Does a Property Manager Need a License in Texas?
Texas requires a real estate license for most of the duties a property manager normally performs like showing a home, advertising the property and accepting or directing inquiries, receiving rent or deposit, paying vendors, paying for services from collected rent. Texas Administrative Code Section 535.4
(a) The Act applies to any person acting as a real estate broker or sales agent while physically within Texas, regardless of the location of the real estate involved or the residence of the person’s customers or clients. For the purposes of the Act, a person conducting brokerage business from another state by mail, telephone, the Internet, email, or other medium is acting within Texas if the real property concerned is located wholly or partly in Texas.
(b) This section does not prohibit cooperative arrangements between non-resident brokers and Texas brokers pursuant to §1101.651(a)(2) of the Act and § 535.131 of this title.
(c) Unless otherwise exempted by the Act, a person must be licensed as a broker or sales agent to show a property. For purposes of this section, “show” a property includes causing or permitting the property to be viewed by a prospective buyer or tenant, unlocking or providing access onto or into a property for a prospective buyer or tenant, and hosting an open house at the property.
(d) A license holder may permit a prospective tenant unescorted access to view a property available for rent or lease only if:
(1) the property is vacant, meaning no person lives at, and no personal property except property intended to remain or convey is stored at, the property;
(2) the license holder employs a method to control access and verify the identity of the prospective tenant; and
(3) the property owner has signed a written consent that sets out in bold print in at least 12-point font that:
(A) the property owner is aware that unescorted access may occur; and
(B) specifies whether the broker enabling unescorted access or the property owner will be responsible for any damage that results from such unescorted access.
(e) The employees, agents or, associates of a licensed broker must be licensed as brokers or sales agents if they direct or supervise other persons who perform acts for which a license is required.
(f) A real estate license is required for a person to solicit listings or to negotiate in Texas for listings.
(g) A business entity owned by a broker or sales agent which receives compensation on behalf of the license holder must be licensed as a broker under the Act.
(h) A person controls the acceptance or deposit of rent from a resident of a single-family residential real property unit and must be licensed under the Act if the person has the authority to:
(1) use the rent to pay for services related to management of the property;
(2) determine where to deposit the rent; or
(3) sign checks or withdraw money from a trust account.
(i) For purposes of subsection (h) of this section, a single-family residential unit includes a single family home or a unit in a condominium, co-operative, row-home or townhome. The term does not include a duplex, triplex or four-plex unless the units are owned as a condominium, cooperative, row-home, or townhome.
(j) A person must be licensed as a broker to operate a rental agency.
(k) A real estate license is required of a subsidiary corporation, which, for compensation, negotiates in Texas for the sale, purchase, rent, or lease of its parent corporation’s real property.
(l) A person who arranges for a tenant to occupy a residential property must have a real estate license if the person:
(1) does not own the property or lease the property from its owner;
(2) receives valuable consideration; and
(3) is not exempt under the Act.
(m) A real estate license is required for a person to receive a fee or other consideration for assisting another person to locate real property for sale, purchase, rent, or lease, including the operation of a service which finds apartments or homes.
(n) The compilation and distribution of information relating to rental vacancies or property for sale, purchase, rent, or lease is activity for which a real estate license is required if payment of any fee or other consideration received by the person who compiles and distributes the information is contingent upon the sale, purchase, rental, or lease of the property. An advance fee is a contingent fee if the fee must be returned if the property is not sold, purchased, rented, or leased.
(o) A person must be licensed as a broker or sales agent if, for compensation, the person:
(1) advertises for others regarding the sale, purchase, rent, or lease of real property;
(2) accepts inquiries received in response to such advertisements; and
(3) refers the inquiry to the owner of the property.
A real estate broker license is required to open a property management company.
Who Regulates Property Management Companies?
The Texas Real Estate Commission Regulates property managers, real estate agents, and brokers. In addition to regulation and enforcement of the state laws and investigation of complaints, TREC also offers education and licensing for new agents.
If an Owner of Rental Properties Hires Employees, Do They Need to be Licensed?
No, employees of property owners do not need a license. They can rent or sell the properties of the owner as long as this doesn’t involve other people’s properties.
(c) A real estate license is not required for an individual employed by a business entity for the purpose of buying, selling, or leasing real property for the entity. An entity is considered to be an owner if it holds record title to the property or has an equitable title or right acquired by contract with the record title holder. An individual employed by a business entity means a person employed and directly compensated by the business entity. An independent contractor is not an employee.
Rule 535.5(c)
Does a Community Association Manager Need a License in Texas?
Currently, Texas doesn’t require a license for managers of Community and Condo Associations.
How to Get a License?
To become a property manager, a real estate agent license must be obtained first. The Texas Real Estate Commission issues licenses. Here are the steps required to get a license.
- File Your Application
- Get Your Fingerprints Taken and Pass Your Background Check
- Submit Your Qualifying Education
- Take the Exam
- Find a Sponsor
Requirements to Open a Property Management Company
In order to open a property management company, a real estate broker license is required. To qualify for a broker’s license a real estate agent must have 4 years of experience and must accumulate at least 3600 points.
