Philly, PA - Out of town landlord MUST be repped by a broker?

Question

Hi - I know that an out-of-town owner in Philadelphia has to name a "managing agent" who lives/works in the city for licensing (L&I) requirements.

Does this mean an owner who wants to sign a lease directly can't do that? Is it only legal if the broker is the one doing the application, credit check & lease signing? Just trying to dot the "i"s here.

Thanks in advance for any help on this.

Kevin M. · Answer

@Jimmy O'Connor sure. I'll address four situations specific to Philly;

1. Property Owner who Resides in Philadelphia- you can do all your own management for properties deeded in your name. You don't need a real estate license but you must abide by fed, state, local laws. Source: PA RE Commission

2. Property Owner who Resides outside of Philadelphia (non-PHA)- you need an adult over 18 who resides within the city limits must to be designated by the owner/ operator. This person will be responsible to forward notices, orders, or summonses to the owner. They don't have to do much else besides receive and forward notices. As long as the out-of-town owner conducts frequent business in Philadelphia he/she can do all of the management activities.  Source: Rental License requirement in Philly.

3. Property Owner who Resides outside of Philadelphia (PHA/Section 8/HCV property)- you must name a Certified Authorized Agent to manage your HCV (formerly Section 8) properties. This agent must be certified by PHA. State Real Estate law would also require this agent to be licensed by the PA Real Estate Board depending on the scope of his/her agency. Source: HCV Owner Resources

4. Manager is not the Property Owner- you must be a licensed real estate professional in Pennsylvania to engage in leasing/renting property owned by another. These are licensed real estate activities in the eyes of the state. Owners should ensure the person they are empowering to rent their property is licensed. Unlicensed people should not engage in these activities for another owner to avoid fines/liability. Source: PA RE Commission

PJ M. · Answer

I'm assuming you're talking about the local agent needed for the Housing Rental license.  If that's the case then the landlord can do everything themselves.  The agent needed is only as a legal local representative for document receiving.  They don't even need to be a broker.  See point #8 on this FAQ https://business.phila.gov/media/81-900-Housing-Rental.pdf

If you're going the Section 8/Housing Voucher route, then it is different.  If you live more than 25 miles  outside the city you need to have a certified rental agent or property manager that is local to the property.  See Note at the bottom of this page.  http://www.pha.phila.gov/housing/housing-choice-voucher/landlord-information/how-to-become-an-hcv-landlord.aspx

Tarpan Patel · Answer

@PJ M. Do you know if there are any companies that offer a service to be your “local agent”? I am located in DE so only a short drive over and do frequent Philly quite often. I see the FAQ you posted earlier says the local agent must have a Philadelphia address that they regularly use. Would it suffice to setup a local P.O. Box in my name since I am there often?

Allie Kudrna · Answer

@Tarpan Patel Did you ever get an answer on this? I’m running into the same issue when applying for a rental license. Is there anyway around needing an agent for notices? If not, are there local services for this? Thank you!

Jimmy O'Connor · Answer

@Kevin M. can you weigh in on this?

Steve Morris · Answer

I find that hard to believe.  If you're an agent representing the principal, sure you need to meet licensing requirements.

If you're the principal, you can negotiate your own lease without an agent.  I assume the lease has to meet some legal mins, but that has nothing to do with an agent.

PJ M. · Answer

@Sara J. that is correct unless you are accepting housing vouchers (part of the Section 8 program).

Sara J. · Answer

PJ - Thanks for the reply & the link. If I understand you correctly, the requirement for an agent is ONLY for the Housing Rental license. So an out-of-town landlord doesn't NEED to use an in-town broker to screen tenants & sign leases; she should be able to do those things herself without stepping afoul of Philadelphia law. Is that right? Thank you.

Sara J. · Answer

@Nathan G, thanks for the reply. Different motivation in this case.

I'm doing research for a landlord in Philadelphia whose outgoing tenant referred a friend. Since she has a new tenant in sight, the landlord would like to avoid the broker fee if possible & learn to do tenant checks/leases herself. She's been using a broker to list, show & sign the tenants (but does property maintainance herself).

She just isn't sure if it's illegal to do it without the broker, since she isn't resident/working in Philadelphia. She's technically an out-of-town owner but not far from the city, so conceivably could commute into Philly occasionally for new tenant stuff.

Nathan Gesner · Answer

I don't know the laws but my question is, why would the owner want to sign it? Do you think it makes it more enforceable? Does not signing it excuse the owner from liability?

The answer in both cases is "no" because the agent is acting on behalf of the owner. They can sign on behalf of the owner. When they make a mistake or break the law, it is on behalf of the owner, whether you've signed the document or not. Every action they take is on your behalf so you remain fully liable and the lease is fully enforceable without your signature. This assumes you have a written management agreement with the agent.

Philly, PA - Out of town landlord MUST be repped by a broker?

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