How Washington Regulates Property Managers

LearnFacts checked November 8, 2026Reviewed by Gary E. Wilson, President and Designated Broker

Property management counts as brokerage

Washington's real estate license law folds property management into "real estate brokerage services." Under RCW 18.85.011, that term covers leasing and renting real estate for another person for compensation, collecting or holding money tied to a lease or rental, and "performing property management services."

The law spells out what property management includes: marketing, leasing, renting, the physical, administrative or financial maintenance of real property, or supervising any of those tasks. If someone does that work for you and expects to be paid, the licensing rules usually apply.

The stakes are real. RCW 18.85.331 makes it unlawful to act as a broker or real estate firm without a license, and it bars an unlicensed person from suing to collect a fee. Acting without a license is a gross misdemeanor under RCW 18.85.411.

Who holds which license

A property management company is licensed as a business, and the people who do the work are licensed under it. Each broker's license is tied to a firm, and a license that is not affiliated with any firm is inactive. Here is how the roles fit together under RCW 18.85.011 and RCW 18.85.091:

• Real estate firm: the licensed business entity, such as a corporation or LLC, that offers brokerage services. To get a firm license, the firm must name a managing broker as its designated broker.
• Designated broker: a managing broker with a controlling interest in the firm whose license carries a "designated broker" endorsement. This person is responsible for the firm's licensed activity.
• Managing broker: a licensed person who works for the firm and may supervise other brokers.
• Broker: a licensed person who works for the firm under the supervision of a designated or managing broker.
• Unlicensed staff: RCW 18.85.151 lets people employed or retained by the owner or a broker do limited tasks, such as showing a unit under direct instruction, handing over or receiving applications and leases, receiving payments made out to the firm or owner, and clerical or maintenance work.

What the designated broker answers for

The designated broker is the person the state holds responsible. Under RCW 18.85.201, responsibility for the conduct of the firm's brokers rests with the designated broker. RCW 18.85.275 adds that management agreements belong to the firm, not to the individual broker you met.

The Department of Licensing rule on designated broker duties, WAC 308-124C-125, lists the day-to-day side. It includes making sure trust accounts are reconciled every month, that monthly trial balances are complete and in balance, that everyone doing brokerage work for the firm is licensed, and that the firm cooperates with state audits and investigations.

At Wilson Management, Inc., Gary E. Wilson is President and Designated Broker, and the About Us page labels him "Designated Broker Gary E. Wilson, WA licensed." You can confirm any firm's designated broker the same way you confirm the firm: on the state lookup.

How your money is supposed to be held

Money a licensee controls in a real estate transaction, such as your rent and your tenants' deposits, counts as trust funds under RCW 18.85.285. They must be kept separate from the firm's own money, in a recognized Washington state depository.

The trust account rules in chapter 308-124E WAC add detail. Funds go into the firm's trust account no later than the next banking day after they arrive, and every client gets a separate ledger. For property management, WAC 308-124E-115 says a tenant's security deposit cannot be paid out to the owner or anyone else before the tenancy ends without the tenant's written agreement.

A separate rule, WAC 308-124D-215, requires a written management agreement signed by the owner and the designated broker. It must state the firm's pay, whether the firm can collect and spend funds, whether it can hold deposits, and how often you get a summary statement. The management agreement guide walks through those clauses.

How to check a manager before you sign

A few minutes of checking can tell you a lot. Most careful owners do this:

• Search the firm and its designated broker on the Department of Licensing license lookup. You can search by name, license number, license type or location, and it shows whether a license was issued, whether it is active, and when it expires.
• Ask for a copy of the management agreement before your meeting, and check that it covers the items the state rule requires.
• Ask where tenant deposits are held. Under RCW 59.18.270, the tenant must get written notice of the name, address and location of the depository.
• Ask how often you will get a statement and what it shows.

If something goes wrong

The Department of Licensing takes complaints online, by email or by mail, and it can reprimand, fine, suspend or revoke a license. Its complaint page is clear that it cannot recover money or award damages. Grounds for discipline in RCW 18.85.361 include converting client money and taking an undisclosed commission, rebate or profit on money spent for a client. Under that section, failing to return money within 30 days after the owner is entitled to it and demands it is prima facie evidence of conversion. It also requires a firm and its designated broker to keep transaction records for three years.

For leasing, Washington's agency law also applies. RCW 18.86.030 requires a broker to use reasonable skill and care, deal honestly and in good faith, and account in a timely manner for all money received. That chapter treats a landlord as the "seller" and a tenant as the "buyer" in a rental transaction. For more on comparing firms, see how to choose a property manager in Washington.