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Principles of Decision Making

Making decisions in the property management business should be guided by sound principles to ensure a proper and good outcome. What are those principles?


PRINCIPLE 1 - COMPLY WITH AND ENFORCE LEGAL AND CONTRACTUAL OBLIGATIONS

  1. Owner obligations derive from F.S. 83 pt. 2, the property management agreement, and lease agreement. Tenant obligations derive from F.S. 83, pt. 2, the lease agreement, and other contracts (e.g. application, addenda, etc.). Our obligations derive from all of these contracts and law, as well as F.S. ch. 475.

  2. The property manager's calendar schedule, periodic tasks, maintenance responses, priorities, responses to claims or requests must have a solid foundation in the law and contractual provisions that apply.

  3. The property management and lease agreements must be prepared as business operations documents as much as legal documents, because they will shape how your business operates.

  4. Knowing the agreements' functions will give you the knowledge of dealing with issues or problems during a tenancy.

PRINCIPLE 2 - PREVENT, AVOID AND MITIGATE LOSSES, DAMAGES OR INJURIES

  1. When a decision, condition, action (or omission) can result or cause loss, damage or injury, the property must take proper steps to analyze the issue and prevent, avoid or mitigate the potential loss while producing the best outcome possible.

  2. The more serious the loss, damage or injury, the greater and more precise your diligence must be.

  3. Due diligence includes, but is not limited to, the following approaches:

  4. Timeliness. The timing and timeliness of response must correspondence to the gravity of the situation. The heavier the gravity, the more timely our response must be.

  5. Information Gathering. The greater the impact of the matter is, the greater your effort should be to gather relevant evidence concerning the matter, to ensure that the proper decision is being and the record supports our decision. For example,

  6. acquiring facts sufficient and relevant to the decision we must make (e.g. getting better and more pictures, talking to witnesses, inspecting the property, etc.)

  7. speaking to experts in the field on the question at hand and getting expert opinion in writing on the question at hand

  8. fully documenting our steps taken to resolve or address the matter

  9. Analysis. The depth of your analysis of the issue must correlate to the seriousness of the potential loss or damage that could result. Being able to analyze requires a thorough knowledge of the law, contracts, and guiding principles, as well as the facts relevant to the analysis.

  10. Communication. The more serious the situation is, the more critical it is for your communication to be accurate, precise and pointed, to avoid confusion, mistake, oversight and misguidance.

  11. Action. The greater the loss or damage can be, the more critical it is for you to take the correct action to resolve the item, or to instruct the tenant or owner as to whose obligation it is to act or omit to avoid the loss or damage.

PRINCIPLE 3 - TO BE EFFICIENT AND PROFICIENT AT OUR JOB

  1. Managing many properties can be very challenging if you are not using our time efficiently and in the most proficient manner possible.

  2. Effort and study must be applied to learning the most efficient manner of performing tasks, organizing data, inputing information into software, and making decisions. Having a well-planned and thought-out operation manual plays a large role in this effort and study, as it provides the foundation and guidance for our procedure and process.

  3. Incorporate best methods of maximizing results and reducing costs. When more than one choice or option is available, in general, you should choose the most efficient method that produces the best results.

PRINCIPLE 4 - MAKING THE RIGHT DECISION

  1. Making the right decision is based on the previous guiding principles, but in a manner that balances the priorities and weight of interests involved, along with the overall view of carrying out and pursuing the vision and mission of our company. In so doing, you service the customer and public to the greatest extent possible.

  2. Questions relevant to making right decisions:

  3. What is the problem or issue at hand?

  4. What is the objective of our response to the problem or issue?

  5. Whose obligation is it to act to solve the problem, and what do we need to do to communicate that obligation to the tenant or owner?

  6. What time sensitivities are in play regarding the problem?

  7. Is there potential liability that needs to be avoided, and if so, what are the steps that need to be taken to avoid those liabilities? Examples of liability include, but are not limited to, the following:

  • The rental property being damaged

  • Occupants of the property being injured or killed

  • Tenant lawsuits against us and the owner for wrongful termination, breach of contract, violation of F.S. 83 pt. 2, personal injury, discrimination, retaliation, etc.

  • Owner lawsuits against us for breach of the PMA and resulting damages

  • Allegations for violation of F.S. ch. 475 (FREC/DBPR complaints)

  • Bad reviews online

  1. What law or contract provision applies to this situation?

  2. What company or legal procedures control the task in question?

  3. If there is more than one method of handling the task in question, what is the method that conforms best to these guiding principles.

These are several principles that will help the property manager in making good decisions to properly manage rental property. A professional property management should have an operations manual, calendaring system, record-tracking software, and automation methods to assist in performing routine tasks, responding to events, coordinating staff and vendors, and enforcing the lease agreement, and the afore-going principles should be incorporated into the process of business.