5 Ways Property Managers Limit Risk From Environmental Claims

Property Managers Limit RiskProperty Managers Limit Risk

5 Ways Property Managers Limit Risk From Environmental Claims

A Property Manager is often stuck between a knife (tenants), a gun (owners), a judge and jury, and a hard place. Environmental claims are common pitfalls that cause even the best Property Managers to stumble into a dark alley, or wind up on the wrong side of the bench in a courtroom. Here are several tried and proven ways Property Managers limit risk from environmental claims.

Property Managers Limit Risk

Property Management is Risky Business

Risk – Not thoroughly inspecting

 

Failing to thoroughly inspect before occupancy can get tenants off the hook for damages, or able them to terminate a lease. Both events affect your bottomline. Each property will have it’s own set of unique inspection requirements. Limit risk by performing these inspections:

  • Walkthrough. At a minimum one should walk-through all accessible portions of the building/property, and at least peak into hard-to-reach storage areas such as attics, crawlspaces, sheds, etc. Take as many pictures as possible – you cannot have too many. Video can be even better because you’re catching the equivalent of thousands of photos from various angles.
  • Owners and Tenants. No matter what the owner and tenants say, insist on walking the entire property with the owner and tenant (usually separately) and reviewing any areas of concern. Listen to any concerns and clearly point out deficiencies to both parties. Property managers limit risk by practicing this best practice which gives everyone an opportunity to voice their concerns.

Property Management Documentation

Risk – Poor documentation

 

Poor documentation can be one-way ticket to the dog house. Use a similar organization structure across all 4 groups of data. Whether it’s a small dispute over who pays for the trash, or a big dispute headed to court, here are a few tips for organizing your data so it’s retrievable when you need it:

  • Email. Always preface the subject heading of each email by client name or property address. This makes it easier to locate emails in the future, and if you’re a techie you can create rules for your computer to automatically file such emails in specific client folders.
  • Photos. Select a folder system and keep your filing up-to-date. I save photos in albums/folders organized by date, and sometimes create folders for clients or projects. I even have a presentation folder which includes albums for “pretty,” “gross,” and “funny!”
  • Digital Reports. Store 3rd party reports on your hard drive, and also in the cloud or a safe backup system. Organized your reports by client name, project address, or date – whatever works for you.
  • Hardcopy, Disclosure Logs, etc. You should maintain all hardcopies for at least 5 years after the termination of a lease.

 

property managers limit risk

Property Management Team Selection Helps Minimize Risk

Risk – Hiring the wrong team

 

If you find yourself holding your nose during the initial walk-through and you know you need a Healthy Building Inspection, don’t just hire the first one that hands you a card. Due diligence when selecting a contractor, attorney, cleaning company, etc., should include some research and getting references for similar types of projects. Establish your team of professionals before you need them. Contracting the wrong team can create more risk than it mitigates, so choose your team carefully.

  • Only hire outside consultants with proper credentials and a good track record. There are national requirements for anyone testing asbestos, lead and radon. If your concern involves any of these contaminants, it is your responsibility to ensure the contractor carries the proper credentials. Be sure that your Industrial Hygienist (IH) carries Errors & Omissions (E&O) and General Liability Insurance. [Carry your own insurance, too!] In California you need a license to braid hair, but anyone can call themselves a mold inspector. For unregulated testing, rely on what industry experts boast, themselves. The Indoor Air Quality Association (IAQA) administers a Certified Microbial Inspector (CMI) program that I trust, and the International Institute for Building Biology & Ecology has a certification for Electromagnetic Fields (EMF) that is recognized internationally. Any IH who will not produce testimonials or share references should not be hired. Always check their Yelp and Better Business Bureau records.
  • Have a good team in place before a problem occurs. In your Rolodex, you should have the number of a good real estate attorney and industrial hygienist (IH). Speak with your team members before there is a complaint requiring immediate attention. Often the best consulting professionals are very busy, and on short notice are reluctant to take on new clients they don’t know. A simple phone call, cup of coffee, or lunch meeting will go a long way in making sure your first-choice attorney or IH is available when needed.

 

property managers limit risk

Property Managers Should Pay Attention to Red Flags

Risk – Driving through red flags

 

Early in my professional career a mentor told me, “Alex, the best client you ever have may be the one you turn away.”

