Washington State Property Management Law as Applied to Real Estate Licensees

Home Builder with Retired

The Washington State Property Management Law as Applied to Real Estate Licensees has changed twice in the past two years. First the State tried the "one law fits all" approach but it proved to include a process that was too difficult to manage.

A real estate brokerage in Washington is now known as a Firm. A Firm can decide if they want to provide property management services and/or selling and listing services. If they choose to do property management, they must have a trust account.

For rent signProperty management places duties on the licensee to both the landlord and to the tenant. Among other obligations, the landlord is owed the duty of striving for profitability, the accounting of funds in collecting of rents and disbursement for maintenance and repairs, showing properties and securing tenants, making mortgage, tax, and utility payments, and in dealing with tenant problems. To the tenant the licensee owes the duty of providing a safe environment, and of seeing that the terms of the rental agreement are fulfilled by the landlord.

It was ruled, that since all licensees are managed by their broker for real estate activities, and because property management is a real estate activity, all agents managing property, including their own owned property must account for all finances through their Firms trust account. Firm owners and designated brokers objected and the law was changed.

Now, licensees may manage their own owned properties by keeping a separate trust account, but, in all dealings with their tenants they must exclude the Firm name and any mention that they are in fact a real estate broker.

law bookIt's confusing to say the least, for the licensees and for landlords and tenants.

If you are a licensee and your broker does not have a trust account for property management, you may not collect or disburse funds, or show property to or for a client.

If you are a licensee and own rental property, you must not give your tenants your real esate business card, nor should you have them meet you or deliver rents to your office. Your letters and emails to them should not have your Firm name included. This seems contrary to disclosure laws, but that is the way the State of Washington wants it.

If you've purchased a property as in investment, you should ask your realtor first if he is allowed to do property management, before asking him to engage in any actions which may be prohibited..

Good luck to all of us. Let it be further said, that I am not an attorney in any state. If you have questions, ask your designated broker.


Posted by





Glenn Roberts



Mitch Gover - Orlando, FL

Good afternoon Glenn.  Wow, that does seem a bit counter-intuitive for Realtors managing their own properties.  Sounds like one of those "If I tell you, then I'd have to kill you" things.  I can certainly see wanting to keep an individual Agent's funds for managing his/her own portfolio separate from the brokerage, but to not even be able to disclose their affiliation seems a bit over the top.  Thanks for the post.

Apr 14, 2011 09:39 AM
Glenn Roberts
Retired - Seattle, WA

Mitch - After getting everything else disclosed to a tenant, it does seem silly to begin concealing the fact that you are licensed. Who knows what they were thinking?

Apr 14, 2011 09:42 AM
Gerry Michaels
Glasswork Media Arts - Gettysburg, PA
GettysburgGerry Social Meida

Glenn, funny you should bring this up, we discussed it in our monthly board meeting today, not sure about is happen regarding the situation here in Pa

Apr 14, 2011 09:48 AM
Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate


We are seeing similar dynamics in NC, but I think I can give my business card to a tenant, among other things.

However, NCREC views property management and real estate brokerage as two divergent areas of expertise.

Apr 14, 2011 09:59 AM
Glenn Roberts
Retired - Seattle, WA

Gerry - If they come up with something better than here, I'd consider getting one of your "Gettysburg Addresses."

Apr 14, 2011 10:00 AM
Glenn Roberts
Retired - Seattle, WA

Mike - They certainly are divergent, but related. Housing, right? Like chimps and homo-sapiens? No, closer related than that.

Apr 14, 2011 10:02 AM
Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Not give them a business card with the firm name on it.  Come on Glenn, isn't just going a bit too far.  I mean they could be future buyers.  What about that? Every attempt to leave a stone unturned will ultimately still leave other stones unturned.

Apr 15, 2011 02:48 PM
Glenn Roberts
Retired - Seattle, WA

Charita - We all agree with you. But this is what was taught in the mandatory core class we take every two years for renewal. You have to distance the renter client from the Firm so that they do not hold the Firm accountable. (Total BS IMO)

Apr 15, 2011 03:07 PM
Mary Lockman
Windermere Real Estate Methow Valley - Winthrop, WA
Methow Valley Real Estate

I had to get my hiusband to do property management on our little rental next door, a few years back. The tenants were laughing thinking what in the heck but I tried to explain, the law is crazy for REALTORS sometimes.

Apr 21, 2011 03:20 AM
Glenn Roberts
Retired - Seattle, WA

Mary - it's all because we are special.

Apr 21, 2011 04:03 AM
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