Blog

Major Risk Areas for Property Management

There are certain risk areas where property owner or property management can be held liable if anything goes wrong. Here are the major areas that need special attention.

Discriminatory Practices

Property management must comply with two important laws that prohibit discrimination. They are Americans with Disabilities Act (ADA) and Fair Housing Act (FHA). According to the ADA, property management or property owner should make modify the property reasonably for accommodating the needs of the disabled. Such modifications could include installation of wider doorways, ramps, and designating parking spaces for the handicapped.

As per the FHA, property management cannot discriminate against applicants or tenants based on disability, familial status, national origin, gender, color, religion, or race. Property management has to be careful that FHA violations do not occur while advertising the property and while screening applicants. Violations of the ADA and the FHA attract stiff penalties and property management will have to pay punitive damages as well.

Criminal Activities

Property management has the duty of protecting tenants, visitors, and its employees from dangers of criminal activities taking place in or around the property. If management has not taken sufficient precautions to stop and prevent crimes, then it will be liable for significant amount in damages.

For instance, if an employee commits a crime while doing his or her work on the property that results in harm or loss to tenants, visitors, or other employees, then property management will be held responsible. Similarly, property management is also liable if a contractor, contract staff, or tenant commits a crime, on the property. To avoid liability, property management will have to implement strict screening procedures for employees, workers, and tenants.

Environmental Risks

There may be certain conditions or things on the property that can cause pollution or danger to the environment. In United States, the Environment Protection Agency (EPA) is in charge of checking and making the guilty party pay for the cleanup cost of different types of contamination. This is a high risk factor, as EPA functions on the premise of absolute liability, which means it can hold a party liable simply based on the relationship of the party to the contaminated site, and regardless of whether it caused the contamination or not.

To avoid environmental risks, property manager can insist the property owner conduct a minimum phase 1 environmental audit. If the audit does not find any contamination, the property owner is considered an innocent purchaser, and cannot be held liable if later on contamination is found on the property.

Insuring the property is a fantastic way of covering several risks. General liability insurance can provide reimbursement of compensation to the affected parties. Property management will have to review existing policy and include coverage that they feel are required.

If there sufficient liability coverage and any incident occurs, property management will have to consult the insurance provider first before paying any compensation or reimbursement to the affected party. Most policies cover the events happening during a specific period, and not when the claim is made.    

How to Fill Vacancies Fast with Stellar Tenants

Property management has to be ready with their marketing strategy all through the year, as units can become vacant any time. Even though there are certain months when fewer people tend to move, it is always marvelous to have in hand different techniques to attract new people quickly.

No sure-fire technique that can always work, and hence methods have to be updated according to market situation and general outlook. The best approach is to minimize vacancies by having courteous staff and prompt services; however, even with long-term tenants, there are chances of vacancies.

Many property managers cast a wide net by using variety of techniques and media, with the hope that one will be successful. However, this can work out quite costly, and there is no guarantee of finding tenants when vacancies arise. Here are some techniques that do not cost much and work most of the time.

The Waiting List Program

Create a program, where prospects are prompted to leave their contact information, so that they can be notified of future vacancies. A small gift or some rebate would be a sparkling incentive for people to leave their name and contact info. Once you have a few names on your waiting list, it would be a prudent idea to prescreen these people, so that you are sure of contacting the best prospects when vacancies arise. Select applicants with positive reputations and appealing credit scores, and you will be assured of fine tenants for the most part.

The Referrals Program

If you have managed to build outstanding relationships with the current residents, then make a list of the most reliable tenants. Ask these tenants, if they would like to recommend the community to someone, they know. People, usually like to have their friends, acquaintances, relations, co-workers, and colleagues as their neighbors. Secondly, tenants will feel appreciated when you have given them the chance to bring in referrals. When such a referral becomes a tenant, then it would make sense to reward the tenant who provided you with the referral.

