Property management requirements in Texas start with a license: anyone who leases property, collects rent, or markets rentals for someone else in exchange for compensation needs a real estate license from the Texas Real Estate Commission (TREC), unless a narrow statutory exemption applies. From there, the job runs on a stack of specific rules — trust accounts, security deposit deadlines, mandatory disclosures, repair duties, fair housing, and tenant screening — and getting any one of them wrong can cost a license, a lawsuit, or both.
When a License Is Required
Texas law treats property management as real estate brokerage. If you collect rent, negotiate lease terms, or market rental properties for another person and expect to be paid, you need a license under Occupations Code Chapter 1101.1State of Texas. Texas Occupations Code Section 1101.004 – Real Estate Brokerage Operating without one can lead to cease-and-desist orders from TREC and criminal penalties. Working as an unlicensed residential rental locator is a Class A misdemeanor under Section 1101.757.
A sales agent can perform property management duties, but only while sponsored by a licensed broker. The broker carries legal responsibility for the agent’s conduct, which means a mishandled deposit or a botched disclosure exposes the broker too.
Who Is Exempt
Occupations Code Section 1101.005 lists the exemptions. Read them narrowly, because they are narrower than most people assume.
- Property owners can lease their own property, collect rent, and handle maintenance without a license, and their employees can do the same on their behalf.2State of Texas. Texas Occupations Code Section 1101.005 – Applicability of Chapter
- On-site apartment managers who live at or work at a single complex and handle leasing for that complex are exempt. Take on a second, separately owned property and the exemption is gone.
- An attorney-in-fact acting under a power of attorney can handle up to three real estate transactions per year without a license.
- Court-appointed executors, guardians, and others acting under a court order or written trust instrument are exempt.
- Attorneys licensed by the Texas bar do not need a separate real estate license.
- General partners of a limited partnership, and managers or members of an LLC, can lease and manage property owned by that entity. Managing property owned by an unrelated party for a fee still requires a license.
Getting Licensed
Sales Agent
A sales agent license requires 180 classroom hours across six required 30-hour courses: Principles of Real Estate I and II, Law of Agency, Law of Contracts, Promulgated Contract Forms, and Real Estate Finance.3Texas Real Estate Commission. Become a Real Estate Sales Agent Applicants must then pass a state exam covering national real estate principles and Texas-specific law.
Before the first renewal, a sales agent must complete a total of 270 qualifying hours, which means adding 90 hours of Sales Agent Apprentice Education to the original 180.4Texas Real Estate Commission. Renew Your Sales Agent License Every two-year renewal after that requires 18 hours of continuing education, including Legal Update I, Legal Update II, and contract-related coursework.5Texas Real Estate Commission. Renewal Education Information
Broker
Broker licensure is a much larger commitment. Applicants need at least four years of active experience as a licensed agent or broker during the five years before applying.6Texas Statutes. Texas Occupations Code Section 1101.356 – Broker License The education requirement is 270 hours of qualifying real estate courses (including a 30-hour Real Estate Brokerage course) plus 630 hours of related education, for a combined 900 classroom hours.7Cornell Law Institute. 22 Texas Admin Code 535.56 – Education and Experience Requirements for a Broker License The 630 related hours can come from additional qualifying courses, TREC-approved continuing education, or accredited college coursework in fields like accounting, finance, law, or business. A bachelor’s degree or higher from an accredited institution automatically satisfies the 630-hour related education requirement.8Texas Real Estate Commission. Become an Individual Real Estate Broker
Trust Account Rules
Client and tenant money cannot sit in a manager’s personal or operating account. Under 22 TAC Section 535.146, a broker must hold all trust money in a designated trust or escrow account, or deliver it to an authorized escrow agent.9Cornell Law Institute. 22 Texas Admin Code 535.146 – Maintaining Trust Money Mixing client funds with business funds is commingling, and it can cost a broker their license.
Unless the parties agree in writing otherwise, trust money must be deposited by the close of business on the second working day after the broker receives it. The broker must keep records of every deposit and withdrawal, provide monthly accountings to each beneficiary when there has been activity, and retain all trust account documentation for at least four years from the date each document was created or received.
Security Deposit Deadlines
Security deposits are trust money, so the trust account rules apply. Property Code Chapter 92, Subchapter C adds its own requirements that trip up a lot of managers.
A landlord or manager must refund the deposit within 30 days after the tenant surrenders the property.10State of Texas. Texas Property Code Section 92.103 – Obligation to Refund If any portion is withheld, the landlord must send a written description and itemized list of the damages and charges justifying the deduction. The tenant is not entitled to the refund until they give a forwarding address in writing, but once they do, the 30-day clock starts.
The penalties are steep. A landlord who wrongfully withholds part of a deposit is liable for $100 plus three times the amount wrongfully withheld, plus the tenant’s reasonable attorney’s fees. A landlord who skips the written itemization entirely forfeits the right to withhold anything and still owes attorney’s fees. And if a landlord fails to return the deposit or provide the itemization within 30 days, the law presumes bad faith, shifting the burden to the landlord to prove the retention was reasonable.11State of Texas. Texas Property Code Section 92.109 – Liability of Landlord
Required Disclosures
Information About Brokerage Services
At the first substantive communication with a party about a specific property transaction, a license holder must provide the Information About Brokerage Services (IABS) form.12Texas Real Estate Commission. Information About Brokerage Services Form The form explains the different representation relationships a license holder can have in a real estate deal. Skipping it or delaying it is a common source of TREC complaints.
