Written for landlords, property managers and short-term rental hosts across the US, with state detail for California, Texas, New York and Florida.
The short version
- Get a broker license or work under one.Managing other people's rentals for a fee is brokerage in most states. Name the broker of record on every management agreement.
- Keep owners' money in a trust account.Rents and deposits sit in the broker's name for the owners, never mixed with your operating money.
- Reconcile bank and ledgers every month.Bank, owner and tenant ledgers must agree before statements go out. Cover any shortfall from operating funds at once.
Many owners start by managing a friend's rental, then a few more. At that point the business is usually doing licensed work, and the money it holds is not its own.
Managing for others is brokerage
Leasing, rent collection or management for others for a fee is brokerage in most states, so it needs a real estate broker license or work under a broker. An owner managing its own units, and its direct employees, are usually exempt. An unlicensed manager may be unable to sue for its fees. As of Oct 2026.
California Business and Professions Code 10131(b); Texas Occupations Code 1101.002; New York RPL 440; Florida chapter 475
Name the broker of record on every management agreement and every exclusive leasing listing. Leasing agents who show units and negotiate leases for others often need a license too, or must work under the broker.
Trust money
Rents and deposits go into a trust account in the broker's name for the owners, never mixed with operating money, and are reconciled monthly to the owner ledgers and the bank. A shortfall is a license case and often a fidelity claim. As of Oct 2026.
For example California 10 CCR 2831.2; Florida chapter 475 and FREC rules
For example, a Florida company that finds an $8,000 shortfall at the monthly reconciliation has the broker cover it from operating funds immediately: one owner's money never pays another.
If you run short-term rentals
Local law decides. Most large cities require registration or a permit and tax the stays. In New York City, stays under 30 days need registration, the host must live there and be present, with at most 2 guests, and platforms will not book unregistered listings. State and local occupancy taxes apply (for example Texas's 6% state hotel occupancy tax plus local rates, and Florida's 6% state transient rental tax plus county tourist taxes), and platforms collect some but not all of them. As of Oct 2026.
The safety duties that come with the keys
Lead in pre-1978 housing
Give the EPA pamphlet and the lead disclosure form, with any known reports, before the lease is signed, and keep the records 3 years. A tenant can recover three times actual damages. Repairs disturbing more than 6 sq ft inside or 20 sq ft outside need an EPA-certified renovation firm using lead-safe practices. As of Oct 2026.
42 USC 4852d; 24 CFR Part 35; 40 CFR 745 Subparts E and F
- Smoke and carbon monoxide alarms are set by state and city codes (for example California Health and Safety Code 13113.7 and 17926, Texas Property Code 92.255, New York Executive Law 378). Test them at move-in and record it.
- Visible mold can make a California unit substandard, NYC requires annual inspection for mold and pests, and California requires bed bug disclosures to new tenants. Fix the cause, document it and respond in writing.
- Local registration: the Los Angeles rent registry for covered units, NYC's annual HPD registration, and rental licensing with periodic inspections in many cities. In some cities missing registration can bar rent increases or eviction filings.
Insure the business, not just the buildings: errors and omissions, general liability, employment practices, a fidelity or crime bond for trust funds, and cyber with social-engineering cover. Wire and ACH fraud on owner payouts is the costly loss, so confirm any bank change by phone to a known number.
Your software's trust-accounting reports should reconcile every month before owner statements go out: bank, owner and tenant ledgers, and statements, all three agreeing.
Asked in Greymill
Then note why it happened.
Bigger problem: no license. Managing or collecting rent for others for a fee is brokerage in most states, Florida included (As of Oct 2026).
You need a broker license, or to work under a broker.
Unlicensed, you may be unable to sue for your fees.
The money isn't yours. Rents and deposits belong in a trust account in the broker's name, for the owners, never mixed with operating money.
Every month, check that the bank, owner ledgers and tenant ledgers agree before statements go out.
Common trap: managing your own units is usually exempt. Managing a friend's for a fee already counts as managing for others.
Shall I build your monthly compliance checklist, starting with that reconciliation?
Ask it about your own business
Paste this into Greymill with your own figures, and Rules & Licensing works it through for your business.
I run a property management business in [state], in the US. We manage [number] doors for [number] owners, under [broker of record, or none]. We hold rents and deposits in [describe the accounts]. Check what licensing applies to us and our leasing agents, what our trust account must look like, and build a monthly compliance checklist covering reconciliation, lead disclosures for pre-1978 units, alarm checks and any registration or short-term rental permits in [city].
