How can I help my friend manage a property without a license

[Denis K.]

My friend in Colorado wants me to manage their property for a fee. In the State of Colorado for this type of business I would apparently need a license, which I am not planning to obtain for a while. My friend and I are in good relationship (fingers crossed, hopefully our business together is not going to ruin this) yet we both want to have something on paper between us. BTW I live in Colorado too.

My question is: what would be a possible arrangement between two of us to have me perform management function and be paid for it without violating the code?

I am not an expert in this but something that comes to my mind is this:

Would it be possible for my friend to setup an LLC, in which I may or may not be a member (that's an open question) and hire me as an employee for this company to manage his own property? Basically this breaks down into a few questions:

- With this arrangement will his participation in LLC, which manages his own property, be treated as "managing his own property" for legal purposes?

- Would my participation in that LLC negate this assertion? Would it be different if I own minority stake?

- Would my being employed by his company and reporting to him as CEO of that company allow me to effectively perform any functions that he delegates me? Meaning from a legal standpoint. 

I would appreciate a real advice and not suggestions like "Go get yourself a license" or "Go talk to your attorney" because I am doing this already and that's clearly the way to go yet I am looking for a viable workaround for the time being. Thank you!

[JD Martin]

I don't know the specific laws in Colorado, but generally you are going to be safe as long as:

1. You don't make independent determination on the tenant;

2. You don't make independent actions on default (eviction, etc)'

3. You don't act in a fiduciary manner (i.e. holding deposits).

If you clear those hurdles, then you can more or less be "contracted help", because your friend will be making the important decisions that would otherwise be made by a property manager. This leaves you with showing properties, processing applications to your friend, coordinating repairs, etc. Those are all things your friend could contract with anyone to perform that wouldn't make them the "property manager". 

You generally don't want to hold money, determine that the tenant is in default of the lease and act on it, or make the determination of initial tenancy. Those are all licensed events in most states.  Everything else will end up in some gray area, and as long as you are doing this "for a friend" and not intentionally circumventing licensing laws to operate as a professional property manager without license, you will probably be OK. I say probably because it's always possible for someone to file a complaint against you, but what you are and are not doing will go a long way towards whether the complaint goes anywhere.