Why you can’t manage rentals in B.C. without a license
Kathy Bakker was simply providing a service.
The Kamloops woman had worked for a property manager before 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 soon booked a 40-unit apartment building to act as property manager.
There was just one problem — you need to be licensed for this work under the Real Estate Services Act. The B.C. Financial Services Authority, essentially the province’s financial police with a growing portfolio, was able to shut her down.
That might seem heavy-handed; she wasn’t selling real estate or dispensing shares in public companies, she was managing building maintenance and finding tenants. But some property managers also have access to rent money, maintenance reserves and other accounts held by strata councils for future upkeep. There were no allegations Bakker did anything untoward with it, but she potentially had access to $50,000 per month in rent.
When these relationships go bad, it’s disastrous for owners but also for the industry itself if feelings of undue risk cause people to shy away. Property managers have required licensing under strict regulation since 1994.
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Michael Noseworthy is the senior vice president of compliance and market conduct with the Financial Services Authority which, if it does its job, should remove that feeling of undue risk.
"Overall I think the fact we are here and the fact we (investigate and take regulatory action) should give people confidence in the sector and in the high standards of the sector because the regulators here take the appropriate action in individual cases where the standards are not met,” he said.
In 2000, for one example, Pat Derrick Property Management had access to funds for 1,048 strata properties in Kelowna and mostly Penticton. By the time financial regulators caught up to them, $1.4 million was missing.
When property managers are licensed, investigators know how to find them and can take enforcement action. Because they are licensed, there’s also an expectation they know the laws.
While not speaking about Bakker's case specifically, he said managing properties without a license is “something we take very seriously, something that’s prohibited by the law. Anytime we become aware of it happening we do fully investigate and apply the law."
Nearly anything to do with money is B.C. is heavily regulated, and while that may seem overly complicated for people like Bakker to find their place, he says organizations like the B.C. Financial Services Authority should make it simpler.
“The main reason you need a license is because it’s the law, and the law says you need a license,” he says. "We know people out there — consumers, people in the public — there is information overload out there with multiple agencies and laws and regulations. It can be very confusing but it doesn’t have to be up to consumers to know all of this stuff. That is why we are here.”
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You don’t need to know everything, but calling his office is the best way to figure out what you can and cannot do in real estate.
“We have a team of amazing people who come to work everyday with the goal of protecting the public, whose job it is to answer those questions,” he said. “We can tell you whether you need a license or not.”
A property management license is required for anybody renting out dwellings. There are a few exceptions – nobody needs a license to manage units that they own, and there are some exemptions for caregivers.
Anybody who believes their property manager is acting offside the law can alert the Authority, and renters can see whether their property manager is licensed on the website. Noseworthy reminds renters 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 through UBC and tuition costs $1,150. There are 27 chapters of content and applicants have one year to complete assignments.
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