Does a property manager need a real estate license in California?

Does a property manager need a real estate license in California?

A common question for those who want to become a property manager in California is whether you need a real estate license. Actually, a real estate license is not enough. You need a real estate broker's license to be a property manager in California. There are some key differences between a real estate and broker's license.
 

Real Estate License requirements for California Property Managers

Becoming a property manager isn’t just a matter of putting a sign on your office door and offering up your services. Depending on which state in which the property manager operates, there are some specific rules about what he or she must do before going into business.
 

California is no different. Anyone thinking of becoming a property manager in the Golden State needs to first understand California property management laws.
 

Property management certification in California requires the property manager to have a real estate broker’s license. Or the property manager must work with someone with a real estate broker’s license. This is because the state sees managerial tasks such as collecting rent, negotiating a lease, and soliciting tenants to rent a place as real estate-related tasks.
 

While there are many things to look for when hiring a property manager, ensuring that he or she has a property management license in California or works for someone who does should be at the top of your list to avoid any kind of legal trouble down the line.
 

To double check, you can always confirm this information with the California Department of Consumer Affairs under the Bureau of Real Estate.
 

Exceptions: When a property manager doesn’t need a real estate brokers license

There are a few exceptions to this law. First of all, if the property owner decides to rent out his or her own property, no real estate license is required. Second of all, if a person is handling rental duties under the direct supervision of someone with a real estate broker’s license, that is perfectly okay.
 

That means the manager can hire employees to handle tasks such as showing properties to prospective tenants, collecting rent payments, and providing and accepting leases to and from new tenants.

How to get a Real Estate Broker’s License in California

To further understand California property management laws and why the state requires this type of licensing, it may help to understand what goes into obtaining the real estate broker’s license and some of the requirements of a brokers license:
 

Applicants must be 18 years old or older, and they must be able to prove that they are a legal resident of the United States. Honestly is also important, particularly for applicants who have been convicted of a crime in the past. The state has the right to deny applicants who are not honest about past conviction, though it may also deny a license to those who have committed certain crimes in the past.
 

Other requirements include:

• Experience: Experience selling or working with real estate is a must. The applicant should have at least 2 years of experience in the industry from within the past 5 years. Many property managers start with a property management or real estate firm at an entry-level position to gain experience until they can obtain a license of their own.

• Pass an Exam: All applicants must pass the California Broker of Real Estate Exam, which is sometimes referred to as the CalBRE. Requirements to take and pass the exam include the ability to read, write, and understand fluent English; the ability to perform mathematical computations related to the business and real estate industries; a general understanding of the real estate business; and an understanding of the principal and agent relationship, the related code of business ethics, and all California real estate laws as administered by the Real Estate Commissioner.

• College Classes: The applicant must all take and pass several college-level real estate classes that cover topics like finance, real estate law, and appraisals from a college, university, or higher education institution that is approved by the California Real Estate Commission. Once a new real estate broker is licensed, he or she must participate in continuing education.

• Fees: Finally, a $95 fee is required to take the exam, and an additional $300 fee is required for the license.

Other Laws Related to Property Managers

While a property manager is required to have a real estate broker’s license, that’s not the only state law he or she must adhere to. The person who manages a rental property must ensure that it is always inhabitable and meets minimum standards, codes, and laws provided by the state. Failure to do so could cost the property owner rent and even prevent an eviction from taking place.
 

Property managers must also follow laws related to a tenant’s security deposit. For example, it can’t be higher than two months’ worth of rent, and if the tenant requests it, a move-out inspection must be performed to determine if the tenant may receive all or some of the deposit back.
 

A good property manager will perform these types of inspections at the time the tenant moves in, periodically during the tenant’s stay, and after the tenant moves out anyway.
 

If it is determined that the tenant will receive all or some of the security deposit back, the manager must return it within 21 days of the move out date, and any cleaning or repairs that cost more than $126 must be proven by the property manager with a receipt. The tenant has 4 years to dispute the deposit.
 

Many cities in California also have rent control laws in place for property managers, including Berkeley, Oakland, San Francisco and Los Angeles. It’s important for a property manager to understand these laws as they can limit rent increase, prevent evictions, and limit other fees a property owner may want to charge.
 

Find a Qualified Property Manager

When choosing a property manager, not just anyone will do. The state of California is very specific about what kind of licensing the property manager must have, as well as what laws he or she must follow. Always make sure you choose a licensed, reputable manager or property management company who will make the right legal choices, or it could end up costing you in the long run.

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