Do Property Managers Require Certain Licenses?

If you are planning on hiring a property manager or want to become one yourself, then it is important to ensure that all of the correct paperwork is taken care of.  The big question that most people have is whether or not property managers require certain licenses.  Unfortunately, there isn’t a cut and dry answer to this question.  There are a variety of factors that can help determine the answer, plus there may still be some dispute over what is correct.  Here is a closer look at some of variables to consider when trying to find out whether or not property managers require certain licenses.

The State

There is no nationwide law that addresses this subject, so you will need to look into state laws.  Since many property management companies are involved with real estate ventures as well, many states will require a real estate license.  Once you look into state laws, you may still have questions.  For example, some websites state that if you are in California, then you must have a real estate license, while others will state that you only need a real estate license if the company is also associated with a real estate company.  Other states are much clearer.  For example, in Ohio a real estate license is required to engage in any property management activities.  It also requires property management services to be provided through real estate brokers.

There are potentially other licenses that may be needed as well.  For example, in Ohio a property manager that handles payments such as rent or security deposits requires a license simply to handle those funds.  Additionally, a real estate brokerage must have a separate property management trust account for every property that the manage.  Only one trust is needed per property owner, so if a management firm was overseeing 5 properties for one person, only one trust would be required.

In General, Do Property Managers Require Certain Licenses?

While the details will vary from state to state, there are some generalities that seem fairly consistent across the country.  The first is that property management companies will need some form of license, normally a real estate brokers license, if they are listing properties, collecting rent, or dealing with the lease negotiation and enforcement.  Again, every state is a little bit different, so check your local resources.

Do Property Managers Require Certain Licenses If They Own The Property?

What about property owners who will be managing their own properties?  In most states, if you are managing your own property, you are not required to have any type of real estate license.  At the same time, you may be required to have a business license in order to rent out any space, even in your own home.  Additionally, if you are not living near your rental property, such as in a different state or even a different county, then local laws may require you to hire a property management company.

What About Association Managers?

If you are a property manager that only deals with association management, then you normally will not need to have any licenses.  The only exception is that some states will require you to register with the state, which is little more than filling out some paperwork.


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