Professional Standards Issues in Today’s Market – Property Management

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Photo courtesy of Flickr user Fousty

Market conditions have led to an unusual number of ethics complaints being filed at AAR.  By evaluating the complaints filed, we are able to extract data such as: What are the most frequently complained about issues?  What does staff hear from the public and agents as emerging trends? This is part one of a four-part series we’ll be running in November to share a few of our insights with you.

Property management has become an area for numerous complaints.  As the sales market tightened and potential sellers were unwilling or unable to compete with REOs and short sales, they became the newest group of landlords.  With increased demand from the public for property management services, new skills were required of agents who had not previously been involved in the rental market.

So what types of issues relate to property management complaints?

  • Account issues; keeping accurate records for both the landlord and tenant
  • Order of services, such as repairs; tracking the services for completion and assigning invoices to the correct properties
  • Financial accountability; being able to provide itemized records for both landlords and tenants
  • The Landlord/Tenant Act itself – knowing it inside and out; understanding the rights of both landlords and tenants
  • E&O coverage at the brokerage for property management services

As a reminder, all offices with agents offering property management services should scrutinize their E&O policies and understand what their policies do or do not cover for property management.

A member of the public called AAR questioning how to file a complaint against a property manager whose rents were deposited into the agent’s account and not the landlord’s.  When he asked the agent for reimbursement, the agent said he had spent the funds and was unable to reimburse the client.

This is one example of how a REALTOR® can get into trouble with property management. Brokers/managers must provide oversight to insure that records are properly kept and the agent is providing the service their agreement authorizes.

Stay tuned for the next installment of this month-long series. Next Friday, November 11, we’ll touch on REO and short sale issues.

 

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