3 Property Management Tips for Proper Record Keeping - Arizona REALTOR® Voice

With over 100,000 rental properties in Arizona since 2009, property management has become big business. In turn, the number of real estate professionals practicing in the area of property management appears to be at an all time high. To better monitor these licensees ,the Arizona Department of Real Estate has increased the number of property management audits it performs on an annual basis. The Department has also developed new resources that agent practicing property management can utilize to ensure their compliance with this heavily regulated field.

By way of these resources, property managers can better prepare for an audit and better understand what to expect during the audit process. While the vast majority of audited entities are in full compliance, the Department continues to construct tools that the real estate professionals can utilize to ensure that their records are complete, their accounts balanced and their files properly maintained.

With this in mind, here are 3 Property Management Tips for Proper Record Keeping:

1) Know who can sign. On Sales Trust accounts, permissible signers include the broker or licensee under the broker. For Property Management Trust accounts, permissible signers include broker, licensee or unlicensed employees of the broker.

2) The maximum fund amounts for both Sales Trust accounts and Property Management trust accounts is $3,000.00, but deposit requirements differ. For Sales Trust accounts, the deposit must be made within 24 hours with a descriptive deposit slip. For PM accounts, the deposit must be made within three days with a descriptive deposit slip.

3) Know how long to hold onto records. For Sales Trust accounts, records are required to be held for five years after the closing date. For Property Management Trust accounts, requires are only required for three years after date of execution of each document.

*Please note that trust accounts with deposits from both sales and property management follow the more stringent requirements of the sales trust account.

In order to help our members take a more pro-active stance in their property management business, the Arizona Association of REALTORS® has developed a Property Management Boot Camp This intensive, one-day course covers disclosures, tenant relations, LandLord-Tenant Act, broker responsibilities, fiduciary responsibilities, as well as loss prevention and risk management. Upcoming classes will provide agents with an opportunity to discuss real life scenarios with experienced Arizona property managers, as well as the increased confidence that when you’re faced with an ADRE audit – you will be prepared (and in compliance!).