At our Short Term Rental Association meetup this month, several participants asked whether or not a person has to be a “broker” to legally manage a short-term rental for another person. The short answer is: anyone doing any type of real estate leasing activity for another party (typically the owner) and being paid for it, must be either licensed as a salesperson and working under a broker or be a licensed broker.
Here’s the long answer:
Under the Michigan Occupational Code (MCL 339.2501), anyone engaged in a leasing activity for a fee must be licensed. This leasing activity is defined as “property management” in the Code. In other words, if you’re leasing someone else’s property other than your own and you’re being compensated for it, you must be a licensed real estate broker or salesperson under a broker.
Leasing activities would include any of the following activities:
Developing marketing/leasing plans
Advertising the property
Gathering leads on prospective tenants
Referring prospective tenants
Giving a copy of a lease to a prospective tenant
Giving information to a prospective tenant about an available unit
Showing a property
Closing a Lease (explaining a lease and getting the tenant to sign the lease)
In some cases, collecting rent might also be considered a leasing activity and would require a license. Any way you look at it, if a person can identify themselves as a leasing agent, they need to be licensed.
What isn’t considered “leasing”? Some activities that are not generally considered leasing are:
Receptionist duties (as long as they are not talking about the rental units to prospective tenants)
Secretarial duties
Clerical duties
Bookkeeping
Maintenance
With all that said, another attempt at changing the law on this is being made this legislative session. That bill, House Bill 4549, can be found here. However, it should be noted that this bill only applies and exempts certain employees of a property management company…not those directly involved with management and being hired by the owner.