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Owner/occupant

Communication is key in the landlord-tenant relationship

By Eileen Wirth, CPM, MBA, HCCP, SHCM, NAHPe
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Measure twice, cut once. This may be familiar advice for working on a construction or home improvement project, but what does this statement have to do with landlord-resident relationships? It is the simple message of this axiom that should be taken to heart: careful preparation can avoid extra work later.

What careful preparation can property managers undertake to establish great relationships with tenants? The answer, too, is simple: time spent with each new resident at move-in. This time together establishes the tone of the landlord-tenant relationship, a rapport in which strong and open communication is critical to long-term success.

Are you projecting a feeling that welcomes your resident into their new home? Are you taking steps to ensure they feel included in the building community, or will they feel like a nuisance because you are perpetually focused on the next task that requires your attention?

It’s the simple message of this axiom that should be taken to heart: Careful preparation can avoid extra work later.
Later communication will be negatively impacted if a resident believes that they are bothering management by asking questions or taking up too much time at move-in. But residents reaching out to management with issues goes a long way in successfully managing properties, so this state of hesitancy to communicate should be prevented. Property managers that have had to deal with damage in a unit due to a resident not reporting an issue, such as a small leak, understand this all too well.

Welcome to the neighborhood

Just as imperative as educating residents on the importance of reporting maintenance issues is communicating with them the expectations for living in your community.

A thorough review of the full lease is another example of a property manager engaging in “measure twice, cut once.” Does your property have a common lease violation? When reviewing house rules, are there guidelines or provisions that are unique to your property? Highlighting these and having the provisions initialed by the resident can save time and avoid confusion and the need to send lease violation notices later. Another consideration is an already-scheduled property inspection within a few months of a move-in. Inform your new resident that something is on the calendar, and explain what access may be needed.

First-time renters benefit from an in-depth review of lease provisions and house rules. However, “first-time” does not necessarily mean young; there are undoubtedly older individuals who are also new to multi-unit living. Many active adult communities have residents that transitioned from private home ownership. Facing policies or rules for the use of community space and amenities for the first time can, therefore, lead to pushback. For example, these residents might not want to hear that a loud party by the pool is unacceptable.

Affordable housing

“First-time” does not necessarily mean young; there are undoubtedly older individuals who are also new to multi-unit living.
Certain sectors of housing have always required a more expansive document review at move-in. This is particularly relevant for affordable or subsidized housing, where multiple lease addendums must be executed, such as those required by the U.S. Department of Housing and Urban Development (HUD), Rural Housing Services, investors, or the allocating agency for any properties receiving low-income housing tax credits (LIHTC). Lease renewals also involve execution of many of the same documents that were completed at move-in.

Taking time to explain all of the program-reporting requirements helps residents new to living in these types of properties avoid being surprised by requirements to provide proof of income or the overwhelming number of forms and addendums that must be completed to ensure program compliance. The penalties for noncompliance can be too severe to risk taking shortcuts. For LIHTC properties, these penalties for noncompliance can be millions of dollars, so both landlords and tenants can avoid a lose-lose scenario by taking the time for a thorough documentation process.

Working together

There is another principle common to property management: It is less expensive to keep a resident than to find a new one. Some estimates put the cost of finding a new resident at six times the cost of keeping a current renter in place. The landlord-tenant relationship can be a major factor in a resident deciding to remain in a community for the long run.

When residents are facing challenges such as job loss, medical issues, or other unexpected expenses, open communication with property management ensures that these challenges will not be kept a secret. Residents reaching out to management immediately when facing these challenges means that an action plan can be developed together and—crucially—before the situation becomes critical.

Right now, it seems that there are daily news reports of resident payment issues, eviction moratoriums, and the potential crisis anticipated when current health emergency orders are ultimately lifted. Having a resident come to the office looking only for a deferment of rent does not help anyone, but neither does management being inflexible. Entering into a realistic payment arrangement is easier when a resident, facing circumstances that might feel impossible to overcome, is met with a level of understanding from management—the culmination of the cultivated relationship, established firmly all the way back on Day One. The first question posed by management when approached by a resident experiencing a financial challenge should be, “How much can you pay now?” Securing this immediate buy-in from the resident is critical, even if only a minimum payment is made. Setting biweekly payment dates that align with when unemployment benefits are received, focusing on rent payments, and deferring late fees to be paid once new employment is obtained are not at all unreasonable.

A chance to reiterate

A review of critical lease terms or changes to house rules at renewal creates another touch point for communication. Scheduling an appointment for renewals can make a resident feel valued. This time together provides an opportunity to obtain details on potentially unreported maintenance issues as well as gain open-ended feedback. Comment cards or “How did you hear about us?” feedback are both commonly collected when leasing, but are questions such as “Why did you decide to remain?” or “What do you like best about your current home?” asked at the lease renewal stage? These answers provide insights into the state of resident relations, help management recognize which amenities or features to highlight in marketing, and can even be used as testimonials.

It should be noted that the principle of “measure twice, cut once” is not limited to residential property management. Even if someone is already familiar with residential leases, becoming a tenant in commercial space opens up a whole new world of lease terms, including leasehold improvements, triple net, and common area maintenance, just to name a few. A new business owner leasing space for the first time can certainly benefit from a landlord or broker taking the time to carefully review the lease and explain any unfamiliar terms.

For owners and managers reflecting on the time that they invest into their tenant relationships, the operating principle of “measure twice, cut once” simply cannot be underestimated.

the Journal of Property Management staff

Eileen Wirth, CPM, MBA, HCCP, SHCM, NAHPe, is the president and CEO of the Octavia Hill Association, Inc. She has served as a New Jersey Chapter officer and currently serves on the IREM Federal Housing Advisory Board and IREM Foundation Board of Directors.

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