What are Unlicensed property manager restrictions?

Question

I have a question for my fellow biggerpocketers

Being the great entrepreneur I am (jk), I am looking to start a property management company. Ive had some pretty dumb ideas in the past that didn't work out,  and im wondering if this is one of them (considering I don't have a salesperson or brokers license).

I reside in an area where summer homes are popular. Airbnb is also everywhere. I would like to offer my services to manage these homes, whether it is just property maintenance, winterizing, common repairs, cleaning, etc.

But am I capable of drafting up leases and finding renters for the Airbnb customers? Would I be legal if It were signed by the owner of the property?

Chris London · Answer

@Brian Ellis you mentioned: property maintenance, winterizing, common repairs, cleaning, etc.

You might talk to the local PM company and offer these maintenance services and become a vendor. Great way to get a foot in the door. You can also talk to them about becoming a PM assistant or office admin. Work on your license at the same time and eventually work up to getting your BIC and firm license.

Drew Sygit · Answer

@Brian Ellis typically, if a state requires a license, it applies to everything you've mentioned.

To sum it up - anything you do regarding properties that YOU DO NOT OWN, you need a license to do it.

Kevin Sobilo · Answer

If you read that carefully, the exemption is if your MAIN JOB is to manage the property doing jobs such as handyman work, lawn care, etc etc etc. If that is your MAIN function, you are allowed to handle the leasing as "incidental" work along with that. Most people starting a property management company want the focus of their work to be the real estate work not the handyman work.

Also, getting licensed protects you by giving you education about laws that could come back to bite you in the a@@ and also insurance that will protect you because ignorance of those laws very well may see you get sued.

David M. · Answer

@Brian Ellis

I guess I am not sure what you are trying to do for a business.  You are specifically talking about AirBnB.  Is that through the AirBnB site or short term rentals, in general?

If Airbnb, they have a system where you can co-host, effective be a property manager, type person.  What aspect are you changing/doing better?

If doing a short term rental, I guess you'd have to see what other companies such as AirBnB have put in place to allow them to do it.

As soon as you are helping somebody else look for a real estate related activity, its brokering of real estate and regulated in every state.  The MA statute you copied seems to say to me that the property owner can have employees broker their OWN property.  That's how, for example, large companies use their employees to do some real estate stuff --- similar to a homeowner, a business owning a property doesn't need licensure to sell or lease their own property.

If you want to do the actual repairs/maintenance as mentioned, then you need to follow your state's licensure or registration requirements.  In NJ, plumbers and electricians needs to be licensed.  A Home Improvement Contractor registration is required for everything else --- when  you are working on somebody else's property for money.

Quite honestly, in my view anything beyond secretarial/administrative oversight of a property tends to require some sort of licensure/registration.  Definitely keep researching and/or find some qualified professionals to figure out how it works in your locality of interest.

Jenn Biseinere · Answer

Hi Brian- according to the Buildup website Although renting and leasing activities are considered real estate activities undertaken by a real estate broker, if those activities are incidental to his or her involvement as a property manager, a real estate broker license is not required in MA. Furthermore, Airbnb allows for co-hosts through their platform where you can manage other airbnb's for their owners without a property management license.

Brian Ellis · Answer

@Chris London thank you, that isn't a bad idea.

@Charlie MacPherson @Drew Sygit

I found the following:

In Massachusetts, a broker's license is not required for:  Employees of real estate owners if the employees are performing the acts of a real estate broker or salesman for the subject property and if these acts are performed in the regular course of, or incident to, the management of the property.  Any management agent (or regular employees of the agent acting on the agent's behalf in the regular course of business) while acting under a contact with a real estate owner. Massachusetts does not have other licensing requirements for property managers. (Mass. Gen. Laws ch. 112, § 87QQ.)

Brian Ellis · Answer

Through all the research ive done, simply managing someone elses property isn't illegal. Im trying to find out where the fine line is. I just cant handle peoples money is the impression I am getting?

Brian Ellis · Answer

Thanks for the response, Charlie.

My question is: what exactly is illegal in terms of being unlicensed? Would it just be real estate transactions? Am I able to show the property, screen the tenant and manage it while having the owner do the lease signing?

Charlie MacPherson · Answer

@Brian Ellis Property managers in Mass are required by the state to be licensed.  You don't want to start off a new venture having to dodge the law.  One complaint and things will get ugly.

Or you could come to Maine where property managers, home inspectors and general contractors are all not required to be licensed.

What are Unlicensed property manager restrictions?

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