Do property management companies need a real estate license?
In most states, activities commonly performed by property management companies — including negotiating leases, collecting rents, and handling security deposits on behalf of property owners — fall within the definition of regulated real estate brokerage activity. As a result, most states require property management companies engaged in these activities to hold an active real estate brokerage license and to have a licensed broker designated as responsible for those activities. Requirements vary by state. Companies operating across multiple states should confirm the applicable licensing requirement in each jurisdiction.
What is a Designated Broker of Record?
A licensed real estate broker who is legally responsible for all regulated brokerage activities conducted under a property management company's license. Most states require one before a company can legally manage or lease properties on behalf of owners.
What does the Designated Broker actually do?
The Designated Broker provides regulatory supervision and oversight of the licensed brokerage structure supporting your operations, while your company remains responsible for its day-to-day property management operations and compliance responsibilities.
Why is the role called different things in different states?
Every state uses its own terminology for the licensed broker responsible for a property management company's brokerage activities. The role is called Designated Broker in Florida, Texas, and most other states. North Carolina and South Carolina use Broker-in-Charge. Illinois uses Designated Managing Broker. Colorado uses Employing Broker. Tennessee and Kentucky use Principal Broker. New Mexico uses Qualifying Broker. Michigan uses Designated Supervising Broker. The oversight function is the same regardless of what each state calls it.