Spruce Up the Property

Prospects who are looking around for rentals should immediately want to rent a unit on the property when they physically inspect it. This is the best way to attract prospects and build the reputation of the property. Here are some important points for improving units that prospects will find hard to resist:

  1. Make sure the units smell pleasant, since that is the first impression prospects usually register when they enter a unit. Use a mild freshener with a homely fragrance. Strong scents will not only seem artificial but they might also seem offensive.
  2. Make sure the unit is sanitized and sparkling clean, especially the kitchen and bathrooms. Discolored grouting and caulking, leaking faucets, and peeling paint creates a sorry impression of the unit, so do your best to keep the property sparkling. After the previous tenant has vacated, conduct a thorough inspection of the kitchen, look for damage, stains, and burn marks, and rectify any issues that are apparent. You should have an electrician, plumber, painter, and so on whom you work with  

Managing the Problem of Hoarders in Property Management

Is Hoarding a Mental Disability?

According to DSM-V (Diagnostic and Statistical Manual of Mental Disorders), hoarding is stated to be a mental disability. This disability has the following characteristics:

    •    The person finds it extremely difficult to part with or discard possessions, irrespective of their value.
    •    Hoarders can easily be distinguished from people who display normal collecting behavior, by the quantity of the collected items. Hoarders accumulate possessions to an extent that will fill up their living space or workplace, so that it is no longer possible to use the space for its intended use.  

Hoarding Issue is Extensive

Hoarding disorders have increased dramatically in the past decade, and about 15 million people are considered affected by this mental disability across the country. Most tenants with hoarding issues often remain undetected for a long time, until it is time for property management to conduct an internal inspection of the units.

Hoarders are known not to report maintenance issues and such behavior could lead to extensive damage of the unit. Hoarding also creates many safety and health issues, including infestation, structural issues, and fire hazards. There was an episode in the wonderful show of House that illustrated this. In that episode, you could barely walk into the apartment and the inside was filled up with junk and it was disgusting. It was a biological nightmare.

What can Property Management Do?

Since hoarding is considered a mental disability, property management will have to accommodate hoarders if they want to comply with the Fair Housing Act. Even though most hoarders are not particular about the quality or state of the unit, property management has to make sure the accommodation provided is reasonably good, since they are protected under FHA, and they are considered disabled.

In case there is a hoarder in the community, it is not wise to evict the person immediately. Property management will first have to think of solutions that might reduce the tenant's tendency to hoard, largely. Property manager will have to treat the matter compassionately and deal with the issue with fair amount of sensitivity. Make sure not to use words such as mess, trash, or junk while describing the possessions of the tenant.

This way, you can gain trust of the tenant and he will be more open to listen to what you are suggesting. Property management can take professional help and develop an individualized plan for correcting the situation, and make the tenant agree to support services and for cleaning the unit. Additionally, maintenance personnel and property staff should be made to understand that this situation comes under the protection of FHA and must be dealt with sensitivity.

Cleaning of the unit will be slow and may extend over several months, as getting over hoarding disorder is a process and takes time. However, property management can take steps to first clear items that are safety and fire hazards. Remedy plan should include regular inspections for verifying progress.

Document Steps Taken

It is vital for property management to document everything while implementing a remedial plan. The plan can be made into an agreement, and make the hoarder tenant sign such an agreement voluntarily. If the hoarder refuses to sign such an agreement, consult an attorney and start sending follow up letters or notices.

2015 Resolutions for Property Management

Everybody looks upon New Year as an opportunity to change and make things better. It is the same for individuals and for businesses, as something always falls short, and there is always room for improvement. Property management is a challenging profession, and when the year is ending, it is a prudent time to assess performance and find out the area that could be improved.

It is wise to make resolutions in the New Year, and property management can try to set better standards in providing quality service. Set realistic goals that are achievable, even if these objectives may seem quite small. Here are certain areas in property management that can be improved upon.

