Legal FAQs for REALTORS®
— Landlord-Tenant Issues
Property Management and Escrow Accounts
An agent in my office wants to begin a full-service property-management practice. Can she have her own trust account to collect and disburse security deposits, rents, and other funds? (Updated Jan. 27, 2015)
No. TREC rules make it clear that salespeople cannot have their own trust account. A broker may only authorize another license holder to withdraw or transfer funds from a trust account, but the broker herself remains responsible for all deposits to and disbursements from the broker’s trust account. Remember, a broker is responsible for all authorized acts of sponsored salespeople. You and your agent should review TREC Rule Section 535.146 before she begins her practice.
A friend of mine gets paid to manage other friends' properties. He says he doesn't need to have a real estate license to do this. Is this true? (Updated March 26, 2014)
It depends on what services your friend is providing in his property management. Under the Real Estate License Act, a license is required when a person handles the leasing of someone else’s property. Additionally, someone who controls the acceptance or deposit of rent for a single-family residential property on behalf of another person must be licensed.
A person controls the acceptance or deposit of rent if:
(1) The person has the authority to use the rent to pay for services related to management of the property; or
(2) The person has the authority to deposit the rent into a trust or bank account and sign checks or withdraw money from the account.
Legal Disclaimer: The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.
While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on TexasRealEstate.com. Any legal or other information found here, on TexasRealEstate.com, or at other sites to which we link, should be verified before it is relied upon.