Property management business licensing in Texas

Texas real estate broker licensing requirements

The requirements for an entity to obtain a Texas real estate broker license are as follows:

• The entity must designate an active Texas real estate broker to act on behalf of the company. The designated broker can be an officer, manager, or partner of the corporation, LLC, or partnership. They must also be individually licensed as an active Texas real estate broker. They must also provide proof of the designated broker's current status as a managing officer, manager or managing member, or general partner for the business entity.
• If the designated broker owns 10% or more of the business entity, proof of ownership must be provided.
• If the designated broker does not own at least 10% of the business entity, they must maintain E&O (errors and omissions) insurance in the amount of $1 million.
• Your designated broker must have fingerprints on file with the Department of Public Safety (DPS) for TREC (Texas Real Estate Commission).
• You must also submit proof of current Franchise Tax Account Status, also known as “Certificate of Account Status, previously known as “Certificate of Good Standing”. (This must be issued within 21 days prior to the date of the application.) The Comptroller is required by law to forfeit a company's right to transact business in Texas if the company has not filed a franchise tax report or paid a franchise tax required under Chapter 171.
• You must complete the Texas Application for Broker License and pay applicable registration fees.
• Foreign business entities must supply proof that the business entity is licensed as a foreign broker — such as a real estate license history from the other state.

Both resident and non-resident entities have one year from the date of the application to meet all license requirements.

How often do you need to renew the real estate license for your business entity?

In Texas, you must renew your business entity real estate broker license every two years. You are also required to submit with the renewal your franchise tax account status and proof of ownership or E&O insurance for the designated broker. Non-resident business entities must also provide proof that it is licensed as a foreign broker, such as a real estate license history from the other state.

Do individual property managers need to be licensed in Texas?

The answer depends on what duties the property manager performs for the property owner. If the property manager gets paid to show or lease the property for the owner, an individual real estate broker license is required. A license is also required if the property manager accepts, or deposits rent from the tenant of a single-family residential property unit.

Note: If you operate a property management company and engage in leasing activity, the rental agent employee who solicits a prospect by phone must also be licensed.

CT Corporation can help

Outsourcing business registration and license research, applications, management, and renewals can help you take the pressure off internal resources. By working with a full-service management provider who specializes in the efficient processing of property management business licenses you can free up your staff to focus on high-value business activities while ensuring you keep up with changing compliance requirements.

For more information on CT Corporation services and how we can streamline your business licensing, please contact us.

Related resource: Real estate licenses