Rental Basics in Austin>Question Details

Rick Kolton, Real Estate Pro in Austin, TX

Can an Investor that owns multiple properties hire a person to manage and lease his properties that is NOT a Licensed Real Estate Agent?

Asked by Rick Kolton, Austin, TX Thu Mar 15, 2012

Before I became a Realtor I briefly worked as a New Home Sales Representative with KB Homes and did much of what we, as agents, do when representing a Seller listing a property. But I was not required to have a license. I have an Investor currently handling things himself that wants to hire a secretary/admin assistant to basically run his ads, answers his phones, open doors etc. He was advised by someone that the person would have to be a licensed Agent. That doesn't seem right considering that not only New Home Sales Staff as well as every Leasing Agent in every Apartment Complex perform the same duties and are not licensed agents for the most part.

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From the TREC webpage:
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.
0 votes Thank Flag Link Fri Mar 16, 2012
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
There are 2 different questions you are asking, to manage and lease or as secretary/admin
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):
http://www.trec.state.tx.us/pdf/rules/trecrules.pdf

This is a very gray line so have your investor proceed cautiously


You can verify with TREC
Good luck to your investor.
Sonia Roberts, Realtor®
Canady Realty
512.709.1811
Sonia@CanadyRealty.com

"A satisfied customer is the best business strategy of all."
Michael LeBoeuf
0 votes Thank Flag Link Fri Mar 16, 2012
I think so. Call TREC and ask them first. I know that a Builder can hire unlicensed persons to sell new homes. There may be some restrictions.
0 votes Thank Flag Link Fri Mar 16, 2012
He intends, at some point, to turn everything over to a Property Management Company.

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.
0 votes Thank Flag Link Thu Mar 15, 2012
They don't have to be licensed as long as they are ONLY representing properties owned by that investor and is a paid employee. However, the investor better have the rules and policies very explicitly spelled out in writing. The investor/employee are still required to follow all federal laws concerning discrimination, fair housing, eviction rules, etc etc. These can be cumbersome so I recommend talking to a real estate attorney for advice.
0 votes Thank Flag Link Thu Mar 15, 2012
Yes, He/She has to be an employee of your company and they can not represent themselves as an agent. The problem with this is that you would be missing out on a ton of the marketing tools that are available to agents, specifically Realtors, and will probably lose more money than you will ever save in hiring a non-licensed person. This isn't to say that just hiring an agent to manage your property is going to get the job done but hiring a solid licensed property manager that knows your market and is up to date on the latest marketing techniques tools will both save you money and increase the value of your investments.
0 votes Thank Flag Link Thu Mar 15, 2012
Contact:

Danny L. Hardeman
Texas Brokers License #0517774

Blue Crown Properties - Austin
512.537.4770 office

He will help you.

Doug Vogelsass
0 votes Thank Flag Link Thu Mar 15, 2012
He intends, at some point, to turn everything over to a Property Management Company. 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. maintence 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. Eventually he will turn it all over. 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.
Flag Thu Mar 15, 2012
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