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Accredited Management Organization (AMO®)
Risk Management & Insurance
Property management lawsuits don't have to happen. We will assist you in monitoring your property so legal, financial and physical hazards don't result. Our ultimately goal is to continuously satisfy your tenants and increase the value of your property.
The list below is by no means exhaustive and serves as a good reminder.
Eight Tips for Efficient Risk Management
Investing in real estate property carries inevitable risks. Risk can be reduced through solid teamwork by your attorney, accountant, financial planner, and property management staff. Following are 8 tips to reduce your exposure to financial loss:
1. Create a legal "firewall” between properties, employees, and your personal assets.
Think of a pyramid of safety. First, do not co-mingle legal title to the property with your personal assets. Second, do not co-mingle legal title of multiple properties. Third, do not co-mingle the employee / employer relationships with either your personal assets or the property. This liability structure separates personal, property, and employee risk by placing a legal firewall between exposure to legal liability and assets.
2. Obtain tenant waivers upfront to reduce exposure related to operating practices.
Ask your attorney about including liability waivers with your lease package. Have tenants sign liability waivers when they sign their leases. Consumers today expect to sign more than one document when they enter a major transaction, so this should not create a problem
3. Schedule regular hazard inspections.
Survey your property regularly for hazardous situations like uneven walkways and low-hanging branches. Document every problem when it occurs, put appropriate warning signs in place, and correct the condition as soon as possible.
4. Be proactive with mold exposure issues.
Look for mold during all unit turnovers and inspections, and get rid of it. Keep detailed move-in records with photographs. Give new residents tips on keeping mold away. Deal with any mold complaints serious issues and document them.
5. Train all staff on the Federal Fair Housing Act.
Every business requires constant training and professional development. In the case of property management, each staff meeting should include some aspect of fair-housing.
The Department of Housing and Urban Development (HUD) regularly conducts audits designed to identify discrimination in housing. These audits are unannounced and random. Fines can be staggering.
Ensure that your entire staff receives Fair-Housing training. An offhand comment by any staff member can be used to demonstrate hostility towards any of the groups protected by the Fair Housing Act.
6. Rigorously screen all prospective employees.
You can be held liable for an employee's incompetence or criminality. Before hiring, examine the person's job history, personal references, and conduct a background search and drug / alcohol check. Seek the advice of an employment law specialist before you establish your pre-employment screening standards and release forms.
7. Prioritize health and safety-related repairs.
Keep your property safe. Deal with broken locks, damaged stairs and walkways, internal and external lighting, gas and electrical problem, and hazardous material removal immediately.
8. Conduct periodic legal audits.
Commercial real estate is regulated by constantly changing local, state and federal regulations. The only way to ensure that you are not following outdated regulations is to have your attorney conduct a regular legal audit.
Include key on-site staff members in the audit. Ask your attorney to review new and revised sections of your operations manual and make sure that you are following the most current regulations.
9. Audit vendor licensing and insurance.
You are liable for any damage that vendors cause while working for you. Before you hire a contractor, ask for proof of licensure and insurance coverage. Require vendors to send you license and insurance policy renewal certificates every year.
10. Have a plan for handling dissatisfied tenants.
A dissatisfied tenant is a lawsuit waiting to happen. Respond promptly to complaints about sensitive issues and address them effectively. Develop a plan for handling specific types of complaints and apply it consistently.
Westlake's Commercial Property Management Services Include:
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