Hey, this is Danny Naylor, and I wanted to give you a quick update on some of the property management rules. I recently attended the Utah Division of Real Estate Caravan, which is where the staff and leaders of the Division of Real Estate, like the director and the Director of education and the investigators, come together and give us a legal update on new laws and rules that have changed over the last year. And they travel all over the state to do it.

It was really a great event. I’m really thankful for Leigh Veillette, Laurel North, and others who were there to share their updates on what’s changing in the real estate industry here in Utah. Really great job, and I’m really excited to share just a few things with you.

Scheduled Release of the New License

Speaking about property management specifically, there are a couple of changes. One is that we’ve been looking ahead and the new property management license is still scheduled to come in 2027. We had that originally scheduled to come out 2025, but they had to put it off because there were more updates that were needed. 2026, this last legislative session, they were able to get the final laws written. And now, they’re working on just the updated rules from the division. Those aren’t finalized yet, we’re still waiting on those, but they are scheduled to have the new property management license available starting in 2027 in the Utah Real estate market.

Do You Need a New License?

For real estate agents that already have a license a really big question is, “Can I keep doing property management or am I going to have to get an entirely new license?” And you do not need to get a new license. They wrote the law in such a way that the existing real estate license with property management still is in effect. So, if you have a real estate license, a sales agent, or Utah broker license, and you’re doing property management, you can still continue to run your business like you did before.

They didn’t change the existing licensing requirements for that, they’re just adding an additional license for people who only want to do property management. So that’s a step toward separating those industries in a way that will hopefully serve the property management industry better. But it does allow real estate agents, licensed brokers, and sales agents to continue to do property management the same way that we always have.

So, existing licenses can still do property management. They decided the new property management license was only going to be for residential property management. That means it doesn’t apply if you’re managing commercial properties like retail leases or a big office building. But it will apply to apartment complexes, duplexes, triplexes, single family home rentals, all of those residential rentals that a property manager would deal with. So that’s what the new property management license is for. Residential properties.

Having Both Licenses

So, we said that if you have a real estate license you can still do property management. But if you decide to also get a property management license separately so you have both, the rule says that because you have that real estate license, if you do property management, you need to be under your broker. So having the real estate license means you have to do your property management with your broker, because those rules are still in effect like they were before.

So, a real estate agent will not be able to get another property management license separate from their real estate license and do property management for other people separate from their brokerage. If you have a real estate license and you’re doing property management, it has to stay with your brokerage. You can’t be doing both at the same time. The new property management license is mostly for people who don’t have a real estate license. So, if you have a property management license but you also have real estate license, you need to keep doing your real estate under your broker.

Exemptions and Unique Cases

There is an exemption. If you’re an employee of a business that has 750 or more units, then you won’t need a license unless you are doing real estate. And so, if you are a W-2 employee of a property management company that is managing more than 750 units, you won’t need to get a property manager license to continue as an employee for that company. That’s something they may flesh out a little more in the rules, but that’s where it is at the moment.

Also, if you’re employed by a housing authority then you don’t need to affiliate with a broker with your property manager license.

Some additional things: Employees will now need a property manager license if they do property management. It used to be that if you were an employee of a company that owned property, you would not have to have a property management license. But they are specifying now that if I’m an employee of a property management company and we’re doing property management for clients, then I will need to have a property manager license in those situations. More details to come with the new rules that they’re working on.

If you’re looking for the exemptions for when you don’t need a property management license, there are two code sections in the real estate law that outline those exemptions, 202 and 202.5. And a lot of those are the same as they used to be, where if you own your own property, you can manage your own property without a license.

I believe they still have the resident property manager rule. If you live in an apartment and you manage the apartment for the owner, living there and managing just for reduced rent, then you still don’t need a property manager license. Those types of exemptions that existed before still apply.

There is a thing where the new property manager license doesn’t have a property manager and principal broker manager over the property manager license. They haven’t done that like they have in real estate with sales agent and broker, but every property management company will need to designate somebody to be the principal property manager. So, it’s the same license, a property manager license, but one of those will be the principal property manager, and they will be responsible for all the management in the company. It’s a little similar to the way a principal broker manages an entire sales brokerage and all the agents work for him, but it looks like it will be the same license and not a separate license.

Common Questions

There were a lot of questions about homeowners associations and whether they need to have a property manager license, but it’s slightly different because the homeowners association aren’t technically managing the property, they’re managing the association. And so, as of right now, the property manager license does not apply to homeowners associations. So homeowner association management companies do not follow under the property manager license that’s going to come out. That will be a separate thing. You can learn more about homeowners associations and how they are regulated at the Homeowner’s Association Ombudsman Office.

And the final question that often gets asked is, what about rentals that are 30 days or less? Those short-term rentals, homes that are leased on Airbnb or Vrbo or any kind of short-term leasing that’s less than 30 days. That type of property management does not require a real estate license or a property manager license. And so, that type of activity is still not under this new property manager rule.

Hopefully those updates are helpful. When the new laws and rules come out, we will get you updated on those. I’ve been working with the Division of Real Estate to help write the new education for property managers for the new license exam for property managers, and hopefully we’ll see that come together. A really great team put that together and I was grateful to be a part of it. And so, we’ll wait and see what those laws are.