Q: May unlicensed persons serve as property managers for rental properties?
A: Commission Rule 535.13(b) states that those who hold themselves out as "property managers" for others and for compensation must be licensed, provided the person also rent or leases the property for the property owner. However, many property management functions appear to fall within categories of activities that do not require licensure. These include bookkeeping functions and arranging for repairs. So long as an unlicensed person carefully limits his or her property management activities to those which do not require a license, neither criminal charges nor Commission disciplinary action would be warranted. Note that persons acting as on-site managers at apartment complexes are exempt from licensure under Section 1102.005(7) of the License Act.
So there may be some things you can do and some you can't. I would think you would want to handle all the admin stuff. Placing ads, arranging repairs, placing signs, bookkeeping, credit checks, applications checks, etc. Let him handle the phone calls, showings, etc. You would probably want to come up with a specific list of duties you do and that he does and then run them by your attorney.
535.4 Requires a License if:
(l) 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.
Refer to Statute 535.5 adopted Jan 1, 2011 "(d) 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.
(g) An answering service or clerical or secretarial employees identified to callers as such to confirm
information concerning the size, price and terms of property advertised are not required to be licensed under the Act.
Here is the link (Check pg 13):
This is a very gray line so have your investor proceed cautiously
You can verify with TREC
Good luck to your investor.
Sonia Roberts, RealtorÂ®
"A satisfied customer is the best business strategy of all."
That point being when he has enough properties to leverage the fees he will be charged as well as a thorough understanding of what the job of managing his properties entails.
For now he wants to be hands on in dealing with everything tenant related i.e. maintenance calls, collecting rents, overseeing what is happening at his properties, etc.... . Not a bad idea for someone new to being a Landlord in my opinion. He wants to SEE the credit reports and background investigations and do some of the verifications himself for now.
I think he was just given some bad advice by an Agent related to someone he works with that might have been trying to drum up business. It is one thing to say it is ill advisable and give reasoning, something totally different to indicate he can't.