Consumer Protection Notice
Every broker must display the Consumer Protection Notice in a readily noticeable location at each place of business. On the firm’s website, a link to the notice must appear on the homepage in at least 10-point font, or 12-point if using the abbreviated “TREC Consumer Protection Notice” text.13Texas Real Estate Commission. Updated Consumer Protection Notice Now Required The notice tells the public how to file a complaint with TREC and describes the Real Estate Recovery Trust Account, which can compensate consumers who suffer financial losses from a license holder’s misconduct.
Ownership and Management
Under Property Code Section 92.201, a landlord must disclose the name and address of the record title holder and any off-site management company primarily responsible for the property. A written tenant request must be answered within seven days. A landlord can also satisfy the requirement in advance by posting the information conspicuously at the property or by including it in the lease or written rules.14State of Texas. Texas Property Code Section 92.201 – Disclosure of Ownership and Management If ownership or management changes mid-lease, update the information so tenants can reach someone during emergencies or when pursuing legal remedies.
Lead-Based Paint
Federal law requires anyone leasing residential property built before 1978 to disclose the presence of any known lead-based paint hazards, provide copies of available reports or assessments, and give prospective tenants an EPA-approved pamphlet.15Office of the Law Revision Counsel. 42 USC 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property Property management agents have an independent obligation to ensure the owner complies. The rule applies to leases as well as sales, with no exception for small landlords or renovated properties.
Repair and Maintenance Duties
Property Code Section 92.052 requires a landlord to make a diligent effort to repair conditions that materially affect the physical health or safety of an ordinary tenant, and to keep hot water systems functioning at a minimum of 120 degrees Fahrenheit.16State of Texas. Texas Property Code Section 92.052 A property manager acting on the landlord’s behalf inherits these obligations.
The duty is triggered when the tenant gives notice specifying the condition and is current on rent. If the lease is in writing and requires written notice, the tenant’s request must also be in writing. The landlord is not responsible for damage caused by the tenant, their household members, or their guests, and the statute does not require the landlord to furnish utility service from companies whose lines are not reasonably available, or to provide security guards.
For managers, the practical safeguard is clear contract language with the owner: who can authorize repairs, what dollar limit the manager can approve without prior sign-off, and how emergency repairs get handled. Waiting on owner authorization for a health-and-safety issue can expose the owner to statutory liability the manager will hear about later.
Fair Housing and Tenant Screening
The federal Fair Housing Act prohibits discrimination based on race, color, religion, sex, national origin, familial status, and disability.17Office of the Law Revision Counsel. 42 USC 3604 – Discrimination in the Sale or Rental of Housing It reaches advertising, tenant selection, lease terms, maintenance priorities, and effectively every management decision that could treat protected groups differently.
Assistance Animal Requests
In May 2026, HUD issued an enforcement guidance memo that changed how it handles assistance animal complaints under the Fair Housing Act. HUD canceled its prior guidance documents that had broadly protected emotional support animals and adopted the ADA’s trained-animal standard: an animal must be individually trained to perform work or tasks directly related to a person’s disability. General comfort or companionship no longer qualifies under HUD’s enforcement framework, and the earlier presumption that landlords must waive no-pets policies for untrained ESAs is gone. HUD will still recognize trained animals other than dogs, unlike the ADA, which limits service animals to dogs.
The change applies only to Fair Housing Act complaints at the federal level. It does not override state or local laws that may still provide broader ESA protections, and it does not affect Section 504 of the Rehabilitation Act. Reflexively denying ESA requests based solely on the HUD change can create liability under those other frameworks, so review any accommodation policy with a housing attorney before changing it.
Adverse Action Notices
When a manager uses a credit report, criminal background check, or other consumer report to make a rental decision, the federal Fair Credit Reporting Act applies. If the manager denies an application, charges higher rent, or requires a larger deposit based on information in that report, the applicant must receive an adverse action notice.18Office of the Law Revision Counsel. 15 USC 1681m – Requirements on Users of Consumer Reports The notice must include the name, address, and phone number of the consumer reporting agency that furnished the report, a statement that the agency did not make the decision, and information about the applicant’s right to obtain a free copy of the report within 60 days and dispute any inaccuracies. The FCRA applies regardless of the size of the operation, which is why smaller landlords miss it most often.
The Property Management Agreement
The written agreement between owner and manager defines the legal boundaries of the relationship. Texas law does not prescribe a mandatory form, but a few elements matter enough to name here.
Scope of authority should be explicit: whether the manager can sign leases, screen tenants, and authorize repairs up to a specified dollar amount without prior approval. Fee structure should spell out the monthly management percentage, leasing fees for placing new tenants, and charges for services like coordinating evictions or overseeing capital improvements. Termination provisions should state the notice period (commonly 30 to 90 days), any early termination fees, whether the contract auto-renews, and what happens to security deposits, collected rent, and maintenance reserves when the relationship ends. Insurance obligations, including errors and omissions coverage that protects against claims arising from lease administration, tenant screening, or maintenance decisions, should be addressed in writing so neither side is guessing after a claim comes in.