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Do you have to be a licensed Broker to manage own property in NC

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Robert Carter

Charlotte, North Carolina

Jun 06 '12, 07:24 AM


I am in NC and been facing a delima and conflicting information. Me and my wife have several investment properties in our personal names. "I" myself am incorporated in NC as an LLC properies management. My wife is not associated as a member to the LLC.

I realize you do not need to be licensed to lease out or rent out your own property, however, being that the properties are not listed in the LLC's names and my wife is not an agent or employee of the LLC, I should have a brokers license to conduct such business? versus if the properties were listed in the LLC's Name and me the owner of the LLC.

I have received conflicting information. Even called the NC real estate commission and they were not exactly sure!!!!!!!

anyone with information on this , it is greatly appreciated.
thanks



Bill Gulley

Real Estate Investor from Springfield, Missouri

Jun 06 '12, 08:54 AM


IMO, no, but why do you have an LLC?

Usually any entity formed to do property management needs a broker to conduct business, unless it only manages properties owned.

I don't see your LLC doing any management I see you doing it for your own property. If you are running management fees through your LLC and deducting operating expenses and allowing profits to flow through to you then I can see this in a different light. Technically your LLC is leasing properties not owned by the LLC and if not owned, then it's for others so alicense would be necessary.

I don't see any benefit of running a management fee through the LLC except to generate income that might be used to cover expenses of other business ventures. And I can also see that as a sham transaction tax wise if you are not operating at arm's length.

But it looks to me like you are simply involved in two seperate functions that you are trying to tie together, you manage the LLC as well as your properties and you should probably keep the activities seperate and not comingle funds or business. Doing so also seems to place the ligetimacy of you LLC at risk if you are only conducting business for your privately held properties.

Put the properties in the LLC, you won't need a license or stop claiming that your LLC manages your own properties and you won't need a license. If your LLC conducts management functions for others then you need a license.



Dave M.

Residential Landlord from Chicago, Illinois

Jun 06 '12, 08:39 PM


'Do you have to be a licensed Broker to manage own property in NC'

simple answer: NO

Your post is a little confusing:
-You own the properties in your name, you manage them
(what does the LLC have to do with this?)



Robert Carter

Charlotte, North Carolina

Jun 07 '12, 07:26 AM


Not exactly sure how it's "confusing". And I found out by calling the North Carolina commission and at first the rep wasnt sure either, but she later had a legal representative call me back to clarify and stated that yes, one should have a brokers license if conducting business as a property management company. She stated if the properties were listed in my LLC name, then I would not have to be a broker, however, since the deeds are in my wifes and my personal name and not affiliated with the LLC property management, im STILL managing others properties, ie "wife"



Bill Gulley

Real Estate Investor from Springfield, Missouri

Jun 07 '12, 09:25 AM


Originally posted by Bill Gulley:
IMO, no, but why do you have an LLC?

Usually any entity formed to do property management needs a broker to conduct business, unless it only manages properties owned.

Technically your LLC is leasing properties not owned by the LLC and if not owned, then it's for others so alicense would be necessary.

Put the properties in the LLC, you won't need a license or stop claiming that your LLC manages your own properties and you won't need a license. If your LLC conducts management functions for others then you need a license.

Which is what I was thinking too. Move the properties or stop running the management through the LLC. Good luck....

i



Linda Wright

Property Manager from Tampa, Florida

Jun 07 '12, 10:18 AM


You own the property- the property you own is in your name. No, you don't have to be a licensed broker.



Bill Gulley

Real Estate Investor from Springfield, Missouri

Jun 07 '12, 10:26 AM


Originally posted by Linda Wright:
You own the property- the property you own is in your name. No, you don't have to be a licensed broker.

Welcome to BP Linda!

The problem is that the LLC is a seperate living entity, it's not the owner of the property and it's acting to manage property it does not own. They need to go one direction or the other but not the way they are going now.

What they are doing now really muddies the waters in other issues as well.

Good luck



Robert Carter

Charlotte, North Carolina

Jun 07 '12, 10:49 AM


And I am willing to do what I need to do. Thus me wanting to make sure of things.. We have several investment properties we rent out and A tenant brought it to my attention. He makes the rent payments out to the _________ proerties LLC, versus my name. The tenant stated prior rental, a lady he rented from was a LLC proerty management, and her deeded property I leased was in the LLC name as the owner of real property. I Just want to have my ducks in order. A couple of the investment properties are in the sole name of my wife but I manage those as well so again, trying to figure out the rules. and all the information has been helpful.



Bryan A. Donor

Real Estate Investor from Charlotte, North Carolina

Jun 07 '12, 11:14 PM


OK, i'm trying to wrap my head around this one..and it's late, so forgive me if i screw it up.....but if a property is in your personal name, you can manage it..not sure what the point of having an LLC is at that stage though for managing..why not put property in LLC..then you must be member of LLC to manage it from what i understand..curious what attorney advised you, or what was their reasoning, for having a management LLC but no property LLC..tenant lawsuits will be brought against property owner, so it seems you're still at risk



Bryan A., Carolinas Revitalization, LLC
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Robert Carter

Charlotte, North Carolina

Jun 08 '12, 05:41 AM


the LLC is in the of "Carter Properties, LLC" ( nature of business: managing properties).



Dave M.

Residential Landlord from Chicago, Illinois

Jun 08 '12, 08:59 AM


Have you tried calling a few RE attorneys in Charlotte? You may be able to get your question answered gratis if its a straightforward situation.



Bill Gulley

Real Estate Investor from Springfield, Missouri

Jun 08 '12, 09:01 AM


Robert, I'd also suggest you amend your incorporation filing and operating agreement to provide a much broader scope of business to be conducted.

While that old catch-all phrase, "to do all things necessary and/or related to" really doesn't cut it in RE. To simply say manage is a broad scope of business but is also rather limiting as you may want to buy and immediatley sell a property sometime, that may not meet the scope of business to be conducted and thereby lose the benifits of your LLC if something blows up in such a transaction.

Just saying, I prefer to cover the bases specifically, buy, sell, trade, exchange, construct, repair, improve, demolish, develope, lease, sub-let and manage, borrow, advance or lend money and to do all other things necessary and/or related thereto as allowed by law.

Doesn't mean you must do those things, just that if you do, it is within the scope of your regular business to be conducted.



Bill Gulley

Real Estate Investor from Springfield, Missouri

Jun 08 '12, 09:14 AM


Sorry, but you might also get by by leasing the property to your llc specifically to sub-let and then your llc would have a leasehold interest in the property and sub-let and manage. Probably better to title in the llc though as you will personally responsible if it is in your name as Bryan points out.



Chris Martin

Real Estate Investor from Holly Springs, North Carolina

Feb 25, 02:41 PM


I know, this is an old topic.

Regarding "I have received conflicting information. Even called the NC real estate commission and they were not exactly sure!!!!!!!"
That is not a surprise. Generally a NC REC person will say you need to be licensed even when you don't. Ditto with "...she later had a legal representative call me back to clarify and stated that yes, one should have a brokers license if conducting business as a property management company."

It all boils down to how much you are paying the LLC that manages your rentals. If $0, then your LLC is not technically brokering because there is no "compensation or valuable consideration or promise thereof" in this relationship.

The above is my opinion, based on NC statute. I am not an attorney and this post is not to be construed as legal advice. In small claims cases, I have not had a judge make an issue of my MM-LLC managing property owned by our members. If the judge were to ask, then I would point out there is no compensation, therefor no brokerage taking place.



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