Part of running any successful business is complying with the many legal standards that come with it. Property Management is a tightly regulated industry as it involves the most paramount of all human needs—a place to call home. As a result, each state government has its own set of rules to ensure that every human is being treated with the respect they deserve. That applies to tenants and landlords. However, there are times when situations arise and someone has violated those rules. When this happens, don’t be the PM that got sued on a technicality.
Here are some of the common mistakes that property managers get sued for every day, as well as some of the steps you can take to protect yourself and make sure it never happens to you.
#1: Don’t Get Sued for Accessibility Violations
When it comes to the ADA, compliance is key. The Americans with Disabilities Act requires that every residential building be handicap accessible on all levels, and also requires a certain number of handicap parking spaces and rental units based on the size of the structure. Many lawyers look for these violations in residential areas, known as “Drive-by lawsuits.” One look at the layout of your parking lot will tell them if they’ve got an easy win at your expense. If you feel your units are not ADA compliant, check with the official .gov website or with your lawyer to make sure that you are not currently violating any regulations that are relatively easy to fix.
#2: Don’t Get Sued for Fair Housing’s Biggest Issues
Violations of Fair Housing laws are the most common type of lawsuits that landlords deal with and cover a wide range of protected classes. While these suits are mostly violations due to the treatment of disabled persons as a result of parking, mental illness, or refusal to allow service animals, this also includes discrimination (or preferential treatment) of any person based on race, familial status, or gender identity. If you as a landlord need to take action against or evict someone of a protected class, make sure that you have documented your dispute in a professional and objective manner as you would any other renter.
#3: Don’t Get Sued Over Employment Issues
Maintaining a positive rapport with your employees is just as important as it is with your renters. Be sure to stay current on all employment laws, as these can change from year to year and from state to state. This includes laws around minimum wage, sick leave accrual, and wage equality, but property managers are most commonly sued by their employees for sexual harassment charges or lodging compensation. In preventing these types of cases, require mandatory sexual harassment training for your entire team, and hire a good employment law attorney to ensure that your company’s employment practices are all-around sue-proof.
#4: Don’t Get Sued over Assistive Animals in the Workplace
In some cases, you employees may also need to bring assistive animals with them into the workplace. That employee may need a seeing eye dog for a vision impairment, or may need to bring an animal to cope with diagnosed levels of anxiety or stress. Employers are expected to evaluate each request for accommodation on a case-by-case basis, and you may face lawsuits if you fail to properly accommodate employees who need the use of an assistive animal based on these standards. As an employer, you have several rights concerning your employee and their assistive animal:
You can request:
- Documentation identifying the type of animal
- Requirements for the animal in the workplace
- A letter from a health-care provider acknowledging the reasons your employee needs their animal to perform necessary work function
- That the animal must be well behaved and trained to provide assistance for that employee’s disability
#5 Don’t Get Sued in a Class Action Lawsuit
A class action lawsuit is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member of that group. This means that an entire group of renters can file suit if they feel they are all being impacted by a particular issue, with the potential for each of them to receive damages if they win. These types of suits often include:
Illegal Late Fees— the landlord places a fee on an overdue payment or eviction that was not otherwise specified in the lease.
Security Deposits— the landlord illegally withholds a security deposit in a manner inconsistent with the lease agreement or with state law.
Breach of Personal Data— renter’s data is in adequately secured by the landlord and is released to the public or stolen.
Environmental Issues— inadequate notice when performing pest control, or failure to comply with mold regulations are two very easy ways to a class action suit.
How to Avoid Lawsuits: A Quick Checklist
The best way to avoid a lawsuit is to make sure that any aspect of your business involving legal regulation is airtight. When drafting leases or employment agreements, make sure that they are legally appropriate and comply with all current laws. These types of laws are also subject to frequent change, so have a lawyer or professional representative review all legal documents on a regular basis. This includes leases, rental applications, community rules, rental criteria, and notices. Secondly, put procedures in place for handling disability requests from both your renters and your employees, and have a compliance review completed for all of your properties on a regular basis. It may seem costly up front, but it could protect you from huge damages (and headaches) in court.
If you see any trouble brewing, contact a legal professional in the early stages to make sure that you are not hurting your own case. Firms like Kimball, Tirey, and St. John LLP are specially equipped to handle these types of cases and can help you avoid costly court cases.
All these great tips are expanded on in this recent webinar, How Not to Get Sued (sponsored by Inman) featuring Puneet Singh, managing partner at Kimball, Tirey, and St. John.
Webinar Recording (Due to a recording issue, the webinar begins during speaker Puneet Singh’s introduction. But don’t worry, all the great content she covers is in there!)
We will be adding a Q&A with Puneet Singh to this post soon, but in the meantime, if you have any additional questions for Puneet, you can contact her at via email.