Accidents and disasters are unpredictable, and many factors and property management issues can affect the safety of your property and its residents. Assessing your risk and implementing a loss-prevention program is critical to your business plan. At a minimum, your program should include:
- A property management policy;
- Loss prevention checklists for your specific properties; and
- Methods for responding to unsafe conditions and repair requests.
Property management issues can become overwhelming. You may wonder where to focus your risk mitigation efforts. Let’s identify some of the major risks affecting the rental market.
Safety, Maintenance and Repairs
Despite your best efforts, injuries and accidents can happen on your property. If one occurs, it’s important to collect as many details about the event as possible.
This information can be helpful when filing a claim and correcting safety issues. During your investigation, make sure to:
- Get a detailed account from the injured person (including how and where the accident took place) and statements from witnesses.
- Verify what property was involved and perform a thorough assessment (photos should be taken, if possible).
- Determine the primary causes of the incident based on the information gathered (i.e., worn or damaged flooring, broken railings, uneven sidewalks, etc.).
Immediately correct identified problems. Proactive maintenance and repair initiatives can help reduce costs, retain tenants and attract new residents. Performing daily property checks is helpful, but there’s much more you can do. Residents are your most valuable resource and should be encouraged to voice concerns and report problems. A formal process for submitting repair requests can help you organize and prioritize time-sensitive issues (i.e., a water leak). Not only will this help protect the integrity of your property, but it can also improve your reputation as a property manager.
Codes and Coverage
Some of the more complicated property management issues involve compliance with local laws and national standards when repairing and renovating a property. When it comes to the safety of your residents or commercial tenants, you are responsible for knowing all building laws and safety codes. Hiring qualified, licensed contractors can help ensure these laws and codes are followed. Be sure to verify that all vendors and contractors working on your property are insured. Their policies should cover all relevant risks and have sufficient limits. Obtaining copies of their certificates of insurance (COIs) can help confirm their coverage. These should be requested annually or at the beginning of a new job / contract. We suggest filing these electronically and noting expiration dates.
Exposures to Watch
Certain property management issues are even more challenging in an apartment or condo setting. Multiple dwellings can be affected at once, and hundreds of residents or tenants can be instantly displaced. Due to this ripple effect, pay close attention to the exposures listed below.
Water is a common source of property damage. Mold can easily spread from unit to unit, causing damage and leaving stains and smells. It can be expensive to remediate and pose serious health risks. Educate tenants on how to help prevent water damage (i.e., maintaining temperatures during cold weather to prevent frozen / bursting pipes) and encourage immediate reporting of water intrusion.
Fire is particularly concerning in apartments and condos. Many residents live on higher floors, making evacuations more difficult. For your residents’ safety, it’s vital to comply with fire codes. Continually evaluate your property for potential fire hazards and educate residents on prevention efforts, as well as the importance of keeping extinguishers in the units.
Decks and Balconies
Outdoor spaces are appealing to tenants, but serious injuries can result from deteriorated or poorly constructed decks and balconies. Proper guardrails should always be in place to prevent falls and stop objects from falling onto people below. Schedule regular deck maintenance on all units to help ensure structural integrity.
Doors, Locks & Security Measures
Property managers are expected to provide a reasonable degree of security. Doors and locks are an obvious way to control access to buildings and individual units. Eliminate conditions that could foster criminal activity (i.e., bushes near a building entrance that could hide a would-be intruder). Ensure that common areas are well lit and consider installing surveillance cameras and hiring a patrol guard.
Hot Tubs, Pools & Saunas
These amenities create liability for drownings, slips and falls. Ensure that rescue equipment is readily available in all swimming facilities. Additional concerns include water quality and chemical management. It can be helpful to hire professionals such as pool service techs and lifeguards.
While often overlooked, air quality can create serious property management issues. Pollution can cause health problems ranging from minor discomfort to debilitating chronic illness. Schedule regular maintenance on your building equipment and remind tenants to report any unusual or unpleasant odors.
Storms can produce a variety of exposures. Wind, hail, rain and lightning can cause property damage, and snow and ice can lead to slips and falls. Prepare your property for severe weather and develop response plans to help minimize damage and injuries.
Strategic Solutions for Your Property Problems
While we have covered some key property management issues, this list is not exhaustive. A qualified insurance professional can assist with these exposures and many more. The right combination of insurance and risk-mitigation strategies can help protect your property, your tenants and your bottom line. To learn more, contact our Real Estate Risk Services Team.
This article originally appeared in the 2019 | ISSUE ONE of the SilverLink magazine, under the title “Rental Risk: Key Property Management Issues.” To receive a complimentary subscription to the SilverLink magazine, sign up here.