LLC and Self-Managing

[Cordell M.]

My dad, brother and I have an LLC for buy & holds & manage our own units.

My brother is an accountant/CPA, handles the finances.

To be a property manager in the state of PA, I'm of the understanding you need to have a Broker's license.  We were told by an attorney if we self-manage, we're technically managing the entity's property and not our own, as they are in the entity's name and not our personal names (though the three of us are the only members of the entity).  

While he was not discouraging of us self-managing and mentioned it as an informational item, I'm curious if there are other takes or understandings of this. I like the lawyer we've been working with, he owns several units of his own and is involved in a local REI group. But I know none of us are infallible (myself included). Our concern is having a large number of units (currently 12) in the future, and finding out we screwed ourselves by not getting a Broker's license; though we do not want to go through the process unnecessarily either.

Thanks you for your time,

Cordell

[Chris Martin]

C'Mon Man!

Pennsylvania Code: 35.202. Exclusions from the act

"The following categories of individuals and entities are excluded from the act and this chapter:

(1) An owner of real estate with respect to property owned or leased by the owner. In the case of a corporation or partnership, this exclusion does not extend to more than five of the partnership’s partners or the corporation’s officers, nor to the other employes of the partnership or corporation. "

As a member of the LLC you can manage the affairs of the company, and the above says that up to 5 of your members are "excluded from the act" (meaning chapter 35, PA REC.)

Keep in mind, there may be some other restrictions (e.g. small claims court, etc.) on company representation. But from the PA real estate commission standpoint, you are "excluded" from brokerage requirements when dealing with LLC property for your company.

@Steve Babiak may know about eviction court representation. I know in NC and other states, members can represent the company w/o an attorney.