More for property management and rentals in the US
- Raising rent to market without breaking a rent capIn capped states and cities the legal maximum, not the market, sets this year's increase, so check the cap and the notice period before you price.Read the lesson
- Will this building still cash flow after the loan, taxes and reserves?Lenders and buyers judge a rental on NOI and DSCR, so work them out the way they do and run a 13-week cash view alongside.Read the lesson
- Why can't I use my rental loss, and am I depreciating it right?Rental tax turns on depreciation you must take, losses you may not be able to use yet, and deadlines on 1099s and exchanges.Read the lesson
- Lease clauses and deposit mistakes that cost owners doubleSome common lease clauses are void, and getting a security deposit wrong at move-out can cost two or three times the amount.Read the lesson
- Paying a maintenance tech, a leasing agent and an on-site manager the right wayProperty management roles carry their own traps: the full-time 1099 handyman, the unlicensed leasing agent and the free apartment counted as pay.Read the lesson
- Winning owners and filling units without a fair housing problemOwners buy lawful screening, deposit compliance and clean trust accounting, and every listing and screening step has to follow fair housing law.Read the lesson
- A tenant has stopped paying: the notice, the count and the court in your stateNonpayment cases fail on the notice: the wrong number of days, the wrong delivery method, or a federal notice you did not know applied.Read the lesson
Open the interactive lesson · Every property management and rentals lesson · What Greymill knows about the trade
Sources
The primary sources behind this lesson, checked Oct 2026.
- B&P 10131(b); Tex. Occ. Code 1101.002; RPL 440; Fla. Stat. 475.01 (Property management practice: licenses, trust accounts, agreements)
- 1101.005; 1101.806(b) (Property management practice: licenses, trust accounts, agreements)
- 10 CCR 2831.2 (Property management practice: licenses, trust accounts, agreements)
- RPL 238-a(2); Prop. Code 92.019 (Property management practice: licenses, trust accounts, agreements)
- 1770(a)(29) (Property management practice: licenses, trust accounts, agreements)
- 16 CFR 464.1 (Property management practice: licenses, trust accounts, agreements)
- 40 CFR 745.107, 745.113, 745.118; 42 USC 4852d(b) (Habitability, lead and local inspection)
- minor repair definition (Habitability, lead and local inspection)
- H&SC 13113.7, 17926; Prop. Code 92.255; NY Exec. Law 378 (Habitability, lead and local inspection)
- H&SC 17920.3(a)(13); Civ. Code 1954.603 (Habitability, lead and local inspection)
- registration (Habitability, lead and local inspection)
- penalties (Habitability, lead and local inspection)
- 2775(b)(1) (People: contractors, wages, leasing agents and I-9)
- FLSA 29 USC section 207(a); California Labor Code section 510(a) (People: contractors, wages, leasing agents and I-9)
- 531.3 (People: contractors, wages, leasing agents and I-9)
- employer coverage (People: contractors, wages, leasing agents and I-9)
- 274a.2(b)(1)(i)(A), (ii) (People: contractors, wages, leasing agents and I-9)
- 4980H(a), (c)(2) (People: contractors, wages, leasing agents and I-9)
- Rule 61J2-14 (Hard cases: rent increases, deposits, late fees and screening)
- 15 U.S.C. 9058(c)(1); Property Code 24.005(c-1) (SB 38 s4) (Hard cases: rent increases, deposits, late fees and screening)
- 44 CFR 61.11(a) to (d) (Insurance and risk)
- 4013(b)(2), (3) (Insurance and risk)
- page updated September 28, 2026 (Insurance and risk)
- 83.49(2) (Operations and software)
- GOL 7-108; 83.49; 1950.5; 92.103 (Operations and software)
- 1954.603 (Operations and software)
- 92.006 (Contract red flags)
- 1950.5(m) (Contract red flags)
- 100.204 (Contract red flags)
- due dates (Cash, lending and bookkeeping)
- requirements (Short-term rentals)
- rate (Short-term rentals)
- transient rentals (Short-term rentals)
- IRC section 280A(d) and (g) (Short-term rentals)
- 1.469-1T(e)(3)(ii)(A) (Short-term rentals)