Any moisture issues the owner has had in (and around) the property, in the past five years, needs to be disclosed to the tenant before they take possession. You need to notify the tenant if the owner has had a flood, leak, mold, water damage etc. Failure to disclose this can have serious consequences and we’ve fought several battles with tenants over this disclosure. Make sure the owner signs this and have the tenant sign a copy before they move in.

Tenants get irate when they discover ‘the owner had moisture/mold issues and wet basement with previous tenants’ (or while they lived there) and feel deceived when it’s not disclosed before they took possession. When tenants feel tricked or deceived they talk to lawyers. The manager usually ends up being blamed by the tenant and ends up sharing in their moving costs.

Owners don’t think to tell you ‘unless you ask’ so be sure to make an issue out of this. We’ve been burned more than once over this failure to ask, and get hold harmless agreements from the owner. You can use the same owner signed original over and over again so ‘don’t use the original.’ Make copies for future tenants to execute.

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Tell your owner/client clearly about your trust account requirements and how your state law regulates the management of those funds. NEVER cover their expenses and send them an invoice or you’ll be bankrolling them forever. Make it clear they need to pre-fund maintenance, maintain a minimum account balance (owner reserve) and keep all trust accounts positive. Let them know you will be depositing all funds you receive into a trust account and report to them monthly. This disclosure takes care of all those issues and gives you a document to point back to when they resist depositing money with you before you pull the trigger on normal maintenance and turnkey projects. This is often hard to manage because owners want to stay in control. They want to pay off an invoice, after the job is done, and they verify it. After the job is done is never the time to argue about money.

Set this up right and you’ll have no trouble with the administration of your owner’s trust account. Make it clear that you intend to follow the licensing and trust account laws of your state and they need to embrace and cooperate with that effort or find another manager. You are no different than a bank, brokerage house or sales company. You must follow the rules of your licensing bureau and ‘having the money in the owners trust account BEFORE you order the work’ is part of that compliance issue.

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Owners love to leave personal property behind thinking it will still be there when they return. It seldom is and guess who they want to hold responsible for protecting and managing it? YOU of course. No matter what you say to them, they think you should be the guardian of their stuff, and see to it that it gets returned in good shape. Protect yourself. Take yourself off the hook in advance and make it clear ‘you’re not the manager of their personal property.’ For years we tried to accomplish this with a stip in the management agreement but it didn’t work. You need to draw their special attention to this Issue and this document accomplishes that.

This document tells them to take their personal property out or don’t expect to see it ever again. They will leave stuff locked in a closet in the basement and expect you to manage it as well. They will expect you to manage the water leaks and mold on their stuff in their Owner’s Closet and blame you when the rodents find their way in. Make it clear you’ll list items they leave behind but they can’t hold you accountable when it turns up missing or broken.
Note: when the sheriff and his boys start tossing out the tenant’s stuff they seldom ask “is this yours, or the owners.” You need this document to protect yourself.

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One of the huge risks managers bare today is renting a property, move the family in, then watching as it goes into foreclosure and the tenant gets evicted by the lender. We’ve had it happen more than we’d like to admit. If you don’t protect yourself you will get sued by the tenant for violation of your promise of quiet enjoyment, unlawful dispossessory or constructive eviction. When the owner signs this document they are promising the mortgage is current; if it goes into foreclosure they will notify you immediately (not that it will help any), and (here is the big one) they will pay your attorney fees if you get sued by the tenant over the foreclosure issues. Don’t make the mistake of thinking, “if the owner loses the home in a foreclosure they won’t have any money to defend you, so why go through the effort.” Wrong!!!

Many landlords have great credit, own their own home, have good paying jobs and will still let their rentals go into foreclosure. Don’t think they are broke just because they let the rental go back to the bank. Having them defend you is good protection and they will sign this without question if they think they will not be foreclosed on. If they hesitate signing this you should be suspicious and do more research. Get this signed up front and protect yourself from the carnage of a foreclosure.

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The IRS requires that you report to them (with a copy to your owner) at the end of every year, regarding how much rent you collected from the tenant on their behalf. Your report is due to the IRS before January 31st and the penalties against YOU for failure to report are substantial. This is the document the owner signs acknowledging this report and your requirement to send it to the IRS. Make sure they sign it or you will have a very unhappy owner when you do your reporting.

