Real Property Management’s standard is to promote ethical business practices within the property management field. We hold our franchises to the highest standards of business professionalism, fair housing practices, and interpersonal skills. These principles set our employees apart in fulfilling residential management needs. The ten articles explained below will help you meet your fiduciary responsibilities to your clients and stay within the law.
This discussion on Ethics should not be construed as legal advice, you must always consult with an attorney who is knowledgeable of your local laws.
Article 1: Responsibility to Our Client
It is the responsibility of all who represent Real Property Management to protect the best interests of our clients though confidential relationships, non-deceptive practices, and compliance with all laws.
EXAMPLE: Charging fees that far exceed the statutory limit or acceptable standard for your area or industry. A $200 late fee would be excessive and unenforceable if ever challenged.
Article 2: Discrimination
The property manager shall not discriminate in the rental, lease, or negotiation for real property based on Fair Housing Laws as disseminated by the U.S. Department of Housing and Urban Development and shall comply with all federal, state, and local laws concerning discrimination.
EXAMPLE: “Selectively” enforcing lease provisions. If a tenant misses a scheduled appointment with your maintenance person and you simply warn them and then reschedule, that is how you must treat all tenants. If, however, another tenant misses an appointment and you charge a re-scheduling fee, you are in violation of Fair Housing Laws.
EXAMPLE: Steering potential tenants to or from certain neighborhoods (typically because of their racial or ethnic background).
Article 3: Written Agreements
Property managers will act as professionals at all times in communications, agreements (either written or verbal), and contracts. The property manager will disclose any agreed-upon responsibilities and fees.
The property manager shall provide clients and tenants with a final copy of signed agreements pertaining to the leasing and management of the property.
EXAMPLE: If you have an agreement with any vendor, you must disclose this relationship in your management/lease agreement. If you are receiving funds from a home warranty company when an owner signs up, you must disclose the relationship. However, depending on the state, you may or may not need to disclose the amount. Check with your local jurisdiction.
Article 4: Protection of Managed Properties
Property Managers will manage, within the confines of the management agreement, all properties in accordance with safety and habitability requirements of law. Clients who refuse, or are unable, to maintain their property in accordance with safety and habitability requirements shall be denied management.
EXAMPLE: A tenant is out of hot water, and your vendor has verified the water heater needs replacing. The existing water heater was not installed to meet code and is now a safety hazard and a habitability issue. The owner has not returned any of your communication attempts and has not approved installation of a new water heater. You are required by law to provide a habitable environment for the tenant, so you must move forward with installing a water heater, even without the owner’s approval.
Article 5: Expertise
Property managers will always present themselves only as authorities in their area of expertise and refrain from practicing any other profession that may require a separate license. Examples include accounting, financial planning, construction, and contracting. You may refer a client to a preferred vendor as a consultant.
EXAMPLE: If you have a tenant who has claimed bankruptcy, you need to verify the claim and notify the homeowners. Owners often have a tendency to ask you for legal advice about what to do next. Your job, as the property management professional, is to recommend that the owners speak with an attorney of their choosing (do not provide a recommendation list for legal advice) and allow the attorney to counsel them on this matter.
Article 6: Property Condition
On the move-in/out date, the property manager shall comply with local and state laws by providing the tenant with a completed written report outlining the property’s move-in/out condition.
EXAMPLE: It is very late at night, and tenants are moving into a new property. You did not assess the property beforehand to prepare the move-in property condition report for the tenants to sign on the date of move-in. While moving into the property, the tenants damage the walls and scratch the hardwood floors. The following day, you create the move-in condition assessment report and mark those items as pre-existing. Upon move-out, you do not charge the tenant for the damages because of the mistake at move-in. You are now in a battle with the homeowner about who caused the damages.
Article 7: Education and Licensure
Property Managers shall maintain their real estate license and/or all licensure requirements and continuing education credit as set forth by the state where they manage properties.
EXAMPLE: If you are a licensed sales agent, broker, or property manager (in some states), you are required to comply with state and local educational requirements, including, but not limited to, continuing education. You do not want to practice property management without proper licensure.
Article 8: Funds
In compliance with state law, the property manager shall keep an accurate accounting of all funds and fully disclose this information to the client.
In accordance with state and federal law, the property manager shall keep funds separate from any operating and/or personal accounts and strictly refrain from co-mingling.
EXAMPLE: If you are not reviewing your escrow balance monthly and balancing the account, you may inadvertently fund the owner’s maintenance costs (routine maintenance is typically funded by a separate account carrying a specified minimum balance). Maintenance is a common expense that can sneak up on any property manager if you are not habitually looking at your owners’ escrow accounts.
EXAMPLE: When making multiple runs to the bank with several deposits, you may accidentally deposit funds into the wrong account. Verify all checks and deposit account numbers to prevent mixing funds between your operating account and the escrow/trust accounts.
Article 9: Privacy
In compliance with state and federal laws, the property manager shall keep secure and confidential all personal information, including, but not limited to, credit, employment, and background information pertaining to the client.
EXAMPLE: If someone calls or physically comes into your franchise to request information about a tenant, an application, an owner, or a property address, you must do your due diligence in protecting your clients’ rights. This also applies to recordkeeping and complying with merchant services regulations.
Article 10: Timely Response
The property manager shall respond in a timely manner to tenants’ requests for repairs and maintenance.
EXAMPLE: It is your job as a professional to be responsive to your tenants’ requests. Do not delay your response because you assume an irate tenant’s call is minor. You may find out that the tenant was not exaggerating and the “minor” issue has grown into something major because of your unresponsiveness (e.g., a moisture leak around a window has turned into black mold). Now you may have a possible lawsuit on your hands. Not only will a quick response time bring a higher standard of customer service, it may also keep you out of a courtroom.
Real Property Management has trained individuals who collect all of the appropriate supporting documents; verify information presented in the application; run and analyze credit applications, criminal history reports, and eviction histories; and make sure that tenants have the means to support rent and other financial obligations to minimize the risks in tenant placement.
Ready to get rid of the headache of managing property yourself? Contact your local Real Property Management team to learn how to keep the home without the hassle.