Is there any state licensing requirement to run a property management compnay in CA?

Asked by Ray, California Tue Sep 11, 2007

If there is, what licensing requirement is needed by which state depatment? Many thanks.

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Larry S, , Van Nuys, CA
Thu Nov 29, 2007
Ray, unfortunately a lot of the answers are incorrect. There are many exceptions to these rules in regards to commercial versus residential management in California. And this forum is not the place to go over all the requirements, but to manage commercial property for an owner, the PM must have a broker's license to receive commission when the PM leases a unit.

For residential management , a PM can do so without a broker's license if they have a power of attorney agreement with the owner(s) of the property, and the owners are aware that the PM does not hold a broker's license. The law has nothing to do with how a PM relates to the tenants. A PM that does not have a license will typically charge much less than a licensed PM.

In California any residential building that has 16 or more units MUST have a resident manager on-site. At no time is that manager required to be licensed. That same manager can also do 'off-site' management for smaller buildings, and still not be required to be licensed.
3 votes
I was contacted by the D.A. Office because I managed a seven unit property and I am a landlord as well? What should i do?
Flag Thu Oct 17, 2013
Jed Lane, Agent, Petaluma, CA
Tue Sep 11, 2007
You have to have a Real Estate Broker's license issued by the DRE (CA Dept. of Real Estate). I've provided the link below.
1 vote
Pam Winterba…, Agent, Danville, VA
Tue Sep 11, 2007
In order to operate a Property Management Company you must hold a California Broker's license.
Web Reference:
1 vote
Patti Philli…, , Carlsbad, CA
Tue Sep 11, 2007
Ray, It has always been my understanding that to do property management you must be a broker, not just a licensed agent. Someone in the property management company must have a broker's license anyway, which the company operates under.

Patti Phillips
1 vote
Ute Ferdig, Agent, Auburn, CA
Tue Sep 11, 2007
A real estate license is required for anyone who manages real property for another person or entity, or acts as an agent for a seller or purchaser of real property, or acts as an appraiser of real estate, or as a mortgage broker. Attorneys are excluded from licensing requirements provided they are limited to offering legal and advisory services.
Web Reference:
1 vote
Anna and Dan…, Agent, Mission Viejo, CA
Tue Mar 19, 2013
You must hold a Real Estate Broker's License through the DRE (Department of Real Estate) if you plan to be an independent property manager. You must hold a Real Estate Sales Agent License through the DRE if you plan to operate as an employee of a property management company.
0 votes
Vacationrent…, , California
Wed Apr 11, 2012
How about if you manage a vacation rental business - short term rentals?
0 votes
Jed Lane, Agent, Petaluma, CA
Sun May 15, 2011
To manage property that you own you do not need a license. If you are managing for others and managing a trust account of owners money you must have a Broker’s License which is granted by the California Department of Real Estate (DRE).
A property management company can manage properties or HOAs. Agents can manage property if they are supervised by a licensed broker, just like selling real estate.
Large rental properties have resident managers. Resident managers do not require a license.
0 votes
Theresa, Renter, Riverside, CA
Sat May 14, 2011
It now 2011, Do you need a California Real Estate Broker license to management 7 units or more, apartments and individual homes for activities collecting rents, screening tenants, negiotating leases and month-to-month rentals and includes recieving compensation as property manager in representing the owner or owners and not required to be on site? According blog in november 2007 from larry, an agent, van nuys, says you do not need a license only a power of attorney from the owner/owners to operate as property manager. Is it still the same or it has it changed?
0 votes
Martin, , Los Angeles, CA
Sun Dec 2, 2007
Take a look here:

read section 10131 but pay particular interest to section 10131.01

Here are a few excerpts:

"10131. A real estate broker within the meaning of this part is a person who, for a compensation or in expectation of a compensation, regardless of the form or time of payment, does or negotiates to do one or more of the following acts for another or others:

(b) Leases or rents or offers to lease or rent, or places for rent, or solicits listings of places for rent, or solicits for prospective tenants, or negotiates the sale, purchase or exchanges of leases on real property, or on a business opportunity, or collects rents from real property, or improvements thereon, or from business opportunities.

However, subsection 10131.01 states:

"10131.01. (a) Subdivision (b) of Section 10131 does not apply to:
(2) any person or entity, including a person employed by a real estate broker, who, on behalf of another or others, solicits or arranges, or accepts reservations or money, or both, for transient occupancies described in paragraphs (1) and (2) of subdivision (b) of Section 1940 of the Civil Code, in a dwelling unit in a common interest development, as defined in Section 1351 of the Civil Code, in a dwelling unit in an apartment building or complex, or in a single-family home"

What this subsection means is that if you are an individual, you don't need a broker's license. However, if you read on you will see that is also says that if you are employed by a PM firm, there has to be a broker of record, the following sections explain the broker's responsibilities. It follows then that if it's your firm, you need a broker's license.

As Larry S wrote, you can only manage residential property and there has to be an on site manager if it's 16+ units
0 votes
richie rich, Home Buyer, Compton, CA
Mon Oct 29, 2007
Ray, Most of the responses to your question are accurate, however, there is an exception to a property management company holding a broker's license in California for managing property: if a company is in the business of managing Home Owner Associations, currently no license is required.
0 votes
Jim Walker, Agent, Carmichael, CA
Sat Oct 6, 2007
Here is the one exception that I am aware of to the licensing rule: the resident manager of a single location, such as the resident manager of an eightplex who receives salary or free rent for property management tasks at a single site. In that situation you may regarded as an employee of the owner.

A property manager who manages at separate locations, even if it is for the same landlord, must be licensed.
You must also have a license if you represent multiple landlords at a single site (such as at condo complex)
0 votes
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