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Is your Property Management Business Headed to Florida?

Property Management Regulations in Florida: CRE and Multifamily Properties

The commercial real estate market in Florida is booming. Investors continue to purchase commercial real estate and multifamily properties across the Sunshine State. Most investors then hire a property management company to oversee day-to-day operations at each location.

All CRE and multifamily property management companies in Florida must follow applicable real estate laws. The Florida Real Estate Commission (FREC) requires property management companies to be under the supervision of a licensed real estate broker.

The regulations for CRE and multifamily properties differ from state to state, so even if you’re familiar with another state’s rules, you should get to know Florida’s state-specific laws. Failure to comply with these guidelines could result in fines, reparations, or criminal charges.

We’re here to help you understand Florida’s property management rules and to show you how Designated Broker Solutions can help you save time and money in the future.

Property Management Regulations in Florida

Like many other states, Florida requires property managers to be licensed real estate brokers in most instances. That’s because property management companies perform “real estate activities” as defined by Florida real estate licensing laws. Such activities include accepting and reviewing applications, managing leases, collecting rent, and showing the property to potential tenants.

However, Florida law differs slightly from other states because of the high number of rental properties. Investors and property managers should know and understand these variances. Failure to comply is illegal, and it’s costly.

Residential and Multifamily Property Management Considerations

Just like in many states, Florida law requires property managers to be licensed real estate brokers in most cases. Florida also has unique requirements for short-term rentals and vacation homes.

According to the Florida Department of Business and Professional Regulation (DBPR), any person who leases, rents, or sells properties on behalf of another party for compensation must be licensed by the DBPR and the FREC. These laws apply to both transient properties (those leased for 30 days or less) and non-transient properties (those leased for over 30 days). Property managers overseeing multifamily properties must hold a valid real estate broker license from the state of Florida, with one exception. If an individual is hired as a property manager by the owner is paid a full-time salary and does not receive a commission or other transactional payments, the manager does not need a broker license. Property Management firms receiving a property management fee, however, must be licensed.

Other activities may also require a broker’s license, such as:

· Advertising a short-term rental or vacation home on behalf of an owner.

· Listing a timeshare or vacation property for rent.

· Accepting payment for a property (including short-term rentals) on behalf of the owner or another party.

Under Florida law, property managers can either be licensed real estate brokers, or real estate salespersons or licensed community association member working under the direction of a brokerage firm.

Commercial Real Estate Management in Florida

Florida does not have a separate licensing requirement for CRE property managers. Those managing commercial real estate on behalf of another party must comply with all real estate commission licensing requirements.

All real estate activities require a broker license. These activities include, but are not limited to, advertising or marketing, appraising value, accepting and approving applications, collecting rent or negotiating leases.

Consequences of Non-compliance

Managing multifamily, short-term rental, or commercial real estate properties in Florida without a valid brokers license is a third-degree felony. It could result in the following:

· Up to five years in prison

· Up to five years probation

· $5,000 in fines

How Designated Broker Solutions Can Help

Florida’s property management regulations are complex and not entirely cut and dry. Failure to comply with the state’s licensure laws is a felony, resulting in possible jail time.

Property management companies in Florida will need a licensed broker to ensure compliance. Having an in-house employee take on this role is time-consuming and expensive. To become a licensed broker, applicants must:

· Be a licensed real estate salesperson for at least 24 months under the direction of a real estate broker.

· Complete 72 hours of Florida Real Estate Commission-approved coursework.

· Complete a background check and fingerprinting.

· Take and pass the Florida Real Estate Broker exam.

· Complete 60 hours of post-licensure training.

It’s costly, but the costs of non-compliance are even higher.

We have a better solution.

Designated Broker Solutions is a third-party company with licensed brokers who will work to keep everything running smoothly. We are licensed in 27 states, including Florida. We’ll get to work right away, ensuring all properties meet the Florida commercial real estate requirements. We also monitor your properties to make sure they stay compliant in the future.

Our team of licensed brokers handles the paperwork. We train your local staff to make sure they know and understand the local laws and regulations. For a small monthly fee, we will monitor your property management company, keeping you compliant with all Florida real estate laws.

Ready to learn more? Contact us today for a free consultation.

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