Owner/Client Relations - Essentials

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1 Owner/Client Relations - Essentials Student Materials Key Phone: Fax: Copyright 2014 NARPM (rev. 10/14) 1

2 Disclaimer Our discussion regarding residential property management includes personal views and opinions of the authors and instructors based on experience, research, and conversations with other property managers. We cannot represent the law or specific situations where you live or work, nor make assurances or warrant that what we say will apply to your situation or area. As you know, when we talk about prices, fees, or commissions, we can be accused of price-fixing. We want to make it clear that we are not suggesting fees or commissions to be set or agreed upon. Any mention of fees or commissions is only to clarify our discussion by giving examples. Fees are determined by competition and the marketplace. Each market is different and, therefore, fees differ from company to company. Information used in the case of studies of problems and solutions is fictional. Any similarity to actual events or people is coincidental. This course does not purport to provide an exhaustive discussion of any area of the law and should not be used as a substitute for legal counsel. Legal issues discussed are solely for illustrative purposes and neither NARPM nor the author is responsible for the legal content. Forms, contracts and agreements, as well as all other printed materials are provided as examples for guidance only and are not to be used without specific approval by your own legal counsel. Since laws change periodically and vary from state to state, neither NARPM nor the author assumes any responsibility for content of any printed material herein. CONSULT YOUR LEGAL ADVISOR BEFORE IMPLEMENTING ANY POLICIES OR PROCEDURES OR USING ANY PRINTED MATERIALS. It is the policy of the NARPM to comply fully with all antitrust laws. The antitrust laws prohibit, among other things, any joint conduct among competitors that could lessen competition in the marketplace. NARPM s membership is composed of competitors; they must refrain from discussing competitively sensitive topics, including those related to pricing (such as rates, fees, or costs), individual competitors or specific business transactions, or controlling or allocating markets. Further, NARPM shall not restrict members ability to solicit competitors clients or to advertise for business in any way that is not false, deceptive or otherwise illegal. All cell phones, tablets, and laptops should be turned to silent. Recording of this class is strictly prohibited. Copyright 2014 NARPM (rev. 10/14) 2

3 Course Schedule Hours 9:00 am 4:00 pm Breaks - 10 minutes/hour Lunch 12:00 1:00 pm Exam 3:30-4:00 pm All students must achieve a minimum of 70% on the NARPM Exams. In order to receive a certificate of completion, students must complete the online survey that will be sent via after this course is complete. NARPM Courses 1. Basic Courses a. NARPM 101: Basics of Property Management b. Marketing c. Tenancy 2. Broker/Owner a. HR: Start to Finish b. Personnel Procedures Advanced c. Office Operations d. Risk Management Advanced e. Owner/Client Relations Advanced 3. Maintenance a. Habitability Standards & Maintenance b. Maintenance: Basics and Beyond c. Operating an In-House Maintenance Company 4. Property Managers a. Owner/Client Relations Essentials b. Personnel Procedures Essentials c. Risk Management Essentials Several NARPM classes are now available online. Continue to watch as courses are added and new ones are developed. 2-HOUR COURSES Paperless Office online only Lead-based Paint Law online only 3-HOUR COURSES Fair Housing online only SOCIAL MEDIA WEBINARS 1-HOUR COURSES Online Marketing Facebook Marketing Online Promotion Web Sites and Blogging The Paperless Transaction Copyright 2014 NARPM (rev. 10/14) 3

4 Objective The objective of this course is to cover the four stages of every owner relationship the owner as a prospective client, securing the client and the property, servicing the client, and closing out the client relationship. The class will also provide you with the necessary information to develop policies that will help create a positive experience for each of your clients and protect their investment. The Owner Cycle 1. Initial Contact 2. New Client 3. Servicing Client 4. Closing Initial Contact, Website materials and telephone. It is critical for a good first. impression Initial Contact Checklist 1. Name/telephone/ address 2. Property address and details 3. How did they hear about you? 4. Why are they looking? 5. What type of management do they need? 6. Take notes about personal information. Copyright 2014 NARPM (rev. 10/14) 4

5 7. Ask probing questions about their motives. 8. Ask questions they can t answer. Initial Contact: Qualifying Owner must fit your model property must fit your model Initial Contact: Services Offered 1. Rehabbing and renovations 2. Home inspections 3. Virtual tours 4. Collection services 5. Small loan company 6. Mortgage protection 7. Eviction protection Initial Contact: Presentation Create an outline that includes: 1. Tenant placement 2. Marketing program 3. Application process 4. Move-in procedures Copyright 2014 NARPM (rev. 10/14) 5

6 Ongoing management: 1. Manage the money 2. Manage the Tenant 3. Manage the property 4. Manage the Move-out Initial Contact: Fees and Follow-up Build value by describing services. Establish the worth of your fees. 1. Infrastructure 2. Certifications 3. Available staff 4. Experience Copyright 2014 NARPM (rev. 10/14) 6

7 Initial Contact: Handling Objections 1. Answer when they ask. 2. Answer later. 3. Admit you don t know. 4. Defer 5. Ignore 6. Answer before they ask. Initial Contact: Fees and Follow-up 1. Stay in touch 2. Offer additional services 3. Ask them why they chose another property manager. The Management Package The management agreement lays out in legal terms how your relationship is supposed to play out. Make it clear who you. represent (agency) Copyright 2014 NARPM (rev. 10/14) 7

