To become a Property Manager in Delaware you either A. have to have a broker license or B. Have to conduct property management under restrictive guidelines. Am I considered a property manager if I am managing my own properties or am I just a really good landlord?
Good news! – the State of Delaware has not made being a “really good landlord” illegal. At least, not yet.
Yes, you are correct that to hold oneself out as a property manager in Delaware you have to have a broker license (or work under someone with a broker license), or you must limit yourself to a very narrow range of activities.
But Delaware law carves out an exception for those managing properties they own. The relevant legal language can be found in, Title 24, Chapter 29 of the Delaware Laws.
Yes, you do have to have a license to be a property manager and make a living doing property manager things for other people.
But Section 2901(e) carves out the following exceptions:
This chapter shall not apply to:
(1) Any person or a subsidiary or division thereof with common ownership or control who, as owner or lessor or buyer or lessee, performs any of the acts enumerated in this section with reference to property owned, purchased or leased by such person or a subsidiary or division thereof with common ownership or control or to the regular employee of such person, with respect to the property so owned, purchased or leased, where such acts are performed in the regular course of or as an incident to the management of such property and the investment therein; or
(2) Persons acting as attorney in fact under a duly executed power of attorney from a person engaged in a real estate transaction authorizing the final consummation by performance of any agreement of sale, leasing or exchange of real estate.
While the language isn’t exactly a model of brevity and conciseness, its meaning is nevertheless clear: The laws requiring a real estate or brokers’ license for those acting as property managers don’t apply for those persons who are managing properties they own.
Furthermore, you can delegate these activities to someone acting under a power of attorney. In practice, this isn’t necessarily limited to attorneys – you can appoint anyone you trust to act on your behalf under a power of attorney, whether they have a law license or not.
This frequently arises when a servicemember deploys overseas, for example, and grants a spouse, relative or trusted friend the right to exercise control of his or her financial affairs while deployed. For example, he could give his sister the right to withdraw money from his bank account in order to pay the rent or mortgage.
Also, people who are sick, disabled, infirm or otherwise incapable of managing their own affairs may appoint a trusted individual to act on their behalf under a power of attorney.
Something to Keep in Mind
This brings up something important for virtually all landlords: If you got sick or hurt, what would happen to your properties? Is there a plan to have someone take over and oversee those properties to maintain them for you when you hopefully recover? Or if it’s a terminal condition, is there someone appointed who will take over and manage your properties on your behalf and on behalf of your heirs for that possibly lengthy period of time between the onset of a disability and death?
One of the tools in a financial planners’ and attorney’s tool box is the so-called “springing” power of attorney. In this case, you maintain control of your own affairs, but you name someone to take over for you contingent upon your disability.
The power of attorney “springs” into action when a judge determines that you are no longer capable of managing your affairs, and it is in your best interests and secondarily in the interests of your estate and your heirs (if it looks like you’ll be checking out of the building as freight anytime soon).
Until then, you don’t have to worry about anyone interfering with your assets.
That’s an important consideration for anyone with assets that need any kind of watching or maintenance, and is generally addressed within a living will.
Usually it’s the financial planner – or your heirs – who nag you to create a living will, but you generally have to have an attorney actually write up the documents.
Note that you may appoint someone to act on your financial affairs under a durable power of attorney, and someone else to act as a power of attorney for health care. Actually, it may be a good idea to separate the two functions: You don’t want a family member to have a financial interest in pulling the plug on you, prematurely!
Writing about personal finance and investments since 1999, Jason Van Steenwyk started as a reporter with Mutual Funds Magazine and served as editor of Investors’ Digest. He now publishes feature articles in many publications including Annuity Selling Guide, Bankrate.com, and more.