must have a court order to remove tenants or their belongings from a rental unit.
Property managers must make sure that their principal’s property complies with the implied warranty of habitability, which requires maintaining properties in a safe and healthy condition. This includes timely repairs of essential utilities such as plumbing and heating. Tenants have the right to request repairs, and failure to address them promptly could lead to negative legal consequences. A property manager must make sure the condition of the property complies with the local housing code.
Homeowners associations are governed by a completely different set of laws that affect how they deal with the members of the association, the owners of residential properties within the community. For example, homeowners must obey the covenants in the governing documents of the community, but boards must respect the governing documents and certain laws when they seek to cite an owner for failing to comply and bring them into compliance.
The property manager of an HOA or condominium association must be familiar with the governing documents of the communities they serve and the federal, state, and local laws that apply in these communities.
How Does the Property Management Dispute Process Work in California?
Under the law of agency in California, an agent may impose liability on their principal when the agent acts within the scope of their authority. Therefore, principals can be legally liable for the acts of their agents, even if the acts are wrongful, again, if they were done within the scope of their agency.
So a person who has been harmed by the acts of a property manager might look to the property owner for a remedy for the harm done, because the owner may be liable as the principal for the acts of their agent.
Of course, agents are legally required to act in good faith and within their authority. If they do not, they may be personally liable for harm caused by their actions committed outside the scope of their authority.
A principal owner cannot be liable for the acts of their agent if there is no agency relationship. Agency relationships are established in 2 ways, through authorization or ratification. When a principal expressly authorizes an agent to perform on their behalf, then an agency relationship has been created.
Also, where an agent acts on the principal’s behalf without authority, but the principal accepts the benefit of the agent’s actions, an agency relationship is also created. This is ratification.
An agent owes certain duties towards his/her principal and a principal owes certain duties towards his/her agent. The scope of an agent’s duty to the principal is determined by:
- The terms of the employment contract between the principal and the agent
- The scope of the authority that the principal gives to their manager and the agent’s obligation to act with fidelity to the interests of the principal.
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Can an Owner Sue a Property Management Company in California?
An owner can sue a property management company in California if the property manager fails to fulfill the terms of their contract with the owner. An agent manager is liable to the principal owner when they act outside of their actual authority, but with apparent authority. An agent is liable to indemnify a principal for loss or damage resulting from any act they do that exceeds their authority and causes harm to a third party.
In other words, if a manager-agent acts outside of their authority and creates liability on the part of their owner-principal to a third-party for harm they suffer, the agent has to indemnify the principal for their losses.
A principal also owes the performance that it promises to their agent in the employment contract between the principal and the agent. A principal has a duty to fulfill both the express and implied terms of the contract between themselves and an agent.
- To compensate the agent as promised in their contract
- To indemnify and protect the agent against claims, liabilities, and expenses incurred in discharging the duties assigned by the principal.
Because of the fiduciary relationship, a principal owes his/her agent a duty of good faith and fair dealing. However, a principal can be relieved of contractual obligations by an agent’s prior breach of contract.
If a property manager harms an owner by acting outside the scope of their authority, the manager may be liable and give the owner grounds to sue. Or, the agent may breach their contract with the owner and give the owner grounds to sue for breach of contract.
How Would I Litigate a Property Management Dispute?
How an individual would litigate a dispute with a property manager would depend on the individual’s role in the dispute. It would also depend on which type of property owner is involved, e.g., the board of directors of an HOA, the landlord of a rental property or the owner of some different property. Different laws apply in each of these situations.
However, generally speaking, an individual who has been harmed by a property manager would address their complaint to the property owner. They might start with a letter that states the legal basis for their claim and explains why the owner is liable for the actions of their manager.
Certain laws apply in a situation that involves an HOA and one that involves a landlord and a rental property. Still other laws would apply in a situation that involves a commercial situation. Still, if a letter does not lead to negotiations that result in a resolution of the claim, the individual may have to file a lawsuit for money damages in a civil court in California.
Do I Need a Lawyer for a Property Management Dispute in California?
If you have a dispute with a property manager, you want to talk to a California landlord tenant lawyer. Whether your dispute involves the property manager of a rental property, an HOA, a condominium association, or a commercial space, you need to consult a lawyer.
A wide variety of laws may apply to your situation. Your lawyer will know which laws to consult to determine if the manager in your situation is liable to pay you damages to remedy a harm done to you.
