NYARM urging support for licensing legislation.

Earlier this year, State Senator Carl Kruger (D-Brooklyn) spoke at a NYARM monthly meeting about "Bill S279," the legislation he wrote that mandates the licensing of property managers in New York State. His message was well received and the response from those attending the meeting at Tavern on the Green was overwhelmingly enthusiastic.

Similar in concept to New York State requirements for licensing real estate sales agents and brokers, the legislation establishes required curriculum, qualification testing and continuing education standards, as well as recommending a standard for the number of hours required for study.

Unlike the brokers' requirements for licensing, however, the curriculum would be relevant to the responsibilities of property managers, dealing with such subjects as the daily operations of a property, the physical plant, maintaining a building's fiscal health, local law compliance, etc.

The Senator also made reference to the challenges he faces with this controversial legislation. Despite his ability to locate a sponsor, Frank Seddio (D-Brooklyn), for the companion bill in the State Assembly, similar efforts for this type of legislation have been tabled in the past until they disappeared. Nevertheless, Senator Kruger maintains a positive attitude, "I believe with successful debate, and if we are able to articulate a position that shows our bill has merit, we can win, we can get the bill approved. But the legislative process dictates that we have to get it out of committee."

He urged the audience to write their local representatives, as well as Senator James Lack, chair of the Judiciary Committee, and Senator Joseph Bruno, majority leader of the New York State Senate, requesting the release of the Kruger Bill. Senator Kruger believes his legislation is vital enough to have invited 36 Republican colleagues to review the bill and determine its merits. He has even offered to withdraw his name in favor of a majority Republican sponsor in order to mitigate partisanship and achieve its passing.

"Let's finally put the indicia of professionalism on property managers. We stack educational qualifications and, most important, integrity on the table, right up front," emphasized the Senator.

In alluding to the activities of the District Attorney's office and the numerous indictments in the management industry, Senator Kruger explained that a law governing the licensing of real estate managers would raise the bar for acceptable standards in the profession. "There will be a licensing process that says if any individual or group of individuals is found to somehow or other disturb or break the guidelines that are established under this legislation, then the Secretary of State will be able to lift the individual's license. There could be several penalties, if need be, and there would even be a prescription for civil adjudication. And with that, the removal of that person's license and the barring of them ever participating as a licensed property manager."

The Senator was emphatic about his respect for the profession of residential property management. He pointed out that his bill reinforces professionalism in the industry, and supports those who are dedicated to the proper and lawful execution of management duties.

The Senator indicated that 2001 could be a "threshold year," and said he was confident that this important legislation would pass. He rallied the audience with a spirited pep talk, assuring them that, with ongoing lobbying efforts, the passage of the bill was imminent. (The bill is modeled after the NYARM/Halperin bill of the late 1980s.)

Although the arguments against licensing tend to be weak, the groups against the legislation are powerful. Many of them believe licensing is redundant because there is already mandatory licensing for brokers. However, the required courses for sales agents barely touch upon the duties of property managers; only going so far as addressing apartment sales and closings. Courses in the financial profiles of a property, local law compliance and physical plant are not taught in any of the schools hosting brokers' programs.

Another argument against this platform is that licensed property managers will demand higher salaries. But historically, professional salaries have been commensurate with market rates, which fluctuate depending upon the national and local economies. In other words, it's more of a scare tactic aimed at owners than an effective argument.

Self-managing owners of small properties have voiced understandable concerns about licensing, because of the potential cost of the classes and licenses. However, most owner/managers are exempt from licensing requirements, so rarely will it ever become an issue for them.

It is an unfortunate reality that, despite the fact that the vast majority of property managers are hardworking and honest professionals, our reputation as an industry has been repeatedly marred. From the perspective of our clients, licensing assures them that their managers are trained and knowledgeable about a wide range of subjects pertaining to their properties. It's a win-win situation for property managers because they can achieve an educational foundation and credibility at the same time. Considering that almost every other professional performing work in a building holds licenses -- from the superintendent to the plumber -- it is amazing that there are no professional or educational criteria for the managers in charge.

Let us make this the year in which we finally rally together as real estate professionals and help this very important legislation become law.