What are the rules?

Question

BP Fam🫡, I need someone to put me up on game please, b/c I'm kinda confused on this topic.

I keep seeing that to manage a property one has to have some type of real estate credentials. Is that still so, if you're self managing a small multifamily? An can you have ppl working with you w/o needing those credentials?

Drew Sygit · Answer

Most states require either a RE brokers or agents license to manage properties you do NOT have an ownership interest in or that you are not a W-2 employee of the owner.

So, most states do not require licensing to manage what you own.

Keith Jablonowski · Answer

Depends on the state you are in.  Some states require a real estate/broker license to manage properties for other people.  Others require nothing.

In IL you can manage your own properties without being licensed, but need to be licensed to manage any 3rd party owned properties. You can have employees do unlicensed activities but if they are going to do leasing, showings, sign contracts, etc they need to be licensed as well.

Michael L. · Answer

@Drew Sygit, thanks for the clarity, very helpful.

Michael L. · Answer

@Peter Mckernan, thanks for chiming in with your expertise. It was well received...

Michael L. · Answer

@Jim Johnson, you cleaned that up nicely so it wouldn't be so complicated. Thank you kindly champ!

Michael L. · Answer

@Keith Jablonowski, right on✊🏻, I appreciate the clarity.

Peter Mckernan · Answer

If you are doing 3rd party PM work yes, you need to have real estate agent/broker license. But if you are doing self management of your own units you do not need anything.

You can do PM work under a broker and do property management that way without a license, they have to be willing to handle the trust accounts and all.

Jim Johnson · Answer

This depends heavily on the state, but generally, owners can manage property they own without a real estate or property management license. That’s different from managing property for someone else for pay — which usually does require a license.

Where people get into trouble is with helpers. Employees may be able to handle certain admin tasks, but activities like leasing, showing units, negotiating terms, or collecting rent can require licensing depending on how things are structured and whether they’re acting for others.

The key questions are: Are you only managing your own property? And what tasks are others doing for you?

Since rules vary by state, checking with your state real estate commission or a local attorney is the safest move.

Michael L. · Answer

@Keith Jablonowski, thanks for putting me on the right track. So pretty much, whenever you're gonna do leasings or showings you have to be licensed, even if it's your own property?

Keith Jablonowski · Answer

Not quite.  You can do your own leasing/showings without being licensed.   Depending on your state an employee of your company might/might be able to without being licensed. It all comes down to what state you are in and it's regulations.

What are the rules?

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