Property Management Company

[Danielle Levins]

Hey BP!! I have a real concern that hopefully you all can help me with. What are the requirements to start a property management company in the State of Florida?? I was told by several people that I needed a Broker's license but this morning I called the Florida Department of Professional Business Regulations and was told that I that didn't regulate property management companies. I currently hold a Sales Associate license and was told that she could only tell me about that sort of license. She was unable to put me in contact with the appropriate authority. So my question is, do I or do I NOT need a Broker's license to operate a property management company that is paid on a salary basis? All advice welcome!!!

[Benjamin Pekarek]

Hello Danielle!

Per Florida law, if you are operating a commission based property management company, you are required to have one of two things - have a broker of record that signs off on everything you do (this runs between a percentage of the house, and $500 - $1,000 per month), or be the broker of record yourself.

Your other option is to run a flat fee management company. (Just inserting basic numbers as an example) You charge $50 for leasing, and $50 per month for accounting. Doesn't matter if you collect rent that month or not, they're still going to get charged. Why? If they're not charged a flat, guaranteed rate, then your compensation is performance based...ie, a commission.

The only number I truly gave is the $50 for leasing - Florida statutes state that a person not using their license, or an unlicensed individual can receive no more than $50 as compensation for tenant procurement - and the apartment industry breaks this law ALL the time with PM bonuses...trust me, you don't want to go down that road!

When you have a flat fee PM company, most owners aren't willing to pay you a guaranteed salary, that's the biggest reason I went and got my broket's license - I couldn't get property owners to sign the guaranteed fee management agreement!

Good luck!!

-Ben