A property manager's steps to make a property suitable for habitation can vary from state to state and locality to locality. In general, the location is legally obligated to meet what's known as the "implied warranty of habitability," which means that a rental property has to be acceptable for occupation.
Property managers have to provide, at a minimum:
- secure doors
- safe water
- smoke detectors
One of the things that property managers do is keep up with and fulfill the obligations of housing ordinances, some of which are described below.
Protection Against Criminal Activity
Protecting tenants from criminal activity is usually a property manager's responsibility. Many local laws require that apartments have a deadbolt and a doorknob with a pin lock.
This is a bare minimum requirement to make a space safe as is keeping the premises free of illegal activity. A lease can also stipulate that participating in the unlawful activity is sufficient reason for eviction.
A property manager can also take the following steps:
- Install exterior lighting
- Trim tall plants to increase visibility
- Install cameras
- Pay for a security system
- Deliver crime alerts
Maintaining a Safe Space
It's the property manager's job to ensure that the building meets all building codes and safety regulations. This means:
- Notifying prospective tenants of environmental toxins and any dangerous conditions.
- Installing fire exits, smoke and carbon monoxide detectors, and fire extinguishers.
- Making reasonable repairs to improve building safety (although this doesn't have to include significant renovations).
- Providing notice of sex offenders.
- Disclosing recent deaths
If a tenant feels unsafe, by detecting the presence of black mold, for example, then it may be within their legal rights to file a complaint against the owner.
Respect Tenant Privacy
Landlord-tenant laws usually provide a tenant with a right to quiet enjoyment, which means being free from disturbance. Once moved in, a property manager is not allowed to infringe on this right.
Despite having to meet certain legal obligations, property managers can only enter a unit under the following circumstances, even if meeting their other legal obligations is harder to schedule.
Property managers can enter if:
- They provide proper notice of usually 24 to 48 hours unless it's an emergency.
- They need to check for repairs or make a repair.
- An emergency is impacting the tenant's unit or the entire building.
- The lease is about to end, and the owners want the space shown to potential tenants.
- Suppose a tenant hasn't been in their unit for an extended period. How long depends on local and state laws, but it's usually at least seven days.
When personal property is left behind in the unit, the property manager has to treat it as abandoned. If the property doesn't get collected and is worth more than the state-specified amount, it may be sold in public.
If the property is worth less than the state-specified amount, it can be kept or thrown away. Either way, the tenant must be first be told:
- Where and how to pick up their property.
- The cost of storage.
- How long they have to make their claim.
The U.S. Department of Housing and Urban Development's Fair Housing Laws stipulates that a tenant cannot be denied based on:
- National origin
- Familial status
It's the property manager's responsibility to provide a lease agreement and all other legal paperwork. The rental agreement must be legally written, follow all laws, and contain necessary clauses such as those advising occupants to obtain renters' insurance.
The document must also clearly state leasing periods, rental rates, and tenant names. In some areas, legal disclosures, such as the facts concerning security deposits, must also be given to tenants.
In many states, property managers also have to tell occupants about particular state laws, landlord policies, or share facts about the rental unit. This should be done in the lease agreement, or a separate written document, usually before the occupant moves in.
Accommodations for Tenants with Disabilities
A landlord isn't allowed to ask a potential tenant if they're disabled during the application process. If a tenant with a disability moves in, then the owner may have to make renovations that make the property more livable for the renter, within reason.
For example, if it's only possible to enter and exit the building using stairs, at least one ramp must be installed. Renters with disabilities also have the right, in particular cases, to change their living spaces to be more accommodating, like by lowering countertops to make them more wheelchair accessible.
There's a cap on how much a security deposit can be and how it can be used in many states. Normal wear and tear, for example, cannot be covered by a security deposit, whereas a door broken by the tenant can be.
If any repairs need to be made, a written invoice must be provided. There's also a maximum amount of time that can pass before the remaining money has to be given back. If no money is spent, then the security deposit must be returned ASAP. If not, the renter is allowed to take legal action.
Each state has laws concerning the eviction process. Some causes for eviction include:
- Not paying rent.
- Not leaving when a lease agreement has ended.
- Violating the lease agreement.
- Causing property damage that significantly lowers the value of the property.
Property managers can only remove a tenant after going through the legal eviction process. Usually, a tenant has to be given a termination notice before legal action is taken. If the property manager even tries to remove the tenant without a court order, then the tenant may be able to recover damages for the unlawful eviction attempt.
Limiting Investor Liability
Given all the opportunities for an investor to be legally liable for what happens to their property or tenant, there are specific mitigating steps that can be taken.
- Hiring a property management company is likely to have more resources and experiences than the average investor.
- Carefully screening tenants should reduce the likelihood of illegal activity being conducted by your occupants on your property.
- Treat tenant complaints seriously, whether they be about suspected criminal activity, toxins in their environment, or anything else.
- Get insurance:
- Commercial general liability insurance
- Property insurance
- Non-owned auto insurance (if your property manager or any employee uses their car for business purposes)
Property Management Company
In some states, apartment buildings with a certain number of units require a resident manager. No matter the reason for hiring your property management company, it's essential to screen them to limit one's liability sufficiently. This includes:
- Checking for references
- Credit reports
- Reading reviews
- Asking real estate professionals for recommendations
On top of all their responsibilities, property managers also have a slew of laws they have to follow. For an investor, this would only further complicate their duties, which is yet another reason to hire a property manager.
The legal dimension of property management also further raises the stakes of finding a good property management company. Much more than your investment is on the line, so don't skimp, and you'll end up with less legal worries.