1.3 Montana License Types and Roles

Montana issues distinct real estate credentials, and the state exam expects you to distinguish their education requirements and authorized activities. The three core license types are salesperson, broker, and property manager.

Salesperson

A salesperson performs licensed real estate activities — listing, selling, leasing, and negotiating — only under the supervision of a broker who holds a supervising broker endorsement. A salesperson:

• Cannot operate an independent brokerage or hold client funds.
• Cannot maintain a trust account (the broker does).
• Must keep an active status by remaining affiliated with a supervising broker and carrying E&O insurance.

Education: 70 hours pre-license + the 12-hour Rookie course within 120 days of licensure.

Broker

A broker has completed additional education and experience and may operate independently, employ or sponsor salespersons, and maintain trust accounts. To become a Montana broker you must:

Not every broker supervises others; the supervising broker endorsement is the specific authorization to be responsible for affiliated salespersons, oversee their conduct, and maintain the brokerage trust account. A broker who only works personal deals need not hold the supervising endorsement, but a broker who sponsors salespersons must.

Property Manager

Montana issues a separate property manager license for those who lease, rent, or manage real property owned by others for compensation. Key points:

• Property management of others' property for a fee requires a license — either a property manager license or an active broker/salesperson license, depending on the arrangement.
• Property managers handle security deposits and rents, which are trust funds subject to trust-account rules (covered in Chapter 4).
• Property managers complete their own Board-approved coursework and exam pathway.

Exemption reminder: An owner managing their own property, or certain salaried employees managing their employer's property, generally do not need a property manager license — the same "for another, for compensation" test from MCA 37-51-103 applies.

Comparing the Roles

A recurring exam theme: only a broker (or property manager) maintains the trust account; a salesperson never holds client funds in their own name. Funds a salesperson receives — like earnest money — are promptly delivered to the supervising broker (or an authorized escrow/title company) for deposit.

Affiliation, Activation, and Transfers

Because a salesperson's authority is derivative of the broker's, status changes matter:

• Leaving a brokerage makes the salesperson's license inactive until they re-affiliate with another supervising broker.
• Changing brokers requires notifying the Board (through the DLI portal) within the required timeframe (Montana requires prompt notice — typically within 10 days of the change).
• A broker who loses their supervising endorsement cannot lawfully hold affiliated salespersons.

Exam tip: If a question describes a salesperson "opening their own office" or "holding earnest money in a personal account," both are violations — a salesperson cannot operate independently and cannot hold client trust funds.

Supervising Broker Responsibilities

The supervising broker is the linchpin of Montana's accountability structure. By holding the supervising broker endorsement, the broker assumes legal responsibility for the conduct of affiliated salespersons. Core duties include:

Because the broker is vicariously responsible, a salesperson's violation — a missed disclosure, a mishandled deposit, a misleading ad — can expose the broker to discipline as well. This is why brokers vet affiliations carefully and audit their salespersons' files.

Compensation Flows Through the Broker

A salesperson is paid by their broker, not directly by buyers or sellers. A licensee may not pay or receive compensation for licensed activity to or from an unlicensed person, and a salesperson may not accept a commission directly from a client outside the brokerage. Referral fees between licensees are permissible within the rules, but paying an unlicensed "finder" for procuring buyers is prohibited.

Exam tip: Trace the money. Commission flows client → broker → salesperson. Any arrow that skips the broker, or pays an unlicensed person for licensed work, signals a violation.

Reciprocity and Out-of-State Licensees

Candidates often ask whether a license earned elsewhere transfers to Montana. The general framework: Montana evaluates license recognition based on the applicant's existing licensure and may waive portions of the requirement (commonly the national exam portion) for an applicant who holds an active license in good standing in another state, while still requiring the Montana state portion and Montana-specific qualifications. Out-of-state brokers cooperating on a Montana deal must work through a Montana-licensed broker; they cannot independently perform licensed acts on Montana property without proper authority.

Exam tip: There is no blanket "my out-of-state license lets me practice in Montana." Expect the Montana state portion and Montana law to apply regardless of where a candidate was first licensed; the national portion is the part most likely waived through recognition.