“My brother lives out of state but has a home in Alabama that is currently being rented. He has asked me to manage the property in his absence. I am not a licensed [property manager]. Can I legally manage his rental home?”
– Dee from Gadsden, AL
The best simple answer to your question is this: “It’s complicated.” There’s a lot you can do for your brother vis-à-vis managing his rental home, but you have to know the rules that apply to professional property managers and make sure you adhere to them.
According to Alabama law, a property manager is “any person or company that, for compensation, engages in the lease or rental of real estate in Alabama, who offers real estate for rent or lease, who negotiates the rental or leasing of Alabama real estate or who lists, offers, attempts or agrees to list real estate for rental or lease.”
Notice that definition doesn’t include anything related to upkeep or maintenance. This means unlicensed Alabama property managers can take care of a property, make necessary repairs and ensure the gardening and landscaping has been done. As long as the property is rented, you restrict your role to that of a handyman and you don’t get involved in marketing or leasing the property, you shouldn’t have a problem.
Problems might arise if you get involved in marketing and leasing the rental home, or if you participate in negotiating a lease renewal. For those tasks you will need a license.
Most other states we’re familiar with allow landlords to hire someone to work directly for them on salary without a license being required as long as that worker isn’t paid any type of commission. Alabama doesn’t recognize that particular exception, though.
Alabama Code Section 34-27-2 spells out the exceptions to the rules requiring a property management license. Check out paragraphs 14(b) and 14(b)(1).
14(b) The licensing requirements of Articles 1 and 2 of this chapter shall not apply to any of the following persons and transactions:
14(b)1 Any owner in the managing of, or in consummating a real estate transaction involving, his or her own real estate or the real estate of his or her spouse or child or parent.
So, even as a sibling, you won’t qualify under this provision. However, paragraph (3) says the following:
“Persons acting without compensation and in good faith under a duly executed power of attorney authorizing the consummation of a real estate transaction.”
So, for example, if your brother signs a power of attorney document allowing you to act on his behalf, then you can handle the leasing and marketing of the property without a license. But you can’t do it for compensation. Again, other states often allow you to manage properties for a private individual without a license as long as you are on salary and not on commission. But Alabama isn’t one of them.