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Houses built before 1978 often had lead in the paint which has been discovered to be toxic and a serious health hazard for kids under 8 and pregnant women. Federal law requires that you have the owner and tenant sign this to disclose the potential presence of (or lack of) this poison in the home. The owner signs this document to reveal to you (and the tenant) any knowledge they have regarding any lead paint in their home. Copy the original the owner signs and have every tenant sign (a copy) before you move them in. Use the same original over and over. Just have the tenant sign a copy and keep it with other important tenant documents.

Every one of these documents is the result of getting burned, blamed, fined or fired for something we either didn’t do right or didn’t disclose adequately. You can have your attorney draft each of these documents and tweak them over the next 10 years as you go through your learning curves, or, download them and be up and running instantly. It’s not a matter of IF you’ll need them, but WHEN. Protecting Yourself is a full time effort in property management.

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Never manage a rental unless the owner/client adds your company name to their landlord policy as an additional insured. This is standard practice for the insurance companies and will do it at no cost to your client. When this authorization is signed by the owner you’ll send it to their insurance agent who will add you on the policy and send you a declaration page (Dec Page) evidencing your coverage. Don’t manage the property without it. Other managers understand this and so does the insurance carrier. It’s the owner that is new to this process. Don’t let the owner talk you out of it.

E&O policies and General Liability policies for property managers often mandate that this is in place or your coverage is diminished (or voided). You’re not covered for property damage because you don’t own the property. You’re just covered for liability when someone is caught in a fire, falls off the deck or drowns in the tub. We’ve had all these things happen and the owner’s policy covered us instead of our GL policy. Make it clear to the owner that insurers understand this and will add you without cost.

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You’ll need a form for the owner to describe all the features of their property including number of bedrooms, baths, schools, community amenities, which appliances are included, utilities included and other features. Don’t let them ‘push this off on you.’ If there is an error they will blame YOU and THEY should have the information in THEIR files. Often you’ll advertise a property with a washer/dryer and the owner will take it, leaving you to buy one for the tenant (or other crazy things like this). We’ve made the mistake many times of identifying the wrong schools, listing the microwave when the owner takes them, forgetting that the security system was the tenant's expense and so on. There are lots of ways to screw this up so make the owner complete it. There is more than one way to do this. This format is sufficient for most rental houses but will need to be tweaked by you to fit your model.

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This document gives you the authority to automatically credit and debit funds from the owner’s account as necessary and remains in effect until you receive written notice to discontinue.

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This document helps clarify ownership, who’s speaking for the owner(s) (or entity). This is a data-collection form.

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We all add stipulations in a lease that we know in advance can’t be monitored, tracked or enforced. Occasionally we take over someone else's lease and find stipulations that are not trackable, measurable or enforceable. Examples might include: no pets over 10 pounds or no indoor pets, no smoking, set temperature at 70° during cold weather, tenant agrees to change the furnace filter every month, guests can only stay three days and tenant agrees to water the shrubbery. These types of stipulations are impossible to monitor, measure and enforce and disclosing this to the owner lowers the risk of the manager being sued for professional liability or malpractice when they leave these items in the lease and the manager has no way to track them.  

Note: If you use the Crown lease, you don’t need this package because we don’t put untrackable and unenforceable language of this nature in the lease.

Here’s the problem. 

Owners naturally believe if it’s In the lease, it’s enforceable and will hold it against their manager if not enforced. Owners think you’re the expert and they are paying you to get it right and draft leases that are enforceable. It is incumbent on YOU to get it right and make it legal and enforceable or YOU are going to be blamed if it hits the fan.  

To protect yourself you must remove (or at least lower) this liability from your company by either removing this kind of language from the lease or disclosing the reality of the lack of tracking and enforcing it to your owner . You may want to make this a housekeeping document to be signed by the owner when you take on a new property. You could use this language in an owner newsletter or annual report and disclosure. One way or another you should send it out (maybe more than once a year) to remind owners that these kinds of stipulations, although added in most leases, cannot be tracked, monitored, or enforced . This is one more CYA document to protect your company from the many liabilities of this business; especially liability from an angry owner expecting lease terms to be enforced.  

This product includes the disclosure language to the owner and a training document for the manager and their staff regarding how and when to implement this document. 

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Every office needs to develop an internal tracking form to assure all the owner sign up documents are in the file and all the issues have been addressed.

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