Property management can be a fickle beast. Whether you own the property yourself or you're managing the property for someone who does own the property, this is a job that can be rewarding despite the difficulties involved therein. Litigation is a common phenomenon among those who are managing property. It is important to keep yourself, or the people who own the properties, safe from litigation. Beware of the mistakes that you can make. Included throughout this brief article are five common property management mistakes to avoid.
Property Management Agreement
No matter what, you're going to need a property management agreement in writing. This is an agreement between you, as the property manager, and the property owners. Throughout the course of a property management agreement, your duties should be clearly spelled out and nothing more, nothing less. You should not, and are, in fact, not legally required, to perform duties that are not clearly spelled out in the property management agreement. This is your greatest form of insurance as a property manager.
Makeshift Lease Agreements
Makeshift lease agreements are big no no's in the world of property management. It is important that you did not just find a lease and edit it to fit your ad hoc needs. Rather, a lease should be drawn out that is both legally sound and specifically fitted to fit the needs of the leaser. It is important that you go over the ins and outs of a lease with an attorney before a potential tenant signs it. This is not only to protect the tenant, but also you, as the landlord. It there is a legal problem with the lease, chances are, the responsibility is upon you.
It is important that, after receiving a deposit from a tenant, you do not hold onto it for your landlord. For every deposit that you receive, you must place it into a trust account. This is a legally binding problem between you and the tenant. If you do not place the deposit into a proper trust account, it could be the case that you can be held liable for any problems revolving around the deposit. In fact, if not placed into a proper trust account, interest could grow on the deposit, for which you will be responsible for paying.
Move In / Sign Out Form
It is absolutely imperative that you make a tenant sign a move in and sign out form on their day of move in and day that they move out, respectively. You need to document the times that the tenant moved in and moved out and should specifically visit the house in question. Make sure that everything that was properly in place during the move in times is still properly in place or in working order during the move out day. Consult the move in forms during the times that the tenant moved out to see if everything properly correspond to its original state.
Don't Combine Lease Purchase and Lease Agreements
Make sure that you properly document whether a tenant has a lease purchase agreement or a simple lease agreement and make sure that these two documents are very distinct. It is important to work with an attorney when drawing these documents up. The reason being is that even properly trained agents of the law can have a tough time discerning whether a tenant is merely renting or owns a property if a document is far too confusing. Even judges can easily mix up what type of document he or she is looking at.
As a property manager, there are plenty of novice mistakes that you can make. Hopefully, this article will help you avoid at least a few of them.Share