Huh? It’s taken me years to fully appreciate that statement, but it’s so true. I’m embarrassed to say I still had to learn the hard way. When business is slow and you see an opportunity you are hungry and want to take the job/client – even though something in your gut says something is wrong. Trust your gut, and if you don’t trust your instincts you can establish a “red flag scoring system” and create rules for your own comfort level. Be wary when you encounter these common red flags:

  • Paranoia
  • Lots of back and forth before they sign on
  • Repeated cost issues (too much, misunderstandings, discount? x 100, etc.)
  • Attitude, Combative or Aggressive
  • No pay / late pay
  • In or threatening legal battle(s)
property managers limit risk

Property Management Complaints and Squeaky Wheel

Risk – Ignoring the squeaky wheel

Respond quickly to, and take seriously, all tenant complaints. Complaints are serious. This is how your customers provide feedback. First let them know their complaint was received and your team is preparing to respond. Once you have a plan of action, share the relevant details with the tenant. The tone of your response should be professional and courteous. Maintaining a good line of communication is critical for preventing an escalation of the problem. The old practice of saying “I hear you; this is what I hear you saying; and this is how I’m going to respond,” can ameliorate some potentially ugly situations just by making the tenant feel heard and setting clear expectations.

The flip side of this coin is you sometimes must be the squeaky wheel yourself, and remain courteous and professional while being persistent.

Property Managers walk in high-risk and litigious streets. Minimizing your risk from environmental claims will make you a better Property Manager. Let Healthy Building Science help whenever there’s a question about environmental contaminants, or whenever a tenant remodel is scheduled in a sensitive or high-risk building.

Let us help you limit risk from environmental claims.

Call or Email to limit your risk.

Property owners and managers who implement environmental best practices are ahead of the competition. For additional information please read The Keys to a Healthy Building,” an article by Alex Stadtner in Rental Housing Magazine, August 2014 – “The Healthiest Home”

 

10 Responses to “5 Ways Property Managers Limit Risk From Environmental Claims”

  1. Ivy Baker says :

    This is some really good information about property managements. I liked that you talked about how you should consider walking your property with your property manager and see where problem areas are. That does seem like it would help you to know if there are any issues with the property and if you need to get anything repaired.

  2. jresquival says :

    That’s a good tip to have a good team in place before you have a problem. That way you won’t lose any extra time trying to find a contractor during a crisis. I bet businesses are always making contacts to make sure they have people in place.

  3. Luke Smith says :

    Thanks for your comment about how some properties warrant additional inspections by qualified experts. I can definitely see how having a property manager who works often with a property would make it more likely to catch any potential issues early. I would also think that it could be good to have an environmental consultant on hand to advise you in situations concerning environmental claims.

  4. Drew says :

    I like all of these points but especially the last one. Ignoring obvious red flags can really come back to bite you. Thanks for the advice.

  5. Alex Stadtner says :

    Hi Alex,
    Thanks for the note. Hiring “an expert” is only as good as the expert. Hiring “the right expert” is what will really make a difference in outcome. Unfortunately we cannot always know who is right for the job. But 3rd party certifications, experience, and independent testimonials and referrals all should be part of standard due diligence. I’ve been in a tight time pinch a few times and gone with the first person I found… only to spend more money and time in the long-run because I didn’t fully vet the expert. It’s worth slowing down, getting references, checking credentials, etc.
    Thanks for writing in,
    Alex (the other one)

  6. Alex Trodder says :

    It is important to know about the ecological impact that a building or construction project might have. Many states and countries have rules about protecting the environment. You make a great point about making sure that you hire the right experts (like ecological consultants, structural analysis engineers, etc) to ensure that your project stays safe and on the right side of the law.

  7. Alex Stadtner says :

    You got it! Being a proactive property manager takes work. But in many ways a little pro-active work saves time and money and headache down the road. It’s an investment, but one that will pay dividends. Happy new year!

  8. The tip to do a walkthrough, both with the tenant and the owner, seems like a really good idea. Not only would that give you a lot more info as the property manager, but you would also be able to know exactly what each party expects in the property. I will definitely start doing this because I think it will also really make a difference in our overall bottom line as well. Thanks!

  9. Jason Strong says :

    I have a friend that is wanting to become an environmental consultant. I honestly have no idea what that means or what they do for a living. This article helped me out though and I can’t wait to talk to her more about it.

  10. Brooke Joseph says :

    It is interesting how a lot of these things can be taken care of if you pay a little more attention to detail. However, hiring the wrong team is always a worry of mine. I guess it is just difficult to trust anyone that isn’t as strongly invested as I am to do the hands-on work. The right professionals with the things you talked about should also be able to show as much passion and dedication to a project as you do. Thank you for the helpful tips!

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