Property Management Laws in Arizona
A real estate license is required for anyone engaged in real estate activities as defined by Arizona law Sec 32-2101 This includes most activities that a property manager is required to perform, tasks like leasing, advertising, negotiating, and collecting rent.
Can Unlicensed Person Perform Property Management Duties?
According to Sec 21-2121, property managers who work onsite in one location and don’t receive special compensations like property management fees, commissions, etc, are not required to be licensed as real estate agents.
Property managers who manage short-term rentals (stays of less than 31 days) also don’t need a real estate license.
Managers of one nonresidential property or a couple of nonresidential income properties that are in one location, and are employed by the property owner’s licensed property management company, are not required to have a real estate license.
Employees of a licensed real estate broker who perform clerical and administrative duties only or are engaged in telemarketing for the broker are not required to hold a real estate license.
Finally, attorneys, people holding a valid power of attorney, and bankruptcy trustees are also exempt from the real estate license requirement.
Can a Real Estate Agent Take Property Management Clients?
A real estate agent can perform property management duties and have property management clients if the real estate brokerage allows property management. Many real estate brokerages perceive property management as having more liability and thus increasing the E&O Insurance so not many brokers allow it.
If a real estate agent wants to have property management clients, she can always get a real estate broker license and start a business or get a Qualifying Broker for the brokerage.
How to Become a Property Manager in Arizona?
If you would like to be employed as a property manager with an apartment community, no license is needed.
Starting a property management business on the other hand requires a real estate license.
A real estate agent can find a brokerage that allows property management and work under their supervision for three years and then get a broker’s license. The problem with this approach is most brokerage will probably keep the property management clients.
Another way for a non-licensed person to start a property management company is to hire a qualifying broker. There is no requirement for an owner of a real estate company to have a real estate license as long as they have a qualifying broker on record.
Definitions
48. “Real estate broker” means a person, other than a salesperson, who, for another and for compensation:
(a) Sells, exchanges, purchases, rents or leases real estate, businesses and business opportunities or timeshare interests.
(b) Offers to sell, exchange, purchase, rent or lease real estate, businesses and business opportunities or timeshare interests.
(c) Negotiates or offers, attempts or agrees to negotiate the sale, exchange, purchase, rental or leasing of real estate, businesses and business opportunities or timeshare interests.
(d) Lists or offers, attempts or agrees to list real estate, businesses and business opportunities or timeshare interests for sale, lease or exchange.
(e) Auctions or offers, attempts or agrees to auction real estate, businesses and business opportunities or timeshare interests.
(f) Buys, sells, offers to buy or sell or otherwise deals in options on real estate, businesses and business opportunities or timeshare interests or improvements to real estate, businesses and business opportunities or timeshare interests.
(g) Collects or offers, attempts or agrees to collect rent for the use of real estate, businesses and business opportunities or timeshare interests.
(h) Advertises or holds himself out as being engaged in the business of buying, selling, exchanging, renting or leasing real estate, businesses and business opportunities or timeshare interests or counseling or advising regarding real estate, businesses and business opportunities or timeshare interests.
(i) Assists or directs in the procuring of prospects, calculated to result in the sale, exchange, leasing or rental of real estate, businesses and business opportunities or timeshare interests.
(j) Assists or directs in the negotiation of any transaction calculated or intended to result in the sale, exchange, leasing or rental of real estate, businesses and business opportunities or timeshare interests.
(k) Incident to the sale of real estate, businesses and business opportunities negotiates or offers, attempts or agrees to negotiate a loan secured or to be secured by any mortgage or other encumbrance upon or transfer of real estate, businesses and business opportunities or timeshare interests subject to section 32-2155, subsection C. This subdivision does not apply to mortgage brokers as defined in and subject to title 6, chapter 9, article 1.
(l) Engages in the business of assisting or offering to assist another in filing an application for the purchase or lease of, or in locating or entering upon, lands owned by the state or federal government.
(m) Claims, demands, charges, receives, collects or contracts for the collection of an advance fee in connection with any employment enumerated in this section, including employment undertaken to promote the sale or lease of real property by advance fee listing, by furnishing rental information to a prospective tenant for a fee paid by the prospective tenant, by advertisement or by any other offering to sell, lease, exchange or rent real property or selling kits connected therewith. This shall not include the activities of any communications media of general circulation or coverage not primarily engaged in the advertisement of real estate or any communications media activities that are specifically exempt from applicability of this article under section 32-2121.
(n) Engages in any of the acts listed in subdivisions (a) through (m) of this paragraph for the sale or lease of other than real property if a real property sale or lease is a part of, contingent on or ancillary to the transaction.
(o) Performs any of the acts listed in subdivisions (a) through (m) of this paragraph as an employee of, or in behalf of, the owner of real estate, or interest in the real estate, or improvements affixed on the real estate, for compensation.
(p) Acts as a business broker.
