Does a property manager need a license in Virginia?

The answer

Yes, in most cases. In Virginia, a person or company that manages rental property for someone else, for pay, is acting as a real estate broker and needs a Virginia real estate licence. The owner managing their own property is generally exempt. Check the licence before you sign.

Why management counts as brokerage

Virginia's real estate statute defines a real estate broker as someone who, for compensation or valuable consideration, leases or offers to lease, or rents or offers for rent, any real estate or the improvements thereon for others.^[1] Renting out a house on an owner's behalf fits that wording, whether or not the firm also sells homes.

The licence comes from the Real Estate Board, which is part of the Department of Professional and Occupational Regulation (DPOR). The statute says no individual shall act as a broker without a real estate broker's license from the Board.^[2]

Which licence the manager needs

There are three things to look for:

• A broker's licence for the individual in charge. An individual who holds a broker's license may act as a salesperson for another broker.^[2]
• A salesperson's licence for agents who work under that broker. The law also says no individual shall act as a salesperson without a salesperson's license from the Board.^[2]
• A firm licence for a company. No business entity, other than a sole proprietorship, shall act, offer to act, or advertise to act, as a real estate firm without a real estate firm license from the Board.^[2]

So a property management company needs a firm licence, with licensed brokers in charge, and the person you deal with should hold a salesperson's or broker's licence. A one-person operation can run as a sole proprietorship if the individual holds a broker's licence.

Who does not need one

Owners are exempt for their own property. The statute exempts any person, partnership, association, corporation, entity, or their regular employees, who as owner or lessor perform the listed acts with reference to property owned or leased by them, where the acts are performed in the regular course of or incident to the management of the property and the investment therein.^[3] That is why you do not need a licence to rent out your own house, and why a landlord's own employees can manage the landlord's own buildings.

There is also a limited exemption for on-site staff of a licensed broker. They may show units, give factual information about the rental, take applications, sign broker-approved rental agreements and accept deposits and rent, but they may not negotiate the amounts or any rental agreements for the owner or broker.^[3]

Be careful about the edges of that exemption. Someone who runs a rental for a relative or a neighbour for a fee is managing property for others. A friendly arrangement does not change the definition above.

What a licensed manager can do that others cannot

The Board's regulations list the activities only a licensee may perform, including showing property, answering questions on listings and legal documents, and discussing, explaining, interpreting, or negotiating a contract, listing, lease agreement, or property management agreement with anyone outside the firm. They also include negotiating or agreeing to any commission, commission split, management fee, or referral fee.^[4] Unlicensed staff may do general clerical work and accept rent and deposits as contracted for in a rental agreement.^[4]

A licensed manager also carries duties around other people's money: rent and deposits paid to a licensee acting for a landlord client must go into an escrow account.^[5]

How to check

1. Ask for the individual's licence number and the firm's licence number.
2. Look both up on DPOR's licence lookup and confirm the licence type, the name and that it is current.
3. Check that the firm's broker is named in your agreement, and ask who at the firm will handle your property day to day.
4. If someone offers to manage for pay and cannot show a licence, do not hand over rent, deposits or keys.

Stop and call a pro if

• The manager cannot show a licence. Stop before signing or paying; an unlicensed firm may not be able to act for you lawfully.
• A firm claims the owner exemption for your property. The exemption covers an owner's own property, not other people's.
• You already have an agreement with an unlicensed manager. Ask a Virginia attorney before you end it or withhold money.
• Money seems to be missing from rent or deposits. Contact the Real Estate Board and a Virginia attorney.

Getting help in Virginia

Read what a property manager does for a rental owner and how much property managers charge in Virginia next. Browse more commercial answers or the commercial services directory. When you need repair work on a rental, describe the job and local pros quote it.