Licensing - Property Management: Policy Issue
Overview
Occupational licensing requirements are typically enacted under the guise of improving quality or public safety, but this argument rarely holds up to scrutiny. Research conducted by the U.S. Department of Treasury (Treasury) has shown that tougher professional licensing regulations are not indicative of the quality of service being rendered.
In real estate, licensing requirements typically apply to agents and brokers who facilitate sales and purchases of property in exchange for a fee or commission. Some states extend these requirements to cover other real estate transactions, such as leasing, renting or managing rental property. Overall, licensure requirements drive up costs for consumers, act as a barrier to entry into the labor force and limit the mobility of individuals who possess a professional license.
NAA Position
Licensing requirements in the rental industry drive up the cost of doing business and limit a rental community’s labor pool without demonstrating an ability to improve quality of service. The National Apartment Association (NAA) urges lawmakers to reject proposals that require licensing of property management or leasing staff and instead consider more effective approaches such as encouraging voluntary certification like NAA’s extensive suite of industry credentialling.
As an Owner or Operator, How Does this Affect My Business?
In some states and jurisdictions, covered activities requiring licensure may include advertising property for rent, showing apartments, negotiating leases or lease terms or collecting rent. If a rental property manager or leasing agent engages in these activities, they could be subject to fees, registration and mandated continuing education. These additional requirements could impact day-to-day business operations in a number of ways, driving up training costs and lengthening the onboarding time for employees.
Contact Information
To learn more about this issue, please contact NAA's Public Policy team.
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