Property Management War Story Number 8652

Most experienced property managers probably know the difference between a war story and a fairy tale, but for those of you that don’t…

Fairy tales start out with “Once about a time” and war stories start out with “Now this ain’t no BS….

This is a war story!

If you’ve attended NARPM® events or other property management classes regularly, then you have likely heard that you need to be consistent and that it is important to document everything possible. You never know when you’ll need to fall back on your documentation. You can’t depend on your memory of an event because it could be 3 years or more before you need documentation to prove your position.

I was introduced to Jean Storms of LandlordSource at one of the NARPM® trade shows and was thrilled to learn that she had taken the time to write a Policy & Procedures manual for property management offices. I’d been meaning to create a manual like this since I started my business but never got to it because there was always something else that needed to be done first.

The LandlordSource manual was just what I wanted! In order to use it I had to fill in some items, adapt other items, and delete some policies that did not apply to my operation. It took me less than 8 hours to review and edit the whole manual and put it into operation. I don’t even remember what I paid for the manual and her permission to use it, but I DO know that it has saved be thousands in legal fees!

One time, the section of the manual that talks about maintenance while a unit is tenant occupied, the procedures that must be followed, and the policy on adding tenants to a lease were subpoenaed. A personal injury attorney that thought he had hit the jackpot because of an alleged injury at a property I manage.

Here’s what happened. We received a letter from Tenant Joe telling us that he is a top notch maintenance man and is willing to do repairs around the property in exchange for some rent consideration. We advise Tenant Joe that whenever repairs are needed, our policy and procedures manual requires that we used only contractors that are licensed with the State Contractors Board. We also ask Tenant Joe what repair is needed and he said that we should hire a licensed Contractor to find out. At this time, we figure Tenant Joe was just looking for a break in the rent and that nothing is wrong. We write a memo of the conversation and file it.

Three days later, we are in the neighborhood and stop by to take pictures of the property (as is also part of a policy we placed into our manual).

Six weeks pass. Owner Bob calls me and tells me that Tenant Joe has advised him that I am an idiot and that the building is falling into disrepair. Tenant Joe told Owner Bob that, for $300 per month off his rent, he can take care of all the problems I’ve been ignoring. I send Owner Bob a copy of the memo and also the pictures I took at the time. I also ask Owner Bob to write up a memo of this event so I can add it to the file as well, in case a problem surfaces down the road.

Three months later, Tenant Joe called and asked for the name of our insurance carrier. He says his mother, who now lives in the unit, fell on the property and needs to file an insurance claim. We provide the name of the agent to Tenant Joe and asked him where she fell. Tenant Joe again told us to hire a Contractor and figure it out ourselves.

We wrote more memos, took more pictures, and interviewed other tenants at this address. We were trying to verify that Tenant Joe’s mother was indeed hurt at the rental property…

No one seems to know Tenant Joe’s mother.
We can’t find any broken concrete or any trip hazards at the property.
We also can’t find that Tenant Joe’s mother is living at the address according to the lease.

In this situation, we knew and followed our company policy consistently. We also had sufficient documentation – copies of 246 completed maintenance requests over a 6 year management period. All of this, along with Tenant Joe’s insistence that he be the maintenance man, convinced Tenant Joe’s lawyer that he had a weak case.

We submitted the package to the State Attorney General’s Office Insurance Fraud Division. The State gave Tenant Joe a job making license plates. This was the fourth and final time that Tenant Joe’s mother slipped and fell on a property that he wasn’t allowed to maintain.

My advice is to keep good records and have policy and procedures manual. The time (and money) you invest is worth it.