Residential Property Management can be both an exciting and challenging field, and risk management is an essential part of the professional Property Manager’s daily operations. Knowing how to analyze, manage and document risks will help you minimize them, and being consistent with the policies and procedures you put in place can help reduce your liability for damages or injuries.
There are many Landlord-Tenant laws which you must familiarize yourself with before embarking on this line of business, none of which you should take lightly. There are stiff penalties for Landlords and Property Managers who do not comply with the law.
Here are a few examples of how risk management is used in our business... Be sure to provide all legally required paperwork, such as Condominium Association documents and the EPA’s Residential Lead-based Paint Disclosure Program for properties built before 1978. Lease agreements should specify all liabilities and other provisions that could present hazards, and who is responsible for them. When you impose a claim on the Tenant’s security deposit you must provide them with the claim notice, in the correct timely manner required by s. 83.49(3) Florida Statutes. Many Property Managers also have problems returning deposits in a timely manner and documenting the condition of the property in writing and with plenty of photos (before and after). A Sales Associate may not collect rent or deposits in their personal name or deposit them in their own bank account... Mishandling other people’s money is always a sure-fire way to lose your license and find yourself standing in front of a Judge.
Make sure the Landlord’s homeowners insurance has sufficient coverage for personal injury, property and rental income. Does their insurance cover the Tenant’s personal property? If not, the Tenants should be advised to purchase Renters Insurance before they move in.
Another way to limit your risk is to make the Tenant call you for maintenance requests, or submit them online through your management portal. This is effective when you deal with these requests efficiently and not wait a long time for the landlord, to then make a patch-up repair. Make sure you have trusted licensed contractors and vendors working for you, and get all the information you can from these Companies including the type of insurance they carry and if they have workers’ comp insurance.
As a Sales Associate or Broker looking to get involved in Property Management, you should first educate yourself on the subject and laws to help minimize risk to yourself and your Company. Have fun out there, good luck and God Bless.
Oliver Overton-Morgan, Broker GRI
Absolut Realty Inc
www.absolutrealty4u.com