Author’s Note: I wrote this article before COVID-19 had spiraled into the global pandemic it has since become. I aim to have another article ready soon that deals specifically with managing property during a challenging time like the current one. Until then, I hope this article serves as a helpful template for mastering property maintenance under more normal circumstances.
Property ownership comes with risk, but owners can take strategic steps to minimize it.
Having worked in the property management industry for a quarter-century, I occasionally receive requests to serve as an expert witness in lawsuits. What that really means is that I’m going to learn about a habitability claim, which has turned into a costly lawsuit for the property owner.
How this usually works is, I get a call from an attorney who has vetted my background, and they invite me to drive out to an apartment complex, where they walk me through the property as tenants point out various issues—this plumbing problem has gone unrepaired, that spot on the ceiling looks like mold, and so on and so forth. Sometimes the claim of inhabitability is valid, and sometimes it’s little more than an attorney’s attempt to drum up business by taking advantage of a landlord. Either way, habitability lawsuits pose a real threat to owners, and they’re one of the easiest ways owners can wind up liable for hundreds of thousands of dollars in debt. So I’m devoting this article to explaining the ways a professional property manager can protect property owners from liability.
In the most recent case I served on, an attorney walked me from apartment to apartment on a property in Reseda while tenants highlighted maintenance issues. But something stood out to me as strange: even though we were there about a complaint concerning mold, not a single tenant mentioned mold. They pointed out problems here and there that the owner should have fixed and had neglected, but it became clear to me that the suing attorney had spearheaded the lawsuit, having seen an opportunity and gone door to door in the complex to get tenants onboard. I could also tell that he was likely going to win, and it was going to cost the owner thousands of dollars. It reminded me that there are people who make their living by suing property owners, and they’re good at their jobs. So even though the owner of this building could rightfully bemoan the ethics of the lawsuit against him, it was his responsibility to do everything in his power to maintain his property to the legal standard, and to eliminate his vulnerability to this type of action, which he had not done. That’s where a professional property management company can help.
As a property manager myself, I’ve heard these stories from countless owners, always unfortunately after the fact and before they hire us, which means the damage is already done. That’s a shame, because in almost every instance, I can point to a way that diligent property management would’ve prevented the entire headache. For instance, in the case of the building in Reseda, a professional property management company would have repaired all the reported issues in a timely manner and would’ve spotted the unreported issues during their regularly scheduled twice-annual walkthrough of every unit. And when it comes to mold, a property manager should always err on the side of caution. If a tenant even says what we call “the m-word,” we test for it immediately.
In another case I served on, I brought our Director of Construction Juan Quezada along with me to the site we were observing downtown. This was for another lawsuit regarding habitability of apartment units self-managed by the owner, but while walking from one unit to another, we noticed something that nobody involved in the suit had addressed: the courtyard swimming pool had no fencing whatsoever surrounding it. This is extremely dangerous—think of the young children in the building and the obvious way this could end in tragedy. It’s also entirely illegal, and thus makes the owner of the building liable for any number of the terrible possible outcomes that could result from it. Any property manager worth their salt would pick up on this indiscretion immediately, recognize its violation of building and safety code, and correct it for both the safety of the tenants and the protection of the owner from liability.
The fact of the matter is that owning an apartment building comes with a complex legal burden of responsibility. If you’re not well-versed in the legal language of building and safety code or prepared to enforce critical legal standards to a T on your property, your best bet for limiting your liability is hiring a property management service. The surest way to keep your tenants safe and keep you out of court is to entrust this responsibility to professionals whose job it is to prevent such disasters.
David Crown is the C.E.O. of Los Angeles Property Management Group, and has over twenty-five years of experience managing all types of income properties. A hands-on leader who has managed properties in 16 states, Mr. Crown has been asked to serve as an expert witness in property management matters, and currently serves on the Forbes Real Estate Council. He can be reached directly at (818)646-8151.