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Many of us have had at least one bad experience renting a home. Whether this was because of the owner, and property manager, or a roommate, as tenants we often develop prejudices to prevent ourselves from being taken advantage of again. This article goes over the top 3 reasons to rent from a property manager. 

top reason to go thru a property manager

Financial Stability

While leasing a property in Honolulu or on Oahu isn’t quite the same as purchasing a home, you usually have to put down some form of security deposit. Knowing where and how the deposit is stored is important if you are looking to get that back in the end. If held by a property manager, most states require that this is held in a separate FDIC insured trust account which they must keep records of for a specified period of time. This helps ensure that your deposit is held and not spent. Of course there are no guarantees if it’s a small property management firm or a single manager, the amount of risk is smaller when compared to renting from an owner directly.

When working with the owner directly, you are not awarded any assurances. While they have to adhere to the laws as the manager, the owner has no specific requirements of how or where the security deposit is held.

Know the laws

In most states, a property manager must be a licensed real estate agent if they are managing single family homes, condos, and town homes. To obtain a real estate license, the agent must meet education requirements and pass an exam prepared by the state. By obtaining a license, the agent is certified by the state of Hawaii indicating that they have knowledge of real estate laws and general practices. This background helps protect us as tenants because the manager knows that they are required to complete repairs within a certain period of time, refund deposits, etc. Failure to do so can result in fines and even the loss of their license. If a manager is not conducting themselves accordingly, you as a tenant can file a complaint with the state of Hawaii and the Honolulu Board of Realtors who will then investigate your claims.

Apartment communities are slightly different in that there is usually a single investor who owns the property (whether it’s a sole proprietor, LLC, corporation, trust, or legal partnership). Since there is a single owner, most states allow them to operate without a real estate license. However, they still have to adhere to state landlord/tenant laws. The investor’s goal is to generate income off the property and one thing that would deter this would be needless legal expenses resulting from lawsuits. As a result, most apartment communities are managed by property management companies or an experienced property manager who is familiar with local laws and practices adding a level of assurance to both the tenant and owner.

When working with an owner directly, there are no educational or licensing requirements thus they are less likely to know the laws.

Held to higher standard

As a professional and expert, property managers in Hawaii are held to a higher standard. It is expected that they are versed with local laws such as landlord/tenant acts, contracting laws, building/health and safety laws, fair housing practices, how to draft contracts, etc. If a manager acts without knowing the applicable laws, this is often viewed as negligent because as an expert in property management, they should have known. They have to be extra careful to ensure that they are compliant with local laws because the courts often take a dim view when a manager does not know what they should know.

Many licensed agents are also a member of the Realtor Associations, which is an independent organization such as the AARP which grants its members a variety of different tools and benefits. To become a member, the agent must take an oath to adhere to the Realtor Code of Ethics. Essentially, most licensed agents have to adhered to both state laws and the code of ethics. Usually if they violate one, they also violate the other which means not only can you file a complaint with the state, but also the local Association of Realtors.

Click here to obtain a copy of the Realtor Code of Ethics, revised January 1, 2013

When working with the owner directly, they are often given some allowance as they are like you and I, not having full knowledge of the law.

Final thoughts

There is always risk whenever you are renting out someone else’s property and going through a property manager does not guarantee success. However, going through a professional offers advantages because to be a professional, they take on more responsibility and liability. In addition, many agents rely on referrals to maintain and grow their business. Having a bad reputation makes it very difficult to develop a client base. While most agents are looking to attract property owners, if a manager has a lot of bad reviews or a poor reputation, it will make it harder for them to attract and retain business when there are other agents out there who have good reviews.


Top 3 Reasons To Rent From A Property Manager - by