Can a non-owner lease and property manage?

Question

I'm in Oklahoma. My mother-in-law fully owns around 30 properties which I and my wife have been leasing and managing for a couple of years after my FIL's death. I was recently told that the laws say that ONLY the owner of the property may lease and property manage. If she want's anybody else to do that work, they have to have a realtor license. My MIL is unable to do any of this because of health, and she doesn't want to pay a property management company.

Is what I was told true?

John Thedford · Answer

the solution is to take a 1% ownership in each of the properties and then you can manage as an owner

Rhett Tullis · Answer

@Jim Bentley if you are an employee of the owner ie she pays you hourly to manage the homes you are fine.  many reit's here in town own hundreds of rentals and hire unlicensed folks to manage their homes for them as employees.  take a look at the orec regulations or give them a call if you like.

Steve Vaughan · Answer

I may have been a 'consultant' for another's property before.

To fully be classified as a 'property manager' which requires a license if you don't have an ownership interest, a few key things need to not be among your services rendered.

I didn't place anybody without owner approval.  I didn't remove anybody without owner approval.  I didn't hold deposits, which need to be in a trust acct anyway in my state.

Basically the owner placed people, removed people and handled security deposits.  It's been a while and I'm just speaking in broad strokes, but that's something I may have done to help others before.

If your mother gave you an option to buy these properties, that may satisfy the ownership interest requirement.  Look into your state licensing laws @Jim Bentley.

Casey Gray · Answer

@Jim Bentley

Wow. I am astounded by the number of people giving legal advice about this issue who 1) do not live in Oklahoma and are not familiar with Oklahoma's laws and 2) are not attorneys. Be careful who you accept advice from...

Here is the law from an Oklahoma Lawyer:

59 OS § 858-301 states, “It shall be unlawful for any person to act as a real estate licensee, or to hold himself or herself out as such, unless the person shall have been licensed to do so under the Oklahoma Real Estate License Code.”

59 OS § 858-102 (11) states, “‘Licensee’ shall include any person who performs any act, acts or transactions set out in the definition of a broker and licensed under the Oklahoma Real Estate License Code.”

59 OS § 858-102 (2) states, “The term ‘real estate broker’ shall include any person, partnership, association or corporation, foreign or domestic, who for a fee, commission or other valuable consideration, or who with the intention or expectation of receiving or collecting a fee, commission or other valuable consideration, lists, sells or offers to sell, buys or offers to buy, exchanges, rents or leases any real estate, or who negotiates or attempts to negotiate any such activity, or solicits listings of places for rent or lease, or solicits for prospective tenants, purchasers or sellers, or who advertises or holds himself out as engaged in such activities.”

59 OS § 858-301 states, “However, nothing in this section shall: 1. Prevent any person, partnership, trust, association or corporation, or the partners, officers or employees of any partnership, trustees or beneficiaries of any trust, association or corporation, from acquiring real estate for its own use, nor shall anything in this section prevent any person, partnership, trust, association or corporation, or the partners, officers or employees of any partnership, trustees or beneficiaries of any trust, association or corporation, as owner, lessor or lessee of real estate, from selling, renting, leasing, exchanging, or offering to sell, rent, lease or exchange, any real estate so owned or leased, or from performing any acts with respect to such real estate when such acts are performed in the regular course of, or as an incident to, the management, ownership or sales of such real estate and the investment therein.”

If you don't understand what this means, I suggest you contact a licensed attorney in Oklahoma.

Deanna McCormick · Answer

@Jim Bentley, Just a comment.. and considerations for your family's business.

Age of MIL.. other family members ?? Your compensation??

My parents owned several properties, MN.. and they were in no shape physically to care or manage them but they wanted control..

They had a trust made up,, put all their properties in the name of the trust, I was named trustee and was able to manage and keep the business going. Up until they became disabled (mentally) they could amend the trust, this worked out perfectly for us and it also protected them because when they died nothing had to go thru probate. Nobody knew their business,, very private,, Being a trustee was a new responsibility but I'd done all their bookkeeping and hired all the vendors and always done all the leasing work..

I'm just saying an avenue for your family's business is coming up for discussion and now would be a perfect time to explore this.

Jerry W. · Answer

You might also check in with a local attorney about a possible power of Attorney in addition to being an employee of your MIL.

Rhett Tullis · Answer

@Casey Gray looks like i did pretty good for an untrained regular joe lol.  as you stated below and as I said if he is an employee of the owner then he can do as she wishes but he needs to be an employee or he could become a trustee.  see excerpt below.  Guess it paid to pay attention in all those real estate licensing classes.

However, nothing in this section shall: 1. Prevent any person, partnership, trust, association or corporation, or the partners, officers or employees of any partnership, trustees or beneficiaries of any trust, association or corporation, from acquiring real estate for its own use, nor shall anything in this section prevent any person, partnership, trust, association or corporation, or the partners, officers or employees of any partnership, trustees or beneficiaries of any trust, association or corporation, as owner, lessor or lessee of real estate, from selling, renting, leasing, exchanging, or offering to sell, rent, lease or exchange, any real estate so owned or leased, or from performing any acts with respect to such real estate when such acts are performed in the regular course of, or as an incident to, the management, ownership or sales of such real estate and the investment therein.”

Robert Gilstrap · Answer

@Jim Bentley Almost universally one is exempt from license law when acting in the capacity of an employee (paid or unpaid) for a principal owner and even if that were not the case in OK you could simply get a limited power of attorney from MIL giving you authority to manage the units. No way you should need any type license.

That being said; just because you can do something doesn't mean you should. PM is much more complex than you think it is so get educated before diving in. A good property manager is worth every cent you pay them.

Can a non-owner lease and property manage?

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