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California Property Management Compliance Services

Dec 24th, 2014 | By | Category: Real Estate Broker Law

How we can help your California property management company with BRE compliance issues!

BRE property management compliance lawyer

Introduction

2015 is a new year for real estate, and PROPERTY MANAGEMENT AND TRUST FUND COMPLIANCE might be on your list of things to get in order for the new year.  We have had clients tell us “we have had on our list to hire a property management compliance company for sometime now.”  Okay, maybe this isn’t exactly FIRST on your new years resolution list, but it should be something to consider whether you are a real estate broker moving into the property management space, or a seasoned property management company looking to make sure your DRE compliance is up to speed (now the BRE – Bureau of Real Estate).

Property manager self-audits

If your California real estate company assists property owners in managing their real estate portfolio, and to take rents and security deposits on their behalf, it might be wise to conduct a broker “self-aduit” to see where you would stand if the BRE came knocking in 2015.  Trust fund accounting is a ripe area for real estate audits and the BRE is conducting both “random audits” and “complaint-driven audits.  Either way, you want to be prepared if your property management practices come under the microscope.

We can help you with basic property management questions that may have been nagging you for some time now, such as:

1.  What is the 3-day rule?

2.  What is the 25 day rule?

3.  Which parties can serve as signors on my trust account?

4.  What does it mean to have my bank account “designated as a trust account”

5.  Are there any exceptions to the prohibition against having trust funds in an interest bearing account?

6.  What records need to be kept for proper trust fund accounting compliance with the California BRE?

7.  What is the maximum amount of broker funds that I can have in my broker trust fund bank account?

8.  What acts does the BRE believe constitutes “comingling?”

9.  What is the best way to reconcile my broker trust funds?

10.  What do I have to do legally if I have an overage in my trust fund account?

11.  Will having a shortage in my trust fund account get me into trouble?

12.  Does my property management agreement leave me open to legal liability or lawsuits?

13.  What are the top legal risk areas for BRE real estate property managers?

14.  What kinds of things can I have my unlicensed assistants do when it comes to the business or property management to avoid problems with my real estate license?

15.  Who can withdraw trust funds?

16.  What are a broker’s obligations as to properties they own and manage?

17.  What types of property management records must be kept under California B & P 10148?

18.  Can poor trust accounting lead to criminal charges such as grand theft, or embezzlement?

19.  Can I lose my NMLS mortgage lending license for trust fund accounting violations?

20.  What are the top tenant legal issues that could get me sued and will indemnification clauses save me?

These are just a sample of some of the common questions and issues we can help you resolve in a broker self-audit.  While there are other audit companies, there are few real estate compliance litigation lawyers who can help you review your business from both a compliance standpoint, and legal exposure review.

As a law firm, we are able to review your business practices, review, edits and draft real estate contracts, and help your review your property management practices.  We have helped many California real estate brokers in both self-audits, and real estate accusations, investigations, responding to subpoenas, licensing issues (ex. involving prior criminal convictions) and other areas.

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Trust fund accounting consulting

We have had many brokers come to us with serious trust fund accounting problems.  Sometimes it is on the heels of a BRE audit demand letter, and sometimes a broker just knows it’s time to take a look at the books.

We can help you review your books to make sure you are keeping the proper trust fund accounting records (whether you do this manually, or through property management software such as Buildium, APPFolio, or Property Boss).  These records include:

  • Control record – columnar record of all trust funds received and disbursed;
  • Separate beneficiary record for each property owner;
  • Monthly reconciliation records.

In some circumstances, there may be other records a property management company is required to keep to stay in compliance with the real estate law and commissioner’s regulations.  If you are not sure, you owe it to your company to find out.

Failure to be in compliance could result in:

(a) BRE cite and fine case or worse yet,

(b) a property management accusation and potential hearing with the Office of Administrative Hearings (“OAH”), where your real estate license may be subject to suspension or to be revoked and in other instances a real estate broker’s license can be converted and downgraded to a real estate “sales” license or subject to a restricted real estate license.

These things can be avoided by applying what we refer to as the “FIVE P’s” (Proper planning prevents poor performance).  Fill out the form below to get the process started, or call one of our real estate lawyers.

Trust fund compliance CA property mangager

Bonus Materials:  Property management trust fund alert.  Click on picture to see video.  Click on the Red “V’ to subscribe to our channel for FREE business and real estate law updates.

Contact a California Property Management Compliance Law Firm

We have helped real estate brokers for over a decade now in a wide variety of real estate broker law services.  From drafting and reviewing contract, to providing transactional advice, real estate zoning, financial elder cases involving real estate transactions, licensing admissions, accusations, and broker advance fee agreements, we have been there fighting for our broker clients every step of the way and we look forward to continuing to be a leader in the real estate law field.

To learn more about our legal and compliance services, or our flexible fee (including flat rate legal fees in many types of cases) contact us at (877) 276-5084 or fill out the form below to have one of our attorneys contact you.

Property management can be a fun and exciting business, but you have to do it right.  In California, there is a trend toward auditing brokers, when that happens, we want you to be ready to pout the auditor a cup of tea and ready to discuss exactly what you are doing in your business.

– Attorney Steve –

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We are a business and civil litigation firm with a focus on copyright infringement cases involving illegal movie downloads (torrent cases such as London Has Fallen and Malibu Media defense), software audits (ex. Microsoft audits, Autodesk licensing, Siemens PLM defense, SIIA, Adobe and Business Software Alliance defense) and other software vendors threatening piracy and infringement. We also handle cases involving internet law, anti-SLAPP, media law, right of publicity, trademarks & domain name infringement, and we have a niche practice area handling California BRE licensing disputes, accusations, subpoena response, statement of issues and investigations. We have offices in San Francisco, Beverly Hills, Newport Beach, San Diego & Phoenix, Arizona and accept federal copyright and trademark cases nationwide. All content on our website is general legal information only and not a substitute for legal advice, and should not be relied upon. Decisions to hire counsel should not be based on advertising alone. Blogs, videos and podcasts are authored by Steve Vondran, Esq. unless otherwise noted. We can be reached at (877) 276-5084.

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