Property management businesses act as intermediaries between property owners and tenants. They market properties, collect rent, handle maintenance and repairs, address tenant complaints, and carry out evictions.
In addition to making life easier for property owners, property management businesses bring experience and expertise to their client’s real estate investment strategy.
In Texas, property managers must go a step further and comply with Texas Real Estate Commission rules and the Real Estate Licensing Act.
If you operate a property management business in Texas, here’s what you need to know about the state’s licensing and registration requirements.
Are property management companies required to get a business license in Texas?
Property management businesses in Texas may need to obtain a real estate broker license. According to Texas law, the primary business activities of a property management company are considered the same as a real estate business. For instance, if your company lists, rents, negotiates, collects rent, or places a tenant in Texas, your business will need a real estate broker license.
If you operate as an LLC or corporation and function as a real estate broker, the Texas Real Estate Commission requires you to obtain a separate license for your business entity. (It’s not enough to have an individual license and register a separate legal entity with the commission.)
What are the licensing requirements for a property management company in Texas?
Resident and nonresident business entities must meet certain prerequisites before applying for a license.
Resident business entities
- Resident business entities must be authorized to transact in Texas.
Nonresident business entities
If you are a nonresident business entity (meaning your business entity was created or chartered under the laws of another state), you may apply for a license in Texas if your business meets the following criteria:
- is licensed as a broker in another state
- was created or chartered in a state that does not license business entities, and your entity is lawfully engaged in the practice of real estate brokerage in that state