Rental Wards: 3 Items To Address Before Hiring A Property Management Firm
If you're hiring a property management (PM) company, such as Bradley Scott, Inc., for the first time, you need to negotiate contract terms and understand all of the fine print before you sign any agreements.
There are 3 vital issues to settle:
How repairs and contractors are handled.
How is a repair call initiated? What is the usual response time? How are home repair contractors screened? These are some of the questions to ask the PM representative.
You may be obligated to use the contractors the PM selects, so iron out the details if you want to use the services of a home repair team you trust. The same applies if you normally do repairs yourself.
Ask how the PM team verifies that outside contractors are bonded, licensed, and insured. You don't need to have your homeowners insurance policy hit with a claim for a contractor injury, and you definitely want guaranteed compensation if a home repair firm damages or steals your property.
The effective dates of the property management contract.
Most PM firms want you to sign a year-long contract to lock you in as a client. However, if you're only renting out a few properties, they are more likely to be flexible about the length of your agreement.
Ask for a stipulation that you can cancel the contract for no specified cause as long as you give at least 30 days prior notice. This will effectively make your contract a month-to-month agreement. When you're satisfied overall with a PM firm, sign a longer-term contract if there are savings offered or the PM firm is very competent and reliable.
How the property management company deals with tenants.
You want to hire a PM team that understands all of the nuances and specifics of tenant law. If tenants are treated unfairly, discriminated against, or unlawfully evicted from your property, you could be liable for damages.
Ask potential PM firms to tell you about their eviction procedures, their adherence to local laws and codes, and their eviction percentages. Find out why most tenants are evicted and how the PMs' tenant-screening process works to avoid future evictions.
Also make sure they know the legal occupancy allowances for your locale. For example, a single-family-zoned rental is not limited by law to only nuclear families (mom and pop plus kiddies). Normally, local ordinances allow several unrelated adults to live together as a household unit.
Be certain the PM company will treat tenants with respect and answer phone calls in a timely manner by pretending to be a tenant yourself when you check out firms for the first time. This should give you a good indication of the attitude a firm takes when dealing with renters.
These 3 issues must be resolved to your satisfaction before you sign any property management agreement. Once you and the PM firm fully understand the rules and the limits, you both make a solid property rental team.