Real Estate license for property management entity in PA

5 Replies

hello BP!

i realize this topic has been discussed before but i have a little twist on this question.

according to PA law one does not need a re license to manage own properties. what if i create an LLC that will manage properties that i and my holding LLCs own (and ONLY those properties)? in other words, a management company (myself as the owner) managing properties that i own or have majority interest in. would a real estate license be required for the management company? Real Estate Commission was not able to answer this question :) thank you!

Your properties, you can manage them - a member of an llc can manage any properties they are a part of. The ontly thing is the management co. Would have to have ownership of each llc or parent llc. I do not believe having a management co. Will help you tax wise if that is what you are going after, it will just cost you more money in forming and maintaining the llc.

@Tatyana M.

As a practical matter, you might be okay. But I'm not sure what exactly the benefits would be. For example, it's unclear whether you would have additional liability protection if you handle you act as your own property manager. This is because Pennsylvania law recognizes something called participation liability/theory. It basically stands for the proposition that if you --- as an LLC member --- personally do something wrong, you can be personally held liable even if you do it on behalf of the LLC.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

thank you all! 

I have family members that im employing (currently as independent contractors, they will be paying self employment taxes themselves at tax filing) and wanted to create a management company to  write off emplyer's portion of self employment taxes as a business expense; and with the hopes to do the same when i have to pay myself self employment and/or purchasing health insurance. 

@Eric Carr - luckly PA doesn't charge extra fees for LLCs besides the filing fees; 

@Chris K. - thank you Chris!!! i wasnt even thinking about additional liabilities