OWNER’S HANDBOOK

OWNER COMMUNICATION WITH RESIDENT

Should I communicate with the Resident?

Almost never. We would say never, but there may be something we have not thought of where it might be appropriate for the owner to communicate with the Resident. However, we have yet to see good things coming from the owner talking directly to the Resident. Why?

Legal complications

Real estate is a highly regulated industry. Especially residential real estate. Residential real estate is regulated at the Federal, state, and city levels. Large government departments backed by lawyers and money stand ready to defend the rights of Residents. Fines, legal fees, and court costs can be levied against a property owner who doesn’t follow the law. Not knowing the law is not an excuse for not keeping the law. Here is a list of some of the laws and agencies regulating residential rental property.

  • South Dakota Landlord Tenant Law enforced by the State of South Dakota
  • Federal Fair Housing Act enforced by the US Department of Housing and Urban Development (HUD)
  • The Serviceman’s Civil Relief Act
  • Fair Credit Reporting Act enforced by the US Federal Trade Commission
  • Fair Debt Collection Practices Act enforced by the US General Trade Commission
  • Lead Renovation, Repair and Painting Rule enforced by the US Environmental Protection Agency

Without an understanding of the law, even a well-meaning owner can easily find themselves in hot water by saying or doing something illegal.

Practical complications

Having one point of contact works well for presenting a unified message to the Resident. It is unsettling to be told one thing by the owner and something different by the property manager. Also, some Residents will play the owner and the property manager off one another. If they get an answer they don’t like from the property manager, they will go to the owner to see if they can get a different answer. In addition, we have years of experience presenting hard issues to Residents. While the message may be the same, how the message is presented can make all the difference between a happy Resident and an unhappy one.

Professional Presentation

Our service sometimes requires us to be tough and to hold a difficult line. When the owner directly communicates with the Resident, the owner can undermine our ability to do our job. A common example is when a Resident is not paying rent. Around the 4th of the month we have the Sheriff serve the Resident with a 3 day notice to pay or quit. While this can seem harsh, it is a necessary step before proceeding with an eviction or for the Resident to go ask the County for financial aid. Because the property manager has just served them with a 3 day notice, the Resident may go to the owner to ask for more time. Or, they might give the owner some money. If the owner gives a verbal agreement for more time or accepts the money, we have to start the whole process over.

As you can see, direct communication between the owner and the Resident can create costly complications for all involved. We ask that all communication pass through our office. We take this issue so seriously that in the latest edition of our management agreement it is grounds for termination. Below is the paragraph from the current management agreement dealing with owner’s contact with Residents.

“Owner agrees Owner will not without Manager’s prior approval contact a tenant in person, by mail, telephone, email or otherwise. Owner further agrees if Owner is contacted by a tenant, Owner will direct to Manager all contact concerning the rental and management of the Property throughout the duration of this Agreement. Owner further agrees its contact with a tenant may be grounds for Manager’s termination of this Agreement pursuant to Section 18. Further, Manager will not be responsible for, and will defend, indemnify and hold harmless Manager for Owner’s acts and omissions that violate any laws, including, but not limited to, federal or state fair housing laws, constitutes harassment of tenant, or amends a tenant’s rental/lease agreement in any way.”

We understand property management and property investments. With over thirty years’ experience in property management and more than 300 offices in the United States and Canada, we have become the largest property management franchise in North America.

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