Key Points:
- Property Managers must be licensed in Colorado
- Property Managers must carry specific types of insurance
- Landlords should confirm the license status of any property manager before working with them
If you are a real estate investor considering hiring a property manager to manage your home, is that manager required to be licensed in Colorado? The very easy answer is YES.
The state of Colorado has several requirements that must be fulfilled before they will grant a real estate license. The applicant for a license must meet the following requirements:
- 168 hours of education
- Passing an exam
- Background check
- Insurance requirements
The reasoning for Property Managers to have to license in Colorado includes:
1. To Protect the consumer:
If a tenant is going to rent a property there will be a lot of legal protection that is given by the state of Colorado. This is upheld by the property manager with regulating the rules for both parties, owners, and tenants.
2. To Ensure Proper Trust Accounting:
The real estate commission and the department of regulatory agencies will perform recurring audits on property management companies and look into their trust accounting. (Trust accounting is the account where a company holds other people's money). For example, property management companies will hold their tenant's security deposits in a trust account.
3. To Ensure Laws Are Followed:
Colorado has many rules and regulations that govern what property managers may and may not do in relation to their property and their tenants. Most of these rules apply equally to property owners even when they self-manage a property. For example, as an owner or a property manager, you must return a tenant's security deposit within 30 days of moveout. (unless you state 60 days in your lease. If you miss the deadline you can be liable for up to 3 times the deposit amount).
How do I know if my Property Manager is Licensed?
The department of regulatory agencies makes it very easy to look up if someone has a current real estate license as well as the status of that license. Just enter the agent's first and last name in the field, after you run a search you should be provided with their name, license number, license status, issue date, expiration date, name of the current company, phone number, etc.
https://apps.colorado.gov/dre/licensing/Lookup/LicenseLookup.aspx
When hiring a property manager, you should pay special attention to the “disciplinary action field” as stated by DORA. This should provide information regarding disciplinary action taken regarding the property manager or their company.
Other sources to consider when hiring a property manager in Denver:
- BBB (Better Business Bureau) reviews
- Google Reviews
- If the property management company belongs to NARPM (National Association of Residential Property Managers)
When hiring a property manager, be cautious and research the company before you hire them.
The link below offers guidance on what parts of a property management agreement you should ask the property manager about before you work with them.
https://www.rentgrace.com/property-management-agreement
We at Grace Property Management are always ready and willing to help in any way we can. Contact us at www.rentgrace.com or 303-255-1990.
