Everyone knows that the property management business is fraught with lawsuits and risks. People always say it’s not a matter of if you’ll be sued, but when you’ll be sued. Knock on wood – in my 12 years of owning a property management business, I’ve never had a lawsuit. Today, we’re talking about risk management and how your systems can protect you.
Risk Management and Your Procedure Manual
Avoiding lawsuits often depends on having systems in place. First, you need a policy and procedure manual. When you go to get your Errors & Omissions (E&O) insurance, they’ll ask on the form if you have a manual. If you do, you typically get discounted rates on your E&O insurance. That’s because having this procedure manual in place demonstrates to insurance companies that you know what you’re doing. They see you as less of a risk.
Policies and Procedures and Fair Housing
You also want a policies and procedures manual in place because it will protect you from potential fair housing lawsuits. If you have written policies that demonstrate how you market, screen, and lease to applicants and tenants, you’ll have documentation that shows discrimination would be impossible in your company. You can also use your manual to ensure you’re working with licensed and insured vendors. It helps to keep your employees adequately trained and aware of how things must be done.
You can avoid being sued by having a written procedures manual. Check out our products if you want extra help with managing your risk and liability. For any other risk management questions, please don’t hesitate to contact us at LandlordSource.