Is a Broker's License Needed?

Question

HiI am interested in investing in a property (located in New Jersey) with a few other investors. We will be creating a new LLC that will own/invest in the property. I will also be creating a property management company (based in NJ as well) to manage the LLC's property. I am aware that I need a broker's license to manage properties that I do not own.  However, in the above scenario I would be owning the property but through an LLC with a few other investors. Would I need a broker's license to manage this property under these circumstances?Thanks,Jay

Drew Sygit · Answer

@Jay Cho it's more complicated that you may think.

You technically won't own the property!

You will have an ownership stake in the LLC that legally owns the property.

Many states would not allow you to represent the LLC in a landlord-tenant case (eviction, etc.) and would require an attorney to represent the LLC.

So, the same logic may require you to have a RE Broker's license to manage the LLC's property.

Run this by a knowledgeable real estate attorney!

Jay Cho · Answer

Thanks for all the feedback!  I really appreciate it.

Nathan Gesner · Answer

I would speak with someone at the Real Estate Commission to verify. I think you will need a license unless you are a salaried employee of the LLC.

Adam Bartomeo · Answer

In most states, the company that owns the property can hire an employee to manage the property for them without a license.

Russell Brazil · Answer

You wont own the property. You own shares in a company that owns the property.

Jeff Tanner · Answer

I work for a Property Management company in New Jersey, where we manage various properties across the state and New York City. Since we oversee properties for multiple owners, we must hold a broker's license. Additionally, since we handle leasing for these properties, a broker's or real estate license is necessary.

However, a broker's license is not required if you manage properties that you own jointly with investors. It’s important to note that if an outside property owner approaches you for management services, you must be licensed as a broker to comply with regulations. While this is based on my understanding, and I am not a legal professional, I hope this provides some clarity. Please feel free to reach out if you need further assistance.

Is a Broker's License Needed?

Most Popular Reply