Are you a commercial property owner in Colorado? Are you a business owner looking to expand to Colorado? Property management compliance regulations vary from state to state. If you manage your own property, use an in-house broker, or rely on a broker for hire, you might be out of compliance based on state-specific regulations. Here’s what you need to know about Colorado property management and how Designated Broker Solutions can make sure your business continues to prosper.
Property Management and Compliance in Colorado
Many states require property managers to obtain a real estate license, and Colorado is no exception. The Colorado Real Estate Commission (CREC) identifies multifamily and commercial real estate (CRE) property management as “real estate activity.” Simply stated, if the property management company manages applications, negotiates lease terms, handles rental and leasing payments, and collects deposits, that company must comply with all CREC real estate regulations. In Colorado, those regulations require property managers to have a Colorado-licensed broker affiliated with their firm.
Some Things to Know About Colorado Commercial Property Management
1. Property management firms in Colorado must have a real estate license, with one exception. Apartment and condominium managers who live on-site and do not negotiate lease terms do not need a real estate license. However, Colorado law requires most CRE and multifamily property managers to obtain and maintain a state-recognized broker license.
2. Obtaining a real estate license in Colorado takes a significant investment of time and money:
1. Complete at least 168 hours of approved coursework.
2. Submit to background checks and fingerprinting.
3. Pass a rigorous exam.
4. Pay a broker application fee.
5. Apprentice under a more experienced brokerage firm for 24 months before practicing independently.
6. Continuing education courses to keep license current.
7. The time and effort required for an in-house employee to become a licensed broker can be overwhelming.
That’s why Designated Broker Solutions provides businesses with immediate access to experienced, licensed brokers who make sure you’re complying with all real estate laws.
Consequences of Practicing Property Management Without a License
The CREC requires property managers to have a real estate license to practice anything it deems as “real estate activities.” Those activities include negotiating leases, soliciting tenants, collecting rent and deposits, and supervising repairs. Property managers who oversee commercial or multifamily properties perform many of these tasks daily. The bottom line? If you’re a property manager in Colorado, but you’re not a licensed real estate agent, you’re likely breaking the law.
Renting” a license from someone offering to be your designated broker is risky business. Most of these services do not include reviewing documents, reconciling trust accounts and other supervisory duties as required by law. If audited, both the broker and the property management company could be found to be out of compliance
Companies that manage properties without a state-recognized real estate license could face harsh punishment, including steep fines, restitution, probation, and even jail time. Furthermore, each infraction can be charged as a separate crime. A company that continues to practice property management after falling out of compliance could face individual criminal charges for every transaction made during that time. Falling out of compliance is illegal, it’s expensive, and it could be devastating.
Why Choose Designated Broker Solutions?
If all this talk of licensure and compliance has your head spinning, don’t worry. There’s an easier way to ensure your property management company meets and maintains all Colorado compliance regulations.
At Designated Broker Solutions, we provide licensed brokers who work with your company to keep everything running smoothly. We are licensed in 27 states, including Colorado. We’ll assess your business quickly, making sure all associated properties are compliant with Colorado commercial real estate. Then, we will continue to monitor your properties to make sure you remain compliant in the future.
Our licensed brokers take care of all necessary paperwork, and we will train local team members to ensure they understand compliance requirements. At Designated Broker Solutions, we are more than just third-party brokers. Your monthly fee includes ongoing monitoring of your property management company, making sure you’re complying with all Colorado real estate regulations. It’s a small price to pay for peace of mind.
Want to learn more about our services? Contact us today for a free consultation.
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