In Colorado, a real estate broker’s license is required to legally operate as a property manager. Licenses require 168 hours of education, passing an exam, insurance and a background check. Exceptions exist for on-site managers.
Colorado Property Management License Requirement
In the state of Colorado, all individuals who are operating as property managers are required to obtain and maintain a real estate broker’s license when engaging in several enumerated economic activities.
According to Colorado state law, those who are “selling, exchanging, buying, renting, or leasing real estate, or interest therein, or…negotiating the purchase, sale, or exchange of real estate, or interest therein, or improvements affixed thereon” must be licensed by the state prior to the actions taking place.
Exceptions to Colorado’s Real Estate License Requirements for On-Site Managers
Yes, Colorado enumerates some noteworthy exceptions for on-site managers.
- Real estate broker’s license. A “salaried employee of an owner of an apartment building or complex who acts as an on-site manager” is not required to maintain a real estate broker’s license. This on-site manager (often called a landlord, informally) is able to execute lease terms on behalf of the actual property manager, who retains responsibility for their landlord’s actions when they interact with their licensed obligations. This exception only applies so long as the employee is performing so-called “customary duties” appropriate to their position, such as showing prospective renters an available unit or providing them basic information on the same.
- Power of Attorney functions. They are also allowed to help a prospective tenant fill out paperwork for a pre-determined lease and apply any other Power of Attorney functions expressly delegated to them in their employee contract.
Obtaining a Real Estate License in Colorado
Colorado places its licensing requirements for real estate operations into three general categories:- education, background checks and a real estate broker’s insurance.
In order to obtain a real estate broker’s license in Colorado, you’ll need to follow several steps (each of which are outlined on the state’s Department of Regulatory Agencies website).
To start this process, the state recommends that license applicants determine which of their education requirements applies to their position. While former brokers and reciprocity brokers (that is, brokers that hold a license in a different US state) are required to meet lower thresholds, new licensees are required to complete 168 total hours of education in this field. Most applicants meet this requirement by completing a degree in property management from an accredited university.
After providing the state with proof of your education qualifications, you’ll be required to take the state’s “Real Estate Broker’s Exam.” These tests are administered through a third-party vendor, who in turn require applicants to schedule their own examination date and time.
Background Check Requirements
Once your broker’s exam is completed, you’ll be required to submit for a fingerprint-based criminal history background check. While this can be accomplished through several vendors, the state will not automatically pass along a copy of the background check results (unless the applicant requests such actions be taken).
Applicants who wish to dispute any part of their background check results may do so, however.
Finally, to complete the process of being fully certified to receive a Coloradan real estate broker’s license, a prospective applicant will need to provide proof that they presently possess qualifying (real estate broker’s insurance). Among other policy requirements, qualifying insurance policies on this front must include E&O (error and omission) coverage, at the very least.
Once you have completed all of the steps listed above (for education, background checks, and insurance) you will be able to complete the online application for a Coloradan real estate broker’s license on the state’s Department of Regulator Agencies website.
Property Managers Required to Act as Landlords
According to the letter of Colorado state law, property managers are not automatically required to act as landlords.
However, many still chose to include a landlord within their staff in order to more efficiently streamline the process of recruiting and managing tenants at their properties. In these situations, a landlord acts on behalf of their employer, the property manager, and therefore may be responsible for carrying out specific obligations relating to the condition of managed properties enumerated under state law.
When a property manager chooses to act as their own landlord or chooses to hire another individual to fill this role, they are required (among numerous requirements) to keep their rentable properties in a habitable condition.
For example, a landlord in Colorado must ensure that their properties are properly waterproofed and provided for tenants with a reliable and safe source of electricity, water, heat, and plumbing. More information on the specific obligations levied against Coloradan landlords can be found here.
A crucial step in the process of starting your own property management business in Colorado involves learning the best places to seek out information that guides your year-to-year business practices.
For example, the Colorado Department of Regulatory Agencies acts as a home base for all current and prospective property managers, particularly when it comes to understanding the process of becoming certifiably licensed. Meanwhile, those looking to learn about their state and federal requirements of starting a business in Colorado should contact the Colorado Secretary of State’s office.
Finally, there are several pieces of legislation and regulatory material that prospective property managers in Colorado will find particularly illuminating. This includes Position Statement 42 from the Colorado Real Estate Commission, which provides specific details regarding the “customary duties” ascribed to non-licensed apartment complex managers.