By The Book
Monday, June 2, 2014
Posted by: Lisa McDuffie
Orlando REALTOR® | May/June 2014
A voluminous set of regulations
govern property management.
Here's cliff's notes to the big six
By Mary Grisch-Bock
Sometimes it seems as if property managers spend a majority of their time memorizing various rules and regulations. New employees in particular are always trying to learn basics such as “when do we return security deposits?” or “what account does this deposit go into?” But one of the most important sets of rules that property managers must be aware of, and have some working knowledge of, are federal laws.
While rote memorization may be overkill, property managers must be aware of the general regulations that these acts encompass, and must know when further research is necessary in order to clarify any issues that may come up.
Here is a summarization of the federal laws that property managers should be familiar with, as well as the possible repercussions if violated.
The Fair Housing Act
The Fair Housing Act prohibits discrimination in the sale, rental, or financing of housing based on race, color, religion, national origin, sex, familial status, or handicap. Penalties for violating the Fair Housing Act are stiff and include revocation of any license held and even possible federal prison. Make sure you and your staff treat all applicants equally.
The Sherman Antitrust Act
This act is designed to promote competition in the open marketplace. While property managers do need to know competitor’s pricing, managers must avoid the appearance of conspiring to fix prices in order to thwart the competition. Only the courts can determine if price fixing has actually occurred, and a conviction can result in both civil and criminal penalties including time in a federal penitentiary. Even simple verbal agreement between property management companies agreeing to maintain similar rents will send a red flag. Remember, all that is necessary is that it looks like price fixing, and you may find yourself in federal court. Avoid even the appearance of price fixing at all costs.
Americans With Disabilities Act
Briefly, the complex and multi-tiered rules of the ADA states that no person may be discriminated against on the basis of disability. The act also covers property management offices, which must be made available to all handicapped individuals.
The Equal Credit Opportunity Act
This act prohibits denying a loan or an extension of credit (rental leases are considered an extension of credit) based on race, color, religion, national origin, sex, marital status, age, or public assistance status. What this really means for property managers is that all lease applicants MUST be evaluated using the same criteria. Potential problems can be warded off by simply using the same tenant application and the same approval criteria for each applicant. No exceptions.
Lead-Based Paint Hazard Reduction Act
This act is applicable only to property managers who currently manage or potentially will manage properties constructed prior to 1978. The act requires property managers currently managing a property built prior to 1978 to disclose to all tenants the presence of any known lead-based paint. Property managers must also provide tenants with copies of any and all available records or reports which pertain to lead-based paint. Managers will also have to provide all tenants with a copy of an information pamphlet published by the Environmental Protection Agency.
Uniform Residential Landlord and Tenant Act
This act was designed to regulate the relationship between property owners/managers and tenants. Under the umbrella of the Uniform Residential Landlord and Tenant Act falls a variety of provisions that property managers must be aware of, including security deposit guidelines such as the time limit managers have to return security deposits to former tenants; guidelines on property owners’/managers’ right to re-enter the property; and no-retaliation provisions that state property owners or managers cannot retaliate against a tenant for reporting a violation to state or federal officials. The consequences for violating any of these provisions vary and can include license forfeiture and monetary penalties.
When familiarizing yourself and your staff with the federal laws, be sure to take a few extra minutes to review applicable Florida laws as well. While some of these acts may be more relevant to your particular type of property management business than others, educating both yourself and your staff about these federal (and state) acts and the repercussion of violating them will ensure compliance, which is the most important thing of all.
By Mary Grisch-Bock of PropertyManager.com, a service of AppFolio Property Manager.