Aim for a Paperless Office

Digitization of data, processes, and storage should be given top priority in the office. Usually filing is a nightmare in most property management offices, and there will be piles of important documents simply sitting on the desks for extended periods. Streamline all processes and start digitizing documents. It will not only save time in filing, but staff will be able to retrieve data much faster.

Easier Ways for Paying Rent

Rent payment is another major area that needs improvement on most properties. Money orders and personal checks are outdated, and these systems are vulnerable to fraud and tampering of funds. Design a secure online portal where tenants can conveniently make their payments using their debit or credit cards, and their accounts are updated in real time.

Property management will not have to contend with NSF funds, depositing checks, or posting payments. Once the system is implemented, everything happens automatically, from updating of accounts to issuance of receipts. Tenants will be satisfied with the convenience of paying online, and property management will not have the worry of frauds and misappropriation of funds.

Update Resources

Property management has to contend with millions of laws and a mistake can prove very costly in terms of fines and lawsuits. Laws also keep changing and it is critical for staff to know the current rules and regulations in different areas. For instance, office staff should know the latest updates on federal fair housing laws, while denying applications. Property management will have to implement a system where resources are updated automatically and all employees are able to access the resources they require in their area.

Consider Property Management Software

Seamless processes, centralized management, and excellent reporting are no longer a dream and can be easily achieved with the right software. If purchasing software is over your budget, then you could consider service providers who can deliver the same services for a monthly or quarterly fee.

Revamp Procedures for Repairs and Maintenance

One of the major complaints from most tenants is in areas of repairs and maintenance. With the right software, it is very easy to simplify the whole process right from the time of accepting maintenance request, allocating the work, and reporting the completed task. Such a process will not only create a smoother work flow but also save time and money that is always a golden achievement.   

Knowing the Ideal Tenant

In any business, it is critical to know the target market, and it is no different for property management when trying to find tenants. It is vital to understand whom you want as a tenant, and the different things such tenants would want in a property. Understanding the preferences and priorities of renters will help you make the right decisions in marketing and while allocating budget.

Knowing about the ideal tenants for specific properties, property management will be in a better position to find new tenants and maintain a consistent occupancy rate. When tenants are matched perfectly to the property, business can grow significantly.

Forming and Maintaining Fantastic Relationships with Tenants

Outstanding communication is the key to build and maintain any relationship, and it is true for tenants-property management relationships as well. For building trust, it is essential to maintain regular communication. In the age of social media, this task becomes even easier, since there is a platform where both parties can interact at their convenience. However, maintaining contact personally is also prudent.   

Tenants appreciate quick response to their repairs and maintenance requests; they like to receive information about safety and severe weather forecasts, and updates on new rental policies and laws. All this type of communication will make tenants feel you care about their safety and convenience, and they will not want to shift.

Mostly everybody is active on social media, and that makes it even more important for property management to build better relationships with tenants. Tenants like to post things about their community on their social media pages, and even provide reviews about how their community is being managed. Property management should also consider keeping a track of what tenants are posting on their pages about the community.

This information can reveal tenant's preferences and what they would like different on the property. It is possible to know what existing tenants feel about the pet policy or about going green. Property management can consider this data while renovating or making policy changes.

Decisions that Make Sense for the Long Run

When property management is able to know accurately what tenants actually want, it is much easier to plan a budget and allocate expenses accordingly. Time, effort, and money are generally wasted when you provide things that tenants may not actually need. When you can make smart decisions with the right information, you can attain a better ROI and use available finances in investing wisely.

Building Trust

Better relationships with tenants will also help in resolving disputes much faster and the outcome will be better. In fact, when property management and tenants understand each other well, there will be very few instances where management will have to enforce rules or apply punitive measures. A polite notice or a warning will work in most cases, and there will be much less confrontations.

Hence, it is critical for property management to make better relationships with tenants their top priority. In many instances, where there is an excellent relationship, tenants are least likely to take off or not renew their lease from the property even when better features are available for the same amount of rent.

Page 36 of 70