We had a great webinar with Daniel Bornstein last Thursday. He shared his perspective on the top 10 property management pitfalls that cost business money and can potentially get them into legal trouble.
There were so many questions we didn’t get to all of them on the call so Daniel was kind enough to answer your questions below.
Q. If the owner fails to give the deposit back to the tenant after move-out due to a repair dispute, they are liable?
A. That is correct
Q. If you provided education regularly, does an employee on-site have a personal liability if they are the procurement error of a liability suit?
A. Education is your best insulation from liability even if there was an employee error.
Q. Do you consider the California Association of Realtor (CAR) forms comprehensive enough?
A. The C.A.R. agreement could be supplemented and there are more comprehensive agreements available.
Q. What amounts of liability insurance do you recommend for the tenant?
A. Tenants should have liability insurance. The 3 factors that should be considered are:
1. Size of the apartment building
2. Amount of rent being paid
3. Quality of the building
Q. When you state that the property manager should be named as beneficiary on insurance, do you mean the property manager personally or the property management company?
A. The property management company.
Q. In our agreement, we have the option of canceling if the property does not meet our “minimum home requirements.” Is that sufficient?
A. As the property manager, you can terminate them if they do not meet the minimum standards that you set for that habitat. For example, if the building is hit by the City or County with violations then you have the right to terminate.
Q. Can an unlicensed person set an appointment and open up a rental unit for a potential tenant to view it? This would be for a house or condo we manage, not an apartment community. He/she would only open the property for them and provide an informational flier to them, prepared by the broker. This is in California.
A. That is OK if the person is simply handling administrative matters. Opening the door to a unit is potentially more problematic, but probably ok.
Q. I know you mentioned never hiring an unlicensed handyman to do work on a heater or some major system, because of the liability involved. What are your thoughts about hiring an unlicensed handyman to do minor repairs (i.e. paint, sink repair, yard work, etc.) that are under $500? I understand there is no “handyman” license in California. I find many companies do this for minor items. Is this foolish in your opinion?
A. It is acceptable, though “drift” occurs often and the handyman starts doing work that requires a permit (and potential licensing).