How do you avoid risks and liabilities as a property manager?

1 Know the laws

One of the most important aspects of property management is complying with the relevant federal, state, and local laws and regulations that govern housing, landlord-tenant relations, fair housing, health and safety, privacy, and environmental issues. Ignorance or violation of these laws could result in fines, penalties, or legal action against you or your clients. Therefore, you should educate yourself on the current and updated laws that apply to your properties and follow them strictly. You should also consult with a qualified attorney if you have any questions or concerns about the legal aspects of property management.

2 Screen the tenants

Another key factor in avoiding risks and liabilities as a property manager is screening the tenants who apply to rent your properties. A thorough screening process can help you avoid problematic tenants who may cause damage, default on rent, violate the lease terms, or create disputes with other tenants or neighbors. You should check the applicants' credit history, income, rental history, references, and criminal background before approving them. You should also use a standardized and fair screening criteria that does not discriminate against any protected class under the fair housing laws.

3 Maintain the properties

As a property manager, you have a duty to keep the properties you manage in good condition and repair any issues that may arise. Regular maintenance and inspections can help you prevent or fix any problems that could affect the safety, comfort, or value of the properties. You should also respond to the tenants' requests and complaints promptly and professionally. By maintaining the properties, you can avoid potential hazards, injuries, or damages that could lead to liability claims or lawsuits. You can also increase the satisfaction and retention of your tenants and clients.

4 Communicate clearly

Communication is essential for any successful property management business. You should communicate clearly and frequently with your clients, tenants, vendors, contractors, and employees. You should also document and record all your communications and transactions in writing or electronically. This can help you avoid misunderstandings, conflicts, or disputes that could escalate into legal issues. You should also review and update your contracts, leases, policies, and procedures regularly and make sure they are clear, accurate, and enforceable. You should also inform your clients and tenants of any changes or updates that may affect them.

5 Get insured

One of the best ways to protect yourself and your clients from risks and liabilities as a property manager is to get adequate insurance coverage. Insurance can help you cover the costs of any damages, injuries, or losses that may occur on or because of the properties you manage. You should get professional liability insurance, also known as errors and omissions insurance, that covers you for any mistakes or negligence that may result in financial losses or legal claims against you. You should also get general liability insurance that covers you for any bodily injury or property damage that may occur on the properties. You should also advise your clients and tenants to get their own insurance policies, such as landlord insurance and renter's insurance, that protect their interests and assets.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?