Current and Emerging Legal Issues Impacting Real Estate Managers Identified in Two-Part Survey

Aug. 7, 2007
Hot issues right now for property managers include premises liability, debt collection, and frivolous suits
The findings of a two-part survey of current and emerging legal liability issues impacting real estate managers have been released jointly by the two Chicago-based organizations: The Institute of Real Estate Management (IREM®) and the National Association of Realtors® (NAR), the survey's co-sponsors. Relevant case law and statutory research was analyzed for one part of the survey; IREM members in national, regional, and local leadership positions with the organization provided input for the second part. While the survey sample of IREM leaders was too small to be statistically significant, it does identify areas of current concern that may warrant further study.

Explaining the rationale for the survey, IREM President Robert Toothaker, CPM, states: "A while back, IREM members identified ‘risk management' as one of the four strategic issues affecting today's real estate management industry (the other three issues cited were technology, workforce development, and business competition). We undertook the survey in partnership with NAR to help our members and industry colleagues better address risk management challenges in their business practices, thereby enhancing their performance on behalf of the owners and investors and other constituents they serve."

Hot Issues Now: Premises Liability, Debt Collection, Frivolous Suits
The most significant current legal problems identified by the 80 IREM leaders surveyed are those relating to the day-to-day business of managing properties. Premises liability issues - from slip-and-fall accidents to crimes on the property - all were deemed significant. In fact, a majority of respondents (57 percent) ranked slips and falls as the single leading cause of current disputes, with more than six in 10 (63 percent) ranking such accidents among the top three management issues they and their colleagues face.

Debt collection also triggers many disputes right now, according to the respondents, with 48 percent of them ranking it the No. 1 cause of disputes and 53 percent including it among the top three management issues. Yet another significant problem area today is frivolous litigation, perceived as the single leading cause of disputes by 48 percent of respondents and among the top three management issues by 63 percent. Viewed as less significant, but still sources of concern to the respondents, are issues involving fair housing and age discrimination.

Hot Issues on the Horizon: Discrimination in Employment and Housing
When asked to predict which problems would become more significant over the short term - the next 2 years - survey respondents again cited premises liability issues, debt collection, and frivolous lawsuits. Two employment issues - age discrimination and wrongful termination - also are seen to be increasing in importance.

By comparison, when the respondents were asked to extend their predictions over a longer timeline, employment discrimination based on race, national origin, and sexual orientation discrimination all were highly ranked, with several including fair-housing issues in the mix.

Training Needs Identified
Survey respondents also weighed in on where additional training may be needed to better deal with key legal issues and concerns. Their responses closely track the key issues identified in other parts of the survey, with training needs in the areas of debt collection, premises liability, and frivolous lawsuits ranked high by the respondents, along with several mentioning fair housing and employment issues.

Topline Legal Research Findings
Of 847 cases and jury verdict reports analyzed, those addressing premises liability issues constituted nearly 60 percent of the total. Most of the cases involved slip-and-fall accidents or other injuries caused by conditions of a tenant's property or common areas. Other issues frequently addressed include commission disputes, fair housing, and deceptive trade practices. Of 139 statutory and regulatory research documents analyzed, most also involved premises liability. For example, laws governing the condition of residential tenants' premises have increased greatly in the last 2 years, with 39 separate statutes or regulations identified. Fair housing issues also received significant legislative and regulatory attention. When real estate management issues are litigated, most cases end favorably for the defendants, usually without going to trial.

This information was provided by the National Association of Realtors (NAR), a trade association representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries, and the Institute of Real Estate Management (IREM). An affiliate of the NAR, IREM is the only professional real estate management association serving both the multi-family and commercial real estate sectors. IREM is an international organization that serves as an advocate on issues affecting the real estate management industry. To learn more about IREM, call (800) 837-0706, ext. 4650 (outside the United States, call [312] 329-6000) or visit the association's website.

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