5.1 Property Management & Landlord-Tenant Law (RSA 540 / 540-A)

Property management requires a license — and escrow discipline

In New Hampshire, performing property management for another person for compensation — listing rentals, negotiating leases, and especially collecting rent — is a licensed real estate activity under RSA 331-A. A salesperson manages under a principal broker, and all money collected on an owner's behalf (rents, security deposits, fees) is client money. It must go into the brokerage escrow/trust account, kept separate from the broker's own funds, exactly as earnest money is handled (see the escrow section). Commingling owner or tenant funds with operating money is a disciplinable offense.

Property managers also have to know the landlord-tenant rules in RSA 540 (eviction/possession) and RSA 540-A (prohibited practices and security deposits), because they administer them every day on the owner's behalf.

Security deposits — RSA 540-A:6

The security-deposit rules are the single most tested property-management topic, and the numbers are precise.

Memorize the cap phrasing: it is "one month's rent or $100, whichever is greater" — not "two months," and not a flat dollar number. A landlord who demands two months' rent as a security deposit on a standard residential tenancy has violated RSA 540-A.

Prohibited practices and the eviction process

Prohibited "self-help" practices — RSA 540-A:3

New Hampshire flatly bars landlords from using self-help to force a tenant out. Under RSA 540-A:3, a landlord may not:

• Lock out a tenant or change the locks to deny entry;
• Shut off or cause to be shut off heat, water, light, electricity, or other essential services;
• Remove the tenant's belongings to force a move-out; or
• Willfully interfere with the tenant's quiet enjoyment.

These acts are illegal even if the tenant is behind on rent. A tenant can seek a court order and damages (often $1,000 per violation or actual damages). The exam tests the principle: possession is recovered only through the courts, never by the landlord's own action.

The lawful eviction path — RSA 540

To recover possession, a NH landlord must follow RSA 540:

1. Serve a written Eviction Notice (Notice to Quit) stating the statutory ground (nonpayment, substantial damage, lease violation, behavior affecting health/safety, or — in unrestricted units — other good cause). Nonpayment notices commonly allow a short period to pay and stay.
2. File a Landlord and Tenant Writ in the District Division of the Circuit Court if the tenant does not leave or cure.
3. Court hearing; if the landlord prevails, the court issues a Writ of Possession.
4. A sheriff, not the landlord, executes the writ.

Exam takeaway: Two ideas drive nearly every property-management question. First, the deposit cap is one month's rent or $100, whichever is greater, with 30-day notice and return rules. Second, eviction is a court process under RSA 540; the self-help lockout/utility-shutoff route in RSA 540-A:3 is illegal. A property manager who advises an owner to "just change the locks" is steering the client into liability.

Owner agreements, fair housing, and recordkeeping in management

A property manager's authority comes from a written property management agreement with the owner — the management analog of a listing agreement. It should fix the manager's authority (set rents, sign leases, approve repairs up to a dollar limit), the management fee, the handling of owner funds and tenant deposits in escrow, and reporting/accounting to the owner. Because the manager is an agent of the owner, the same fiduciary duties apply: loyalty, accounting, and disclosure. Skimming undisclosed markups on vendor repairs, for instance, breaches the duty to account.

Fair housing is a daily management duty

Property managers apply fair housing law more often than sales agents do, because tenant screening is where discrimination claims concentrate. Screening criteria (income, credit, rental history) must be applied uniformly to every applicant. In New Hampshire the manager must remember the extra RSA 354-A classes — age, marital status, sexual orientation, and gender identity — on top of the federal seven, plus the duty to grant reasonable accommodations such as allowing an assistance animal despite a no-pet policy.

A manager who quotes different deposit terms to a family with children, or who steers an applicant away from a unit, exposes the owner and the brokerage to liability.

Records and trust accounting

Management multiplies the number of trust-account entries: monthly rents in, owner disbursements out, security deposits held (and their interest), and vendor payments. New Hampshire requires the principal broker to keep reconciled records tying every dollar to a specific owner, tenant, or property, available for Commission audit. Sloppy management books are a common source of escrow violations, so the exam-safe practice is one clearly reconciled trust ledger per the brokerage's clients, never a co-mingled "slush" account.