Can you imagine any major corporation operating without the consultation and advice from attorneys who specialize in that business? Would seem pretty foolish would it not? Of course, because companies must operate within the laws and regulations that govern their business and the company faces risks of liability every day, just by being in business. Property management companies are no different. They need an attorney who is intimately familiar with the vast legal issues that arise in this business.
The issues that property management companies face arise from a variety of legal fronts. For example,
Florida Residential Landlord-Tenant Act
Florida and federal Fair Housing laws
Florida Statutes ch. 475
Florida and federal laws regarding Service Members
Of course, there is the body of court decisions that affects relevant statutes that govern the property management business, and the number of cases to be familiar with are plenty.
But do not be mistaken, property management companies should not consider engaging an attorney only when problems get too large or serious. The goal is to avoid big problems altogether, and even small problems, when not handled properly, can turn into much bigger problems and cost a lot of money to resolve. Property management, by its nature, is a daily operation, especially as the company grows the number of units it manages. Thus, it behooves property management companies to involve legal counsel when issues first arise, to ensure the proper course is taken.
What’s more, the potential for adversarial positions are continual, as tenants and landlords may view issues from vary different perspectives, reaching very different conclusions about legal obligations. Landlords demand that the property manager do things their way, and tenants do the same. Without continual legal advice from a landlord-tenant attorney, property managers are left to decide legal issues on their own, who, though they may have much experience in property management, do not know how to analyze and resolve legal issues, nor are they licensed to do so on behalf of the landlord. Property managers can enter into very dangerous ground when they think they can resolve legal issues for the landlord.
While some property management companies may decide not to bear the expense of having a landlord-tenant attorney on staff or retainer, there is a decided advantage to property management companies who do, and by virtue of that relationship, the landlord receives the benefits that come with the property management company’s having that attorney on staff or retainer.
And let's be clear, an experience landlord-tenant attorney who knows property management operations well can do more than counsel the property management company on legal issues. The attorney can help craft the management process and system, internal checks and balances, conditional logic of decisions, standard communications templates, prepare forms and agreements, and more. In truth, property management involves more legal issues and processes than most people realize.
Having been a practicing attorney since 2004 and been a real estate broker in the property management business, I have seen just how many legal issues arise on a day-to-day business. In the property management business, I wear both “hats” every day. As disputes, conflicts and issues arise with tenants, making the right decision necessarily involves a legal analysis based on the tenant’s obligations under the Landlord-Tenant Act and the lease agreement, as well as a complete understanding of contract law and tort law. The same is true as it concerns issues that arise with the landlord. Daily decisions being made involve not only and just the immediate response and remedy but also understanding the potentials of what litigation would look like on the issue, and what issues a jury or judge would have to decide at a trial. Having the holistic view of every decision being made is key to providing the best service possible for the landlord and keeping problems to a minimum for staff and tenants.
One of the main purposes that property management companies provide to the landlord is reducing liability risks. But the truth is, if the property management company does not have the advice of legal experts, the property management company may lack much in the way of providing this purpose and benefit.
If you are a serious landlord or investor, look for a property management company that has an experienced landlord-tenant attorney on staff or retainer. It matters. In fact, it is on Legal Zoom's top list of things landlords need when renting property.
At aDoor Property Management, LLC, our President and broker is attorney Tim Baldwin, who has specialized in landlord-tenant law since 2007. aDoor knows the importance of having an attorney help lead the company in the right direction and ensure that daily operations are where they need to be to maximize service and protect our owners.
(If you are a landlord or real estate investor and are looking for professional, quality property management services, click below and submit your application for services.)
See also Property Management Law Solutions podcast, episode 5 (pt. 1):