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ALERT: Threat Materializes to PA Community Association Management Companies

by Marshal Granor, Esq., CCAL

As a member of CAI’s Pennsylvania Legislative Action Committee and Past Chair of the Pennsylvania Bar Association’s Real Property, Probate, and Trust Law Section, I receive a lot of information about pending legislation and court cases that affect the community association management business and our association clients.

This letter contains CRITICAL INFORMATION for all Pennsylvania community association management companies.

A community association manager is being prosecuted by the Pennsylvania Real Estate Commission (the “REC”) for practicing “property management” without a real estate broker’s license. This is extremely important because REC’s argument is that they are empowered to oversee “property management.” Therefore, REC believes that they must regulate community association management companies. The manager in question has argued that his company does not handle rentals, landlords, tenants, or leases; therefore, REC has no authority here. Current law and regulations do not define what “property management” is and REC’s argument is disconcerting.

A hearing will be held soon by the REC. If they find the manager guilty of performing real estate tasks without a broker’s license, there will be fines and sanctions. I believe this would also open the door to additional prosecutions of community association management firms throughout the Commonwealth of Pennsylvania. The alternative of conceding to the REC and getting a real estate brokers license is expensive and time consuming.

For a PA Broker’s license, you need to:

  1. Be 21 or older and a high school graduate
  2. Complete 16 credits (240 hours) of approved broker real estate education
  3. Have worked three (3) years as a licensed real estate salesperson
  4. Document 200 points earned by specific real estate sales and rental experience (selling, listing, renting, etc.)
  5. Pass the Brokers’ license exam

Obviously, unless you or someone in your organization already has a real estate broker’s license and uses it for your CIOC management, to get a Broker’s license at the very least would take four to five years.

Please contact CAI immediately if you are concerned about becoming a target of the next prosecution.

The CAI PA LAC is working on a strategy to deal with this issue and will be communicating more information and seeking your involvement as we move forward.

Marshal Granor, Esq., CCAL practices law at Granor & Granor, PC, concentrating in real estate transactions
(sales and leasing) and community association law. He was a principal author of Pennsylvania’s Uniform Planned Community Act, and is a member of the Montgomery, Pennsylvania and American Bar Associations. He serves as Chair of the Pennsylvania Bar Association’s Section on Real Property, Probate and Trust Law, and served as Executive Editor of the RPPT Section Newsletter for six years. Marshal is a member of Community Associations Institute’s Pennsylvania Legal Action Committee (PA LAC), and is admitted to the prestigious College of Community Association Lawyers. He can be reached via email at: marshal@granorprice.com.