In real estate/property management, business owners, brokers, and property managers are constantly creating documentation, such as leases, policy manuals, and more, to prepare for any number of situations that can or will happen. Companies strive to create systems for many “what if situations” such as a lawsuit, a Fair Housing complaint, tenant problem, non-payment of rent, etc. The “what if” question that is often overlooked is “what if there is an emergency or disaster.” Frankly, who wouldn’t want engage in a more enjoyable activity than spend time planning for something unpleasant?
Are you prepared or do you have a potential ticking time bomb?
Start by thinking about who and what emergencies or disasters affect. There is the office and all the personnel in your company. Then you have all the rental properties impacting tenants, owners, and vendors. And don’t forget your family and friends.
Emergencies or disasters can sometimes be predicted; sometimes they just happen. Often they can give warning for events such as severe storms, tornadoes, hurricanes, floods, and more. A sudden fire or burglary is usually not so predictable. You cannot stop any of these events BUT you can be prepared.
Procedures for the office, tenants, owners, vendors, and family can be set up in advance. The office should have an emergency plan, including a temporary satellite office for severe situations. Personnel should have instructions on how to proceed and help clientele. There should be a plan for protecting documentation and records. Vendors required for emergencies and/or disasters should be identified. Tenants need advance instructions for survival and property owners need to know the management company’s expectations of them. Family and friends will need help on coping and connecting.
The goal is to make a plan for everyone concerned. This groundwork can give each person choices for handling an emergency or disaster if it occurs. Lack of preparation only adds to the chaos in any emergency or disaster.
Another area many real estate/property management companies ignore is identity theft. Identity theft is a billion dollar industry and creates havoc for businesses. There are steps to take and many ways to protect your business. One way is to comply with the Red Flags rule and it is a requirement of the FTC. Read my previous article on complying with the Red Flags rule.
Now who are you forgetting that is really important? The answer is YOU!
The chief area where many people fail to plan is for a personal emergency or disaster. Generally people plan for many “what if” situations. They have health insurance to cover costs for illness; they have car insurance in the event they have an accident; there is home and office insurance for fire, burglary, and more. However, it is human nature to avoid thinking about the worst that can happen – a disability or even death.
It is crucial to plan for the worst possible scenarios. Below are questions that will need immediate answers if the business owner, the broker of record, and/or a property manager are disabled or die.
- Who will become the temporary or permanent broker of record?
- What will continue the management of the business?
- Who knows where to locate the critical information for the business?
- Will the files and documents be secure?
- Who knows the status of any property management accounts involved?
- Is the ownership the property management accounts protected?
- Who will make payroll and have financial authority?
- How will the clientele be handled and by whom?
- Are there enough funds to cover potential client loss?
- Is there a backup plan for emergency funding?
- What controls and owns all the information stored on the cloud?
- Who will inherit or continue the business?
As you can see, there is a lot to consider if a principal party encounters an unexpected disability or death. Nobody wants to think about preparing for the worst scenarios. But just like planning for a flood or fire, it helps everyone involved cope with the immediate problems and handling of the company.
Planning in advance will also help your peace of mind. Don’t wait if you have not taken steps in this area and if you have, schedule a yearly review of your personal emergency/disaster planning. Then you can move on to that more enjoyable activity…
LandlordSource can help you with this (most likely) unwanted planning with The Emergency / Disaster System for Real Estate / Property Management. This product includes four manuals plus 29 customizable forms – Emergency/Disaster Planning; Office Emergency/Disaster Manual; Owner Emergency/Disaster Guide; and the Tenant Emergency/Disaster Manual.
Jean 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.