Property management Company by owner

[Shalini Dawar]

Do i need any license if I start my own property management company in New Jersey to manage my investment properties?

[Earl White]

Hello Shalini:

You would not need a license if the real estate entity owning the property management company also is the same entity that owns the real estate. "The provisions of this article shall not apply to any person, firm, partnership, association or corporation who, as a bona fide owner or lessor, shall perform any of the aforesaid acts with reference to property owned by him." N.J. Stat. § 45:15-4. 

You are not the entity itself - but the entity itself cannot take any real word action without a human (at least with technology today!) and so any interpretation that would require to get you a license to act on behalf of the owning company does not make sense to me. 

You also cannot act as a broker or advertise/represent yourself as a broker, without a license. ("No person shall engage either directly or indirectly in the business of a real estate broker, broker-salesperson, or salesperson, temporarily or otherwise, and no person shall advertise or represent himself as being authorized to act as a real estate broker, broker-salesperson, or salesperson, or to engage in any of the activities described in R.S. 45:15-3, without being licensed so to do as hereinafter provided.) N.J. Stat. § 45:15-1.

That said, if you are an employee of a company and don't collect compensation, and you do not hold yourself out as a broker in any fashion - there may be situations on case-by-case basis you may not need a license for some tasks. ("A real estate broker, for the purposes of this article, is defined to be a person, firm or corporation who, for a fee, commission or other valuable consideration, or by reason of a promise or reasonable expectation thereof, lists for sale, sells, exchanges, buys or rents, or offers or attempts to negotiate a sale, exchange, purchase or rental of real estate or an interest therein, or collects or offers or attempts to collect rent for the use of real estate or solicits for prospective purchasers or assists or directs in the procuring of prospects or the negotiation or closing of any transaction which does or is contemplated to result in the sale, exchange, leasing, renting or auctions of any real estate . . ." [N.J.S.A. 45:15-3]. However, I would not recommend relying on this - better to be on the safe side of legal compliance.

You can also submit grey area questions directly to the New Jersey Real Estate Commission.

That said, if a company owns real estate, and another company is the manager of real estate, and that manager company gets some time of compensation or arguably holds itself out as doing the business of a broker, you would need a license or should get one to be on the safe side. Being a member of two companies is not an exception. This would be an end-run around real estate agency licensing law.