Kathy Bakker was simply providing a service.
The Kamloops woman had previously worked for a property manager and knew the ropes, so when she left the company she had the know-how to do the job. During the pandemic, when travel was restricted, she said she agreed to help vet tenants for landlord clients through her cleaning business.
As her business grew, she quickly booked a 40-unit building to act as property manager.
There was only one problem – you must be licensed for this work under the Property Services Act. The BC Financial Services Authority, essentially the province’s financial police with a growing portfolio, managed to shut it down.
It may seem heavy; it did not sell real estate or distribute shares in public companies, it managed the maintenance of the buildings and the search for tenants. But some property managers also have access to rent money, maintenance reserves and other accounts held by condo boards for future maintenance. There was no allegation that Bakker did anything untoward with it, but she potentially had access to $50,000 a month in rent.
When these relationships go wrong, it’s disastrous for the owners but also for the industry itself if feelings of undue risk cause people to walk away. Property managers have required a license under strict regulations since 1994.
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Michael Noseworthy is the senior vice-president of compliance and market conduct at the Financial Services Authority which, if it does its job, should remove this sense of undue risk.
“Overall, I think the fact that we are here and the fact that we (investigating and taking regulatory action) should give people confidence in the industry and in the high standards of the industry, because regulators here take the appropriate measures in individual cases where the standards are not met,” he said.
In 2000, for example, Pat Derrick Property Management had access to funds for 1,048 condominium properties in Kelowna and primarily in Penticton. By the time financial regulators caught up with them, they were $1.4 million short.
When property managers are licensed, investigators know how to find them and can take enforcement action. Because they are licensed, they are also expected to know the laws.
Without specifically addressing Bakker’s case, he said running properties without a license is “something we take very seriously, something that’s prohibited by law.” Whenever we become aware of it, we will fully investigate and enforce the law.”
Almost everything to do with money is that British Columbia is heavily regulated, and while it might seem too complicated for people like Bakker to find their footing, he says organizations like the BC Financial Services Authority should simplify things.
“The main reason you need a permit is because it’s the law, and the law says you need a permit,” he says. “We know people out there – consumers, people in the public – there’s an information overload with multiple agencies and laws and regulations. It can be very confusing, but it’s not for consumers to know. all of that. . That’s why we’re here.”
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You don’t need to know everything, but calling his office is the best way to understand what you can and can’t do in real estate.
“We have an incredible team of people who come to work every day to protect the public, whose job it is to answer these questions,” he said. “We can tell you whether you need a license or not.”
A property management license is required for anyone renting accommodation. There are some exceptions – no one needs a license to manage units they own, and there are exemptions for carers.
Anyone who thinks their property manager is acting outside the law can alert the Authority, and tenants can see if their property manager is licensed on the website. Noseworthy reminds tenants that they can complain about property managers, whether or not they are licensed. Concerns can be reported here.
The course to become a property manager is offered remotely by UBC and the tuition costs $1,150. There are 27 content chapters and applicants have one year to complete the assignments.
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