Property management companies in Colorado must be licensed. However, there is no specific property management license. Instead, the Colorado Real Estate Commission requires property managers to hold a real estate broker’s license if they are involved in leasing, collecting rent, or managing properties on behalf of property owners. The state requires licensing to ensure property managers are knowledgeable about state real estate laws and regulations. Owners who own their properties and self-manage do not have to have a license, but they do need to follow all state and local rules and regulations associated with renting real estate.
Thirty years ago, a person did several days of class work and took a brief test to get a real estate broker license in Colorado. Most people passed. Those days are long gone. According to the Real Estate Commission, a person wanting to be a professional property manager will need to complete:
- Complete 168 hours of education, or,
- Possess a real estate degree from an accredited college or university majoring in real estate studies,
- Pass the national and state portions of the Colorado Real Estate Broker’s examination.
The national portion of the exam consists of 80 questions, while the Colorado portion has 74 questions. A passing score is 75 percent.
- Education requirements by hours
- Real Estate Law and Practice (48 hours)
- Colorado Contracts and Regulations (48 hours)
- Trust Accounts and Record Keeping (8 hours)
- Current Legal Issues (8 hours)
- Real Estate Closings (24 hours)
- Practical Applications (32 hours)
The person must complete 24 hours of approved electives such as property management. About 70 percent of people passed the test in 2023. In contrast, 74 percent of law school graduates pass the Colorado Bar examination. The applicants must submit their fingerprints to the Colorado Bureau of Investigation and the FBI for a criminal background check. Applicants submit their application to the Colorado Real Estate Commission with proof of education, examination results, background checks, and proof of errors and omissions insurance.
Why Is Licensing Required?
The state wants the property managers operating in Colorado to know current rental laws and regulations. Licensing protects the consumer in the following ways:
Tenant Rights
Over the last two years, the state of Colorado expanded tenant rights. The licensing process ensures that real estate professionals understand the rules and regulations of managing rental properties and tenants.
Trust Accounting
Tenants pay rent and security deposits to become leaseholders, so property management companies manage money that is not theirs. Colorado Real Estate Commission does random audits of property management companies’ books to ensure they are handling rents and deposits properly.
Rental Laws and Regulations
If printed, all the rental laws and regulations would be hundreds of pages long. The classwork makes sure applicants understand these laws. The penalties for not following these regulations expose property management companies and their owners to legal risks.
Tenants and real estate investors can check if a property management company is a licensed broker by going to the Department of Regulatory Agencies and typing the property manager’s name online. The person’s name will be listed, as well as the status of their license, who they work for, and if there are any complaints or disciplinary actions on record.
A seasoned professional, David Schmidt is the managing broker for DenCO Property Management. Owners who are considering putting their rentals under professional management should call DenCO. We have been in business since 1999 and manage 150 rentals in the DU, Washington Park, and other Denver neighborhoods. Call us at 303-722-9688 or click here to complete a Contact Us form.
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