Most property management lawsuits result from miscommunication, mistakes, or poor property care, not bad intentions. Identifying sources of liability is key to avoiding them, whether you own, rent, or manage. Owners are ultimately responsible for their property, while management companies perform the duties defined in their management agreement. Tenants also have obligations, including reporting problems promptly and keeping the unit clean and safe. To prevent disputes, use a clear management agreement that outlines each party's responsibilities and the insurance coverage required for both owner and manager.
Common Liability Areas and Risk-Management Tips
1. Premises Liability: Arises when someone is hurt on the property due to an unsafe condition.
- Owners and managers: Walk the property, document hazards and get them fixed quickly. Keep records of the property's condition.
- Tenants: Report hazards to your property manager in writing and keep a copy.
2. Negligent Maintenance: Arises when a known issue is not inspected or repaired in a timely manner.
- Owners and managers: Record every repair request, handle emergencies the same day, and document every step until the repair is complete.
- Tenants: Submit repair requests in writing, take photos of the issue, and provide access for repairs when given proper notice.
3. Fair Housing Discrimination: Arises when an applicant or tenant is treated differently in advertising, screening, or steering due to race, color, religion, sex, national origin, familial status, and disability which are protected characteristics under the Fair Housing Act.
- Owners and managers: Apply the same written screening criteria to every applicant and train all employees on fair housing laws.
- Tenants: Request any needed accommodations in writing. If you believe you have faced discrimination, you can file a complaint with HUD or the Nevada Equal Rights Commission.
4. Wrongful Eviction: Arises when a tenant is removed or forced out without proper notice or a court order. Lockouts, changing the locks, and shutting off utilities to force a tenant out are illegal in Nevada.
- Owners and managers: Never lock out tenants or interfere with utilities and always use current Nevada eviction notice forms.
- Tenants: Review notices carefully, note deadlines, and respond promptly to avoid missing response windows.
5. Security Deposit Disputes: Arise from unreasonable deductions, improper withholding, or late return.
- Owners and managers: Itemize deductions with costs and receipts and send the deposit or accounting within 30 days.
- Tenants: Document the condition of the unit at move-in and move-out and provide your forwarding address in writing.
6.Lease and Contract Disputes: Arise when lease terms are unclear or missing.
- Owners and managers: Use a Nevada-specific lease that clearly states all responsibilities and fees.
- Tenants: Read the lease before signing, ask questions, and keep a copy accessible.
7. Negligent Hiring and Supervision: Arises when an employee or contractor causes harm that proper screening, training, or supervision could have prevented.