8 Lay out the owner s. responsibilities Lays out in legal terms management s responsibilities. New Clients The Management Package The Question is who really owns the property you re renting. Confirm title-holder. Get proper signatures Owner Documentation 1. Home Owners Association 2. Home warranty policy 3. Mortgage condition affidavit 4. - Lead based paint disclosure Copyright 2014 NARPM (rev. 10/14) 8

9 5. Insurance declaration page 6. Mold disclosure 7. Flood disclosure 8. Personal property disclosure Property Documentation 1. Appliance manual 2. /date Feature page 3. Available amenities 4. Access through key and codes 5. Utility Company Contact Information 6. Photos, virtual tours and flyers 7. Plot map/ survey 8. Legal descriptions 9. Old appraisals Describing the procedures Assessment and preparation of residence Copyright 2014 NARPM (rev. 10/14) 9

10 1. Habitability 2. Utilities On 3. Hazards 4. Cleanliness 5. Re-keying 6. Updating 7. Curb appeal Advertising the Property 1. When do you start? 2. Occupied or? vacant 3. Who pays for what? 4. Signage 5. Co-ops/ Referral fees Copyright 2014 NARPM (rev. 10/14) 10

11 Tenant Selection 1. Application procedures 2. Holding deposits 3. Tenant selection 4. Qualifying guidelines 5. First applicant vs. Best qualified 6. Choosing the tenant 7. When/how the owner is notified Bill-Paying Policy 1. Mortgage and Insurance 2. Recurring charge 3. Maintenance notification and disbursement. 4. Invoice management Owners Statement 1. Review a sample statement 2. Delivery method 3. Reserve amount Copyright 2014 NARPM (rev. 10/14) 11

12 4. Security deposits 5. Negative account balances Communication Frequency 1. While on the market 2. Financials 3. Newsletters 4. Emergencies 5. Unpaid Rent/NSF/Eviction 6. Maintenance 7. Vacancy notices Communication Method Depends on the Urgency Phone very urgent not so urgent Letter very important Fax when they have one Copyright 2014 NARPM (rev. 10/14) 12

13 Your method of communication depends on your need to document the communication. Recordkeeping 1. Software 2. Online Portals 3. Statement cycle 4. Maintenance history 5. Insurance 6. Letters/ Photos 7. Legal documents 8. Agreements - a verbal okay is NOT good enough. 9. Reviews 10. Requests Copyright 2014 NARPM (rev. 10/14) 13

14 Use of Documentation 1. Disputes 2. Legal 3. Insurance 4. History of property 5. Uncover problems 6. Identify call-backs Year-End Reporting 1. Profit and Loss statement 2. Vacancy rate 3. Rent increase/decrease 4. Major Events a. Insurance claims b. Turn overs 5. Outstanding/deferred maintenance Servicing your clients Maintenance 1. Clarify responsibility a. Tenant caused Copyright 2014 NARPM (rev. 10/14) 14

15 b. Vendor call back c. /owner Client 2. Capital improvements a. Life expectancy 3. Wear and tear vs. damage Identifying Maintenance Problems 1. Cause 2. Trouble - shooting 3. Details Contact the Owner 1. Provide Alternatives 2. Don t Blindside Copyright 2014 NARPM (rev. 10/14) 15

16 Relationships Client s needs and wants change 1. Economy and technology 2. Life events 3. Change in terms Building Business Relationships 1. Life event 2. Annual thank you notes 3. Planned visits 4. Market updates 5. Referrals Conflict Resolutions Active Listing 1. Take notes 2. Don t interrupt 3. Stay calm 4. Lower your voice Copyright 2014 NARPM (rev. 10/14) 16

17 Documentation and Follow-up Simple - write a letter Complex 1. List task 2. Assign responsible person 3. Create a time line Follow-up to ensure resolution Determining the Desired Results 1. Common understanding 2. Administrative request 3. Change of policy or procedure 4. Replacement If it is a complex conflict issue, set a follow-up meeting. Determining Alternatives 1. Brainstorm 2. Recite past experiences 3. Contact NARPM members Copyright 2014 NARPM (rev. 10/14) 17

18 4. Research and gather data 5. Use the T diagram Firing the Owner Approval by broker and adressed by procedures. Transfer to another property manager Security deposit notice to tenants and Transfer to new property manager. Owner taking back management Notice to tenants and transfer responsibility to owner. Owner moving back 1. Complete walk out first 2. Time line reminder Copyright 2014 NARPM (rev. 10/14) 18

19 3. Prepare for wear and tear Owner Sells Property Follow the proper procedures based on the situation Foreclosure Management Agreement ends with the owner because there is no longer the owner. Closing/Transfer Package Transfer package 1. A copy of the lease 2. A copy of the inventory and condition form 3. Tenant information (it is best not to transfer anything with the tenant s Social Security Number visible) 4. Tenant accounting ledger 5. Security deposit 6. Keys 7. Owner funds held if turning the property back to the owner Referral Copyright 2014 NARPM (rev. 10/14) 19

20 Ask for a Leave the door open Ending well 1. Provide final profit and loss. 2. Provide 1099 at year-end 3. Property documentation returned 4. A thank you note for years of being a client Notes: Copyright 2014 NARPM (rev. 10/14) 20

21 Resources Copyright 2014 NARPM (rev. 10/14) 21

22 NARPM NAR IREM Insurance companies State/local trade associaitons Attorney State licensing board Copyright 2014 NARPM (rev. 10/14) 22

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