Vacation Rental Management Questions
My wife and I just moved to a small mountain town in Colorado and there is a huge demand for vacation property management here. We already have people that want us to manage their property but we are still trying to understand all the legal implications of "property management" for short-tem vacation rentals. We would only be listing the properties on sites like Airbnb, VRBO, and HomeAway.
From what I have seen so far, we have two options:
The first option is to just run a service business that provides listing, cleaning, and booking assistance for the owner. With this option we would just charge a fee for our services.
The second option is to fully manage the property by listing the properties and collecting payment etc.. and then distributing the profit after our commission back to the homeowner.
In Colorado, to be a traditional property manager that manages rental properties, you have to have a real estate license. My main question is: does that apply to short term vacation rentals?
I would appreciate input from anyone.. I have found very little information about this online.
Most Popular Reply
Colorado Real Estate Manual (and other information from the licensing people in Colorado)
From said manual:
Chapter 1: Real Estate Broker License Law
IV. License Law
A. Part 1 – Brokers (page 5)
(2) (a) “Real estate broker” or “broker” means any person, firm, partnership, limited liability company, association, or corporation who, in consideration of compensation by fee, commission, salary, or anything of value or with the intention of receiving or collecting such compensation, engages in or offers or attempts to engage in, either directly or indirectly, by a continuing course of conduct or by any single act or transaction, any of the following acts:
(I) Selling, exchanging, buying, renting, or leasing real estate, or interest therein, or improvements affixed thereon;
(II) Offering to sell, exchange, buy, rent, or lease real estate, or interest therein, or improvements affixed thereon;
(page 8) § 12-61-102, C.R.S. License required.
It is unlawful for any person, firm, partnership, limited liability company, association, or corporation to engage in the business or capacity of real estate broker in this state without first having obtained a license from the real estate commission.
I think that answers your question.
Yes, a broker's license is required. It is in most states. The term of the lease or rental does not matter -- whether it is a weekend or a year (again, in most states). For Colorado, I could find no distinction between short-term and longer-term renting but the licensing people can tell you more precisely about that. To deal with short-term rentals by hotels and other similar businesses, the states simply exempt them from these licensing laws if they have a legal hotel/motel operating permit.