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Property Management

Property Management

An Ohio real estate license is required to perform many activities related to real estate, including property management.  Remember - individuals performing these tasks may only do so under the supervision of a real estate broker!

What is property management?

Property management is performing or attempting to perform any of the following tasks:

  • Negotiating contracts and lease agreements;
  • Vary or deviate from the rental price or other lease terms on behalf of the property owner;
  • Approving rental applications or lease agreements;
  • Setting or arranging the terms and conditions of a lease on behalf of the owner;
  • Offering inducements to prospective tenants;
  • Finding tenants for the property;
  • Advertising the property;
  • Showing the property to prospective tenants;
  • Collecting rent;
  • Otherwise representing another in a lease or rent transaction.

A real estate license is required when...

you are a person who, for another and for a fee, operates, manages, rents, offers, or attempts to operate, manage, or rent, other than as a custodian, caretaker, or janitor, any building or options of buildings to the public as tenants.

The general exceptions found in license law also apply to property management.

The primary general exceptions are the following:

  • A person that owns a property may manage his or her own property;
  • A person appointed by any court or a public officer may manage a specific property;
  • A trustee in bankruptcy may manage a specific property;
  • W-2 employees may manage property owned by their employer;
  • Executors and guardians may manage specific properties;

A real estate license is not required if:

you are a person working under the supervision of a broker and whose compensation for service is primarily on a salaried or hourly basis and if you only perform the following limited duties:

  • Maintenance;
  • Clerical or administrative support;
  • Exhibit or show residential rental units to prospective tenants;
  • Furnish published information;
  • Supply applications and leases;
  • Receive applications and leases for submission to the owner or brokerage for approval;
  • Collect or accept rents and/or security deposits which are made payable to the owner or real estate brokerage.

FAQ's

Q: What happens if I manage property without a license?

A: The Ohio Real Estate Commission may assess a civil penalty of up to $1,000 per violation, per day against any person found to be engaging in unlicensed activity, a violation of ORC 4735.02. Each action taken without a license is considered a separate violation. For example, if you run an ad for a property for two weeks, show the property five times within that two-week period, and negotiate two leases on behalf of the owner, you have committed 21 violations and may be fined up to $21,000.

Q: What if I’m showing properties to prospective tenants for an owner but don’t get paid to do so - I’m only doing it because I want her to continue to use my landscaping business?

A: Even if you don’t get paid to perform activities that require a license, you may still be participating in unlicensed activity, since license law indicates that expecting to receive something of value is sufficient to trigger licensure requirements. You are expecting to receive the value of the owner’s continued patronage of your landscaping business; therefore, you are expecting valuable consideration.

Q: I have a salesperson’s license and would like to manage property for others outside of and separate from my brokerage activities. Is this permissible?

A: No. To engage in property management activities that require a license, you would either have to obtain a broker’s license or run the property management through your broker.

Q: As a property manager, am I able to have a maintenance worker unlock a property to allow prospective tenants access to a property?

A: Yes, under very limited circumstances. The actions of the maintenance worker would be limited to unlocking the property. He or she could not answer questions about the property, provide lease terms, “market” the property by pointing out amenities, or any other activities that require a license.

Q: A property owner would like to employ me to manage the property she owns. Do I need a license?

A: No, you would fall under the exemption if you are a W-2 employee of the property owner. If you receive an I-9, then you are not an employee and would need a license.

Q: Why should a consumer use a licensed broker/salesperson to manage their property?

A: Ohio real estate brokers and salespersons must submit pre-licensure education and take an exam to obtain a license. They are experts in their field and can provide their expertise when managing your property. In addition, Ohio licensees are held to a higher standard than an unlicensed person. A property owner is able to file a complaint against a licensee if they fail to uphold these standards. Finally, a person who is harmed by an Ohio licensee who violated license law may be able to make a claim against the Ohio real estate recovery fund in the event the person gets a judgment against a licensee, but the judgment is uncollectible.