08/01/2009

5 Steps for Smooth Tenant Relations

 
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Though market conditions for multi-family housing continue to worsen, the decline is slowing, according to the Washington, D.C.-based National Multi Housing Council (NMHC). Now’s the perfect time to gain some ground – sharpen your property management skills and attract new renters, satisfy your current tenants, and keep your head above water.

“In these troubling times, professional management of multi-family assets has never been so important,” says Matthew D. Summers, president of management at Houston-based Kaplan Management Co. Inc. If you’re facing evictions, delinquent payments, or other troubling situations, check out these five steps for smooth tenant relations. Your tenants (and your bottom line) will thank you.

 

1. Excel in Customer Service

“Residents should be treated as if they were living in a five-star hotel,” says Summers. “Unparalleled customer service is the key to having happy residents who stay put and refer others.” Other apartment managers agree. “Nothing can replace a friendly, customer-service-oriented property staff,” says Fran Turano, education and advice specialist for the California Apartment Association (CAA) and on-site property manager at Radio Apartments in San Jose, CA. “People will always need a place to live and call home, and rental property owners and managers will always have the opportunity to provide that to millions of Americans,” she says. Practiced and professional customer service could ensure that renters choose your facilities.

Legislation You Should Know About

Hear what Lisa Blackwell, vice president, housing policy, at the Washington, D.C.-based National Multi Housing Council (NMHC), has to say about current legislation affecting the multi-family housing industry:

“President Obama recently signed mortgage reform and foreclosure prevention legislation (PL 111-22) that includes provisions protecting renters of properties facing foreclosure. The new law requires the purchaser of a foreclosed property to give renters a 90-day pre-eviction notice. It also allows renters to remain in the property until the end of their leases, unless the purchaser occupies the property as a primary residence, in which case the owner would be required to give a 90-day notice. The bill also requires the “immediate successor in interest” of a foreclosed property to assume any existing Section 8 housing assistance payment contracts and allow Section 8 renters to remain in place for the term of the lease.

“NMHC opposed the Section 8 provisions in Congressional testimony in April, arguing that new owners should not be subject to a contract agreed to by a previous owner and that imposing additional constraints on the apartment sector would discourage investment in rental housing and prevent foreclosed apartment properties from quickly and easily moving to new owners. The renter protection provisions of the law became effective May 20, 2009, immediately upon enactment. None of these provisions preempt more protective state and local laws. All of the renter protection provisions expire at the end of 2012.

“Also, in reaction to the foreclosure crisis in single-family housing and condominiums, the U.S. House of Representatives approved mortgage reform legislation in May that, unfortunately, includes provisions of serious concern to the apartment sector that could be used to prematurely force properties into bankruptcy and then sell them at a lower price to an entity that guarantees to convert them to affordable housing. During floor debate on the Mortgage Reform and Anti-Predatory Lending Act of 2009 (HR 1728), lawmakers approved an amendment proposed by Rep. Nydia Velazquez (D-NY) that would allow the government to intervene when an apartment property is delinquent, at risk of default, at risk of disinvestment, or in foreclosure. 

“Specifically, the amendment directs HUD and the Treasury Department to work together to create a loan modification program for at-risk multi-family properties. The bill doesn’t target any specific level of mortgage distress, property condition, or occupancy level, but gives the government latitude as to when it can intervene. 

“Properties could be subject to government intervention, including, but not limited to, restructuring the existing mortgage through interest rate or principal reductions or other action, transferring of the property through foreclosure or deed-in-lieu-of-foreclosure, or a combination of actions to restructure the debt and ownership transfer. 

“In separate action, Rep. Bob Filner (D-CA) successfully attached an amendment to the measure that would require apartment owners to notify current or prospective renters whenever a property is in default or foreclosure. Importantly, the amendment doesn’t limit this requirement to monetary defaults, and thus would include non-monetary defaults, which are often quickly remedied. 

“Although we successfully secured some modifications to the forced foreclosure amendment, it remains extremely onerous and we’re aggressively opposing it. If enacted, not only would it violate the property rights of existing owners, but it also threatens to severely curtail lending in the apartment sector.

“We’re also educating elected officials that the ill-advised notification language will unduly alarm residents and may, in fact, trigger a foreclosure or financial stress on a property by discouraging existing residents from renewing their leases and prospective residents from signing a lease. Moreover, the language is not only damaging, but unnecessary, as state laws already ensure an orderly transfer of ownership in the case of an apartment property foreclosure.”

For more information, visit www.nmhc.org.

“Continue to appreciate your residents after they’ve moved in, not just when you’re trying to get them to lease,” says Jenna Varrone, resident relations manager at Colorado Springs, CO-based Sunflower Management. Varrone lists common sense, kindness, patience, and consistency as her keys to handling renter relations. “If you want your residents to respect you, then you must show them respect. I’ve heard too many stories about residents who have been mistreated by their property managers.”

Train your office staff on phone manners, conducting in-person conversations, and showing courtesy, even if it isn’t returned.

 

2. Quickly Address Complaints

A surefire way to let your tenants know you care is by promptly addressing their complaints, no matter how trivial. “Encourage tenants to come to you with any complaints as quickly as possible,” says Michael Monteiro, former multi-family housing owner and president and co-founder of Buildium Online Property Management Software, Boston. “Provide a number they can call at all hours, and be sure the voicemail greeting includes an emergency number,” he says. Having protocol for how to/who will address complaints will help with expediency and let your tenants know you respect them. “Always make sure you let tenants know when a complaint has been resolved. And, if a complaint can’t be resolved immediately, be sure to let your tenants know that you’re on the case,” says Monteiro.

“Residents expect to be received with a compassionate ear and a receptive disposition. As long as the site staff accommodates this expectation, there are very few problems that can’t be handled at the site level. Those complaints of a more severe ilk, or those involving legal issues, should be referred to a corporate level,” says Summers, who notes that, logistically, written and verbal complaints should receive written responses.

Varrone encourages checking into the origin of every complaint. “Always check every story, because each story will be different,” she says. “If the police were involved, then get a copy of the report. Do what you can to keep the offenders from knowing who complained.”

Not checking into complaints or ignoring them could lead to even bigger problems. “All complaints should be treated with respect and addressed as quickly as possible,” says Turano. “If a resident feels shorted by your lack of attention and response to a complaint, he or she may claim that you’re discriminating against him/her and call for assistance from a fair housing rights organization. That will force you to spend time and effort rebutting the charge. If you can’t prove that you demonstrated the right response, it could result in a significant fine.”

According to Turano, residents whose complaints are ignored might go from great residents to serial complainers, creating more stress for you. Also, legitimate complaints about repairs that aren’t heeded can turn a small leak into a floor replacement, “so it’s wise to find out what the maintenance issue is as soon as reasonable for the benefit of the resident and the property owner,” advises Turano.

 

3. Document Everything

To avoid legal issues down the road, and for simply setting the record straight, taking the time for thorough documentation is vital. “Without putting the proper documentation in place, you have no paper trail, and the simplest issues can end up badly if you can’t prove what happened and back it up with the notices you’ve issued,” says Turano.

Here are some instances where documentation is a must:

  • Scanning and filing copies of rent checks or other payments.
  • Maintenance checklists signed by witnesses.
  • Keeping copies of complaints filed by or against tenants.
  • Having a written record of any notices served (including phone calls made, messages left, notes left on doors, etc.) or any actions taken against tenants.
  • Any police reports or legal documents that may be necessary or helpful in court.

4. Take Suggestions for Improvement

Keeping your tenants satisfied with your property and its operation is crucial for retention. “Your residents are your income,” says Varrone. “If they’re happy with the property manager, chances are good that they’ll stay with you even if they don’t necessarily like where they’re living.” One way to engage tenants and increase satisfaction is by encouraging and listening to suggestions.

“All suggestions should be genuinely considered and receive a written, well-considered response from the manager,” says Summers, who adds that, if implemented, credit for the idea should go to the tenant or staff person who suggested it. “A good idea can and will come from many places, if you keep an open mind,” says Turano. “Our eyes may see the community in a much different way than a resident’s. It’s always proper to thank residents for their input and mull it over. Some properties actually solicit ideas for improvements from residents. But, be careful what you ask for.”

When your tenants’ suggestions (or your own bright ideas) are worth implementing, go for it. Improvements, however small, will definitely make a difference and increase renter satisfaction and your attractiveness to new renters. “Invest in the property,” says Monteiro. “Many inexpensive improvements can go a long way toward making your tenants happy. Whether it’s repairing a broken light or repainting the hallway, improvements like these show you care while maintaining property value.”

Improving your property and processes can take a small effort or investment and result in big rewards – tenants who stay, new tenants, and welcome community visibility. Turano suggests “having a community that has great curb appeal (professional landscaping, fresh paint, clean pool area, etc.), which makes the property feel warm. Other amenities, such as in-unit washer/dryers, as well as information about nearby access to shopping and parks, are highly desirable.”

Monteiro suggests incentives as a great way to retain tenants. “Sometimes leaving rent alone is incentive enough,” he says. Resident retention events, according to Summers, also do the trick. “These range from pool parties to barbeques to holiday functions. In our portfolio, we take this one step further and host a resident event once per week. This includes Taco Tuesdays, Breakfast on the Run, Neighborhood Watch, Pizza Night, and other events.” Summers also mentions that, while the events may appear unremarkable, leasing prospects are invited to the weekly events and encouraged to come back to tour the property or try out the swimming pool – a strategy that greets prospective renters with a sense of community and attractive amenities from the get-go.

Move-in specials, says Varrone, also attract residents. “So do lower deposits. Incentives to keep residents renting really help at renewal time,” she says, outlining Sunflower Management’s recent renewal special, which included gift certificates or cash. Wallace S. Gibson, founder of Gibson Management Group Ltd., Charlottesville, VA, says the key to attracting new renters is “a very good Craigslist ad posted daily on a rotation so that the property is presented online – even on the weekends. Move-in specials and a good, well-maintained website with floorplans are also a must.”

Having an up-to-date and positive Web presence is important for catching the eye of new renters. “Social media is the key to first-time renters,” says Gibson. “Maintaining a presence in that arena is important.” Monteiro advises using your website to make things easier for current tenants. “For example, instead of making your tenants pick up the phone, let them report repair items online. Instead of making them mail their rent checks each month, let them pay electronically,” he suggests.

 

5. Stay Professional

More Resources

Check out 12 Eviction Mistakes That Can Sink You, as well as other helpful articles, at the American Apartment Owners Association (AAOA) website.

The “Background Papers” under the California Apartment Association’s (CAA) Reference Library are full of helpful research.

The National Apartment Association gives you access to tons of industry information under its Industry Resources section.

Keeping your head in a go-go-go profession is one of your greatest challenges, especially when you’re facing evictions. “Property management is such a fast-paced occupation that it takes almost nothing to become overwhelmed,” says Varrone, who urges apartment managers to do everything they can to prevent evictions. “If it means making a payment plan with the resident to save the owner from the cost of the eviction, then do it. I try as hard as I can to use eviction as my last resort. If you can sympathize with the resident, even better – they want to work with you and pay you whatever they can if you can understand their situation.” Varrone states that starting the collection process early is key. “You can’t let them get more than a month behind. Otherwise, there’s really no chance of them getting caught up.”

Summers finds that the challenge in handling renters is “enforcing contracts in a consistent and universal fashion while empathizing with the unique financial conditions of individual residents.” Using too much latitude, he finds, “generates more delinquency and invites allegations of discrimination or favoritism. Consistency and universal application of policy deters late payment and prevents troubling allegations.”

Being prepared for trouble is wise. “Partner with a good law firm that’s knowledgeable in landlord, tenant, and eviction procedures,” says Gibson. “Have on-site personnel work with paralegals to serve notices and file court paperwork, and make sure lease wording allows for collection of legal and court costs so that, if the tenant pays, the charges of the law firm are paid before the court paperwork is filed.”

Monteiro says to make sure the law is on your side at all times. “Check your state and local laws before beginning any eviction. Remember that tenants have rights, too. Although you may be tempted, it’s never okay to move a tenant’s belongings out of his or her apartment without serving the eviction through proper channels, which requires a certain timeframe that will be dictated by state or local law,” he says.

Through the drawn-out eviction process, or even with simple squabbles, it’s important to retain your composure. “Stay cool and professional when dealing with an angry resident,” advises Turano. “I think you need to remember that each day and each incident is an adventure in wearing many hats. This job requires being fast on your feet. You do this by making the right business decisions and giving every resident the chance to create a nice home for him/herself by taking certain responsibilities for how his or her renting experience turns out.”

Jenna M. Aker (jenna.aker@buildings.com) is associate editor at Buildings magazine.

 


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Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
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Visit our website today to learn about the design flexibility of a Morton building and the endless possibilities of partnering with our designBUILD team.


Wood construction is both cost and energy efficient. Check out Morton Buildings and our designBUILD team online today to discover all the benefits of post-frame construction.


When choosing a metal-clad building for your next construction project, consider Morton Buildings, Inc., and their designBUILD team, we’ll make your dream a reality.

Bluebeam® Revu® simplifies digital facilities document management from design review to leveraging as-builts, maintenance manuals and O&Ms submittals.

We Can Help You Reduce Energy by 30%

Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
CLICK HERE to find out how.


 
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