Property Management Blog

Why You Should Check Your Property Managers License

Lidieth Macicek - Tuesday, July 26, 2022
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You're about to hand over your keys to your trusted property manager, and you're ready to lay back and relax while the manager deals with your problems. Everything from finding tenants to collecting rent is taken care of - however, are they someone you can truly trust?

Did you know someone can be an all-star property manager and still steal from you? Some people are running around with business cards and no license. Without a license, they aren't liable to maintain standards. For all you know, their names could be made up, too. Let's go over how to prevent real estate fraud from embezzlement to straight neglect. 

Why Check Your Property Manager's License

Before we begin to tell you about the different types of property management fraud you can face from licensed and unlicensed individuals, let's go over why you should check the property manager license.

It's Online and Free

According to these Fort Worth property managers you can find out if the license is valid or suspended and see the name and picture associated with it online for free. It is almost criminally negligent not to check it when it is so easy. Care about your investment and don't trust so easily. 

It Protects You From Identity Fraud

Are you 100% sure that this person is whoever they say they are? The chance may be slight, but what if it's a smooth-talking con man ready to take your money and disappear. A quick online check can save your money from being swindled away.

They Might Get Suspended

Let's say you checked the license, and everything was fine when you hired the property manager, but their license was suspended later. Anyone would do their best to keep putting bread on the table despite being barred from working.

They won't let you find out; since you vetted them once, they don't think it will happen again. However, we suggest checking the license multiple times during the contract with the property manager. Not only is it good for your peace of mind, but it also ensures that you are not using the services of a sub-par property manager. 

How a Property Manager Can Steal From You

Duties of a Property Manager

A property manager takes care of seven basic things

  • Accounting
  • Rent Collection
  • Leasing
  • Mortgage Payments
  • Repairs
  • Security Deposits
  • Inspection of the property


As you may have noticed, every one of these things involves holding your money. This means that you have to trust them. However, the world can't run on blind trust. The ACFE estimates the median loss from embezzlement to be $ 117,000. This is especially possible with commercial properties. NGB Property Management shared with us the ways they can steal from you so you can wise up and keep your money safe. 

Pocket Unreported Income

The property manager can take the money you didn't even know you were making. For example, you've noticed that there has been a unit vacant for a few months, and you call them about it. They tell you they have some prospective tenants lined up, they're working on it, and it will be filled soon. All the while, the unit is occupied, and they have been pocketing all the rent. 

A way to do that is to not update the new tenant in the system or software you use. So for several months, they get to pocket the rent until, one day, the problematic unit is finally filled.

Create Fake Invoices

Another way they can steal money from you is that they will write a check to a company that is theirs. So they will pay themselves under the guise of a shell company. 

No work was ever done, and you paid for nothing. While on paper, their registered company earned by providing you a service. 

Receive Kickbacks

We know how kickbacks work. If you trust the property manager, then this can easily happen. They'll say something costs a thousand dollars more than it did. Then they receive and pocket the kickback from the company. This is almost impossible to catch unless you are very vigilant. 

Double Check Fraud

The double-check fraud can go unnoticed for years. It's when the property manager writes a check to themselves and the utility they are paying for. They cash the check and keep the money. Then they change the name to the utility instead of their own. You will never see this unless you match the checks with the expenses on your profit and loss statements. You'll never know if your property manager has complete control of the accounting. 

How to Avoid Property Management Fraud

You can make sure that no one ever steals from you by taking the following steps:

1. Document

All your transactions are fully documented. All invoices and receipts must pass before your eyes and be checked for validity.

2. Segregate

It would help if you segregated the accounting duties, so no one person has complete control. That means one person pays and receives while someone else does the data entry. 

3. Control the Bookkeeping

You need online administrator access to any soft wares used for the bookkeeping by the property manager so that you can see everything in real-time. 

4. Surprise Visit

A little surprise visit now and then never hurt anyone. You can look at that empty unit or the new paint job. 


As much as we'd like to close our eyes and relax regarding our property once we hire someone, we can't. We must check their license, not once but several times. We must also keep a firm hand on bookkeeping to protect ourselves from fraud. 

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