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Property Management Best Practices

Property Management Best Practices

As a professional landlord, your clients know that they are required to juggle various tasks and wear many hats throughout the day. While there might be a lot on their plates, there are some cardinal rules to follow to ensure best practices and to prevent their property management firm from facing lawsuits. In addition to sharing this information with your landlord and property management firm clients, protect their entire operation from front to back with a comprehensive Property Management Professional Liability insurance policy.

Never discriminate.

Property management firms are allowed to implement screening processes for tenants. However, they cannot deny anyone access based on their color, race, sexual orientation, age, or any other protected class.

Create a solid lease.

Every lease, regardless of how long the tenancy is, needs to be put in writing and signed by both parties. Details regarding tenancy, rent, consequences for late payments, maintenance, deposits and pets needs to be outlined in the lease. If not, your property management clients will have a challenging time in court defending their actions or proving a tenant was negligent in a court of law.

Be fair and honest.

Running a property management firm requires transparency and honesty, like every other business. Keeping residents happy and being forthright about repairs and policies will keep tenants in place longer and keep the reputation of the business a positive one.

Only withhold a deposit from itemized damages.

Even if a tenant abandons the lease, property management firms cannot withhold the deposit as a retaliation. Instead, this money can only be kept to cover itemized damages and losses.

Don’t double dip.

For example, if a tenant fails to give proper notice when vacating, you could hold them responsible for the rent until “proper notice” is fulfilled. But if you find a replacement tenant within a few days, then you can’t keep the new rent AND the former tenant’s deposit – simply because you can’t claim any actual damages (other than a few days of vacancy) since a new tenant started paying, explains Landlordology.

Understand the laws.

Each state has their own set of regulations for notices, such as evictions, inspections, and lease terminations. It can be a challenge to put out notices in a reasonable amount of time per state law, but this will prevent property management firms from landing themselves in hot water and facing a liability claim for invasion of privacy.

About PL Risk

In addition to bringing you the latest news from the insurance industry, PL Risk provides Resources for Agents and Brokers nationwide. We’ve recently implemented Hiscox Now, which allows agents their own access to Hiscox and instant quoting. To learn more about our operations, contact us today at (855) 403-5982.

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