Hiring Family For Your Property Management BusinessFamily and friends – you can love and/or admire them. BUT should you hire them to work in your property management business? Commonly referred to as “nepotism,” the practice of hiring family and/or friends has its pros and cons.

I have worked in the Real Estate/Property Management industry for over 30 years, During this time I have witnessed many colleagues who hire family members or friends; many of these instances are children who will most likely take over the family business at some point in time. Like anything else in business, hiring family members and/or friends can have both advantages and liabilities.

One advantage for hiring a family member/friend is that you generally know their background and qualifications. In normal circumstances, you have to review resumes and check references. As you know, much of this information can be SO false. Then after hiring a stranger, you quickly find out they have zero qualifications. With a family member or friend, you may have an advantage in this area. However, you may still have to investigate what you do not know regarding their qualifications.

This is also a good way to set up continuation or sale of the property management business in anticipation of retirement or a move to another profession. They can train to take over the business and you can ascertain if this move is a recipe for success.

If you are contemplating taking this step, stop and ask yourself a few important questions.

  • Have you investigated possible state law violations regarding hiring family or friends?
  • Have you put policies on hiring family and/or friends in your policy manual?
  • Are you considering a family member for a position based on sound business practices?
  • What could be the impact with current personnel?

First, it is important to be sure that when any family member or friend that your actions comply with state law. Generally, most states are very flexible on hiring of family/friends as long as another employee does not have a legitimate grievance or violate specific law. If you have any concerns, it would be wise to consult a qualified consultant or attorney on whether you have any issues with state law.

Next, a written policy regarding hiring family members/friends in your employee and/or policy and procedures manual is a must. This step could help you avoid any violations with state law. The family/friend employee policy should spell out what to expect from the new hire, regardless if they are coming into an entry position or at the executive level. Have an attorney and/or consultant review the policy.

Are you under pressure from another family member/friend to hire a relative or friend? Family members or friends have a tendency to take advantage of their personal relationship with the boss. This can be a recipe for disaster if it causes problems with existing personnel so it is necessary to base your hiring of a family member or friend on sound business practices.

Here are important tips to consider when hiring someone you already know.

  • Consider the maturity of the individual for the position – this may be the only step you have to take if they are simply not ready for a role in “your business.” If too immature, perhaps they need experience elsewhere before working for you.
  • Offer a legitimate position with a definitive job description – one normally offered in your industry.
  • Review the education and/or knowledge of the individual as it relates to the position.
  • If not fully qualified, implement a training program with timelines for achieving success, probation period, and reviews.
  • If they are qualified, set them up with a probation period and reviews, the same as any other personnel working for you.
  • Do not overpay or underpay for the position they are taking. This is one area where another employee could have a grievance, including the family member and/or friend.

If you have existing personnel as tenants, take appropriate steps to this work within the existing structure

  • Have all parties read and/or review the written policy in the company employee and/or policy and procedures manuals. Be sure to have them sign an acknowledgment agreement.
  • Counsel the family member or friend on acceptable or unacceptable behavior during business hours.
  • Discuss the issue of hiring a family member and/or friend and review the job description/responsibilities of the new hire.
  • If possible, have a third party who is not a relative/friend to whom they can report any grievances or conflicts. If not, encourage personnel to discussion their concerns with you, their employer; then listen objectively to all sides.

If the family member and/or friend are NOT working out, then take the necessary steps to terminate their employment. This may be difficult but the winning solutions in the end.

Perhaps you have already hired a family member and/or friend with either success or failure. If you have not, this article may give you some insight on this matter and will help you maintain a positive family or friend relationship.

Jean Storms - Owner and Author of LandlordSource ProductsJean Storms, MPM® is the founder/author of LandlordSource and has been a NARPM® member since January 1993.

Disclaimer: LandlordSource does not represent the article content in this website as legal advice. It is shared information only and up to the reader to use this information responsibly, seeking legal advice as necessary to their business.