How to hire a property manager in California

Does a property manager need a license in California?

Usually, yes. The Real Estate Law defines a broker as a person who, for compensation or the expectation of it, does any of these acts “for another or others”: “Leases or rents or offers to lease or rent, or places for rent, or solicits listings of places for rent, or solicits for prospective tenants … or collects rents from real property” (Bus. & Prof. Code § 10131(b)). It is unlawful to act as a broker without a DRE license (§ 10130). A licensed salesperson can do this work only under a broker.

Who is exempt from the license requirement?

Section 10131.01 carves out a few groups, including:

• the resident manager of an apartment building, apartment complex or court, and that manager’s employees;
• managers of a hotel, motel or auto and trailer park;
• people who arrange or take reservations for certain transient (short-term) occupancies, as the section describes; and
• unlicensed employees of a property management firm who show units, hand out and accept applications, accept deposits and rent, give rental terms from an employer’s schedule and accept signed leases at an apartment building or complex, while supervised by the firm’s broker (§ 10131.01(a)(3), (b)).

An owner managing their own property does not need a license, because the definition covers acts done for others. If someone who is not a resident manager offers to manage your rentals for a fee, ask for their license number before anything else.

How do I look up a property manager’s license?

1. Open the DRE Public License Information page.
2. Search by the person’s name (last name, first name), the company name, or the license ID. A link on that page also lets you search brokers by office address.
3. Check that the license is a broker license (or a corporation licensed through a designated broker officer) and that it is current, and read any disciplinary history shown.
4. Make sure the name on the license matches the name on the management agreement and on the trust account.

DRE’s lookup page warns that unlicensed people sometimes use real licensees’ names and information. If the contact details on a listing don’t match what DRE shows, call the licensee at a number you find independently.

How must a property manager handle my rent and the tenant’s deposit?

A broker who accepts funds belonging to others must put them into the broker’s principal’s hands, a neutral escrow, or a trust fund account the broker maintains at a bank or recognized depository in California, and keep them there until disbursed according to the instructions of the person entitled to them (Bus. & Prof. Code § 10145(a)(1)). The broker must keep a separate record of the receipt and disposition of those funds (§ 10145(g)).

DRE’s regulations (California Code of Regulations, title 10, often called the Commissioner’s Regulations) add the recordkeeping detail. DRE lists three required records for each trust account: a record of all trust funds received and paid out (Regulation 2831), a separate record for each beneficiary or transaction (Regulation 2831.1), and a reconciliation of the two at least once a month, except in months with no activity, with a written record of each reconciliation (Regulation 2831.2; DRE trust fund records update).

What this means for you: your rent receipts and the tenant’s security deposit should not sit in the manager’s operating account. Ask which account holds your funds, who can sign on it, and whether you can see the monthly reconciliation for your ledger. DRE’s trust funds chapter explains the rules in plain terms.

What should a property management agreement include?

Get the agreement in writing and read it before you hand over keys. Look for clear answers to each of these:

• Management fee. How it is calculated (a percentage of rent collected, of rent due, or a flat monthly amount) and whether it is charged on vacant months.
• Leasing or placement fee. When it is earned and whether any part is refunded if the tenant leaves early.
• Renewal fee. Whether one applies when an existing tenant renews.
• Maintenance markup or coordination fee. Whether the manager adds a percentage to vendor invoices, uses in-house staff, or earns anything from vendors.
• Vacancy, setup, inspection, eviction-coordination and other fees. Every fee should be listed; anything not listed should not be charged.
• Repair approval limit. The dollar amount above which the manager must get your approval, and how emergencies are handled.
• Owner reserve. How much is held for bills, where it is held and when it is returned.
• Owner statements. How often you get statements, by what date, and what they show.
• Term and termination. How long the agreement lasts, how much notice either side must give, any termination fee, and how keys, records, the tenant’s deposit and your funds are handed over at the end.
• Authority. What the manager may sign or serve for you, including leases, rent increases and notices, and who will be named in the lease as authorized to manage and to receive notices, which the lease must disclose (Civ. Code § 1962(a)).

We don’t publish “typical” fee percentages: they vary by market, property type and services, and we have not found an official source for them. Compare written proposals from more than one licensed manager instead, and ask each to show the total you would have paid last year under their fee schedule.

What questions should I ask a property manager before hiring?

• Workload. How many doors (units) does each property manager handle, and who covers when they are out?
• Reporting. When does the monthly owner statement arrive, what does it show, and is there an owner portal with invoices and ledgers?
• Maintenance. What is the approval limit, do you mark up vendor invoices, and how do you choose and insure vendors?
• Response times. How fast do you answer tenants and owners, and is there a 24/7 line for emergencies?
• Screening and fair housing. Can I see your written screening criteria? How do you handle housing vouchers, criminal history and reasonable accommodation requests?
• Compliance. How do you check AB 1482 and local rent limits before an increase, count notice periods, and return deposits within 21 days?
• Evictions. Who decides to serve a notice, which attorney files, and what does it cost?
• Insurance. Do you carry errors and omissions (E&O) and general liability insurance, and will you send proof?
• Leaving. If I end the agreement, how quickly do I get the records, deposits and my funds?

The scorecard turns these into scored questions with objective anchors, so you can compare two or three candidates side by side.

What are red flags when hiring a property manager?

• No license on the DRE lookup, or the license is in a different name than the company you are signing with.
• Rent or deposits paid into a personal or operating account instead of a trust account.
• Fees that appear only after you ask, or an agreement that lets the manager add fees without your consent.
• No written repair approval limit, or vendor markups that are not disclosed.
• Promises such as “we only rent to certain kinds of tenants,” “no vouchers,” or steering applicants by family status or other protected characteristics.
• Pressure to sign a long agreement with a large termination fee before you have seen a sample owner statement.
• Vague answers about who files evictions or how notices are counted.

How does fair housing law apply to property managers?

California’s Fair Employment and Housing Act makes it unlawful for an owner to discriminate against or harass anyone because of protected characteristics, including race, color, religion, sex, gender identity, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status and genetic information (Gov. Code § 12955(a)). It also bars discriminatory advertising (§ 12955(c)) and covers anyone whose business involves real estate transactions (§ 12955(i)). The Civil Rights Department says the law applies to property management companies, tenant screening companies and real estate agents as well as landlords (CRD housing page).

“Source of income” includes housing vouchers such as Section 8 (§ 12955(p)). Your manager acts for you, so its screening practices matter to you. Ask for written criteria applied to every applicant, a reasonable accommodation process, and how criminal history is considered under CRD guidance.

Frequently asked questions

Which official sources should I read?

• Bus. & Prof. Code § 10131 (broker definition)
• Bus. & Prof. Code § 10131.01 (exemptions, including resident managers)
• Bus. & Prof. Code § 10130 (license required)
• Bus. & Prof. Code § 10145 (trust funds)
• 10 CCR § 2831.2, trust account reconciliation (via LII)
• DRE — Required trust fund records (Oct. 2026 update)
• DRE Reference Book — Trust Funds chapter
• DRE Public License Information (license lookup)
• Civ. Code § 1962 (manager and owner disclosures)
• Gov. Code § 12955 (housing discrimination)
• California Civil Rights Department — housing discrimination