Exceptions to Oregon Property Manager Licensing

Oregon does have a few exceptions to property manager licensing

By Jeff Sorg, OnlineEd Blog

(December 9, 2020)

 OnlineEd – Property management of rental real estate under Oregon law also means representing a tenant or prospective tenant when renting or leasing real estate and includes, but is not limited to:

  • consulting with tenants or prospective tenants about renting or leasing real estate;
  • assisting prospective tenants in renting or leasing real estate;
  • assisting prospective tenants in qualifying for renting or leasing real estate;
  • accepting deposits or other funds from prospective tenants for renting or leasing real estate and holding the funds in trust for the prospective tenants;
  • representing tenants or prospective tenants renting or leasing real estate;
  • offering or attempting to do any of the acts described in this paragraph for a tenant or prospective tenant. These activities apply to residential real estate and nonresidential real estate. Residential real estate is defined as real property that constitutes “dwelling units” and “premises,” and nonresidential real estate is anything other than residential real estate.

There are some exceptions to the requirement to have a license for property management. Some of these exceptions are:

  • When a person is an employee of a property manager or principal broker. An unlicensed employee of a property manager or principal broker cannot negotiate a property management agreement with an owner. However, an unlicensed employee can engage in other property management activities under the supervision of a property manager or principal broker, so long as the employee follows the laws and rules governing property management activities. Some of these permitted activities are:
    • showing a rental unit to a prospective tenant;
    • receiving rental applications from prospective tenants;
    • checking a tenant’s personal and credit references;
    • negotiating rental agreements with tenants;
    • hiring for repairs or maintenance;
    • collecting and processing rents;
    • supervising a premise manager; and
    • coordinating F.E.D. (Forcible Entry and Detainer) actions.
  • When a person is a full-time employee of a single owner of real estate whose activities involve real estate of the employer and are incidental to the employee’s normal nonreal estate activities.

A common example would be the secretary of a property owner who periodically shows vacant space to potential tenants.

  • When a person is acting as an attorney-in-fact under a duly executed power of attorney from the owner. A power of attorney must authorize the person to supervise or execute any contract to lease real estate. A power of attorney must be recorded in the county in which the subject property is located.
  • When an attorney is rendering services in the performance of his or her duties as an attorney for a client.

A typical example is an attorney entering into a rental agreement for property belonging to an estate in probate.

  • When a person engages in property management activity under the order of any court.

A typical situation for this exemption is a court-appointed receiver ordered to manage and liquidate property in a bankrupt estate.

  • When a person is a regular full-time employee of a single nonlicensed corporation, partnership, association, or single owner and that person only engages in property management activity for that single entity. This employee may engage in property management activity only. The employee may not engage in the sale, exchange, lease option, or purchase of the owner’s real property. The employee may manage property ranging from one residential unit to multiple apartment complexes. The employee’s compensation must be through regular paychecks, with proper federal and state tax withholding. In other words, independent contractor status is not allowed. If the individual holds a real estate license, the exemption does not apply.
  • When a person is a general partner for a domestic or foreign limited partnership. The person must be working for a limited partnership properly registered with the Oregon Secretary of State, Corporation Division. The general partner may engage in the sale, acquisition, exchange, lease transfer, or management of the limited partnership’s real estate without a license. If the individual holds a real estate license, the exemption does not apply.
  • Community Association Managers. Under Oregon law, a community association manager does not fall under the definition of professional real estate activity and does not have to be licensed by the Oregon Real Estate Agency. A community association manager will manage the common property and services of condominiums, cooperatives, and planned communities through their homeowners’ association. While a community association manager’s work is similar to that of a property manager, the community manager does not deal with tenants but does deal with owners of property within the association and its residents.
  • Vacation Rental Management. ORS 696.030 does not consider vacation rental management as a professional real estate activity. Vacation rental management deals with transient lodging, which does not require a real estate license.

 

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Categories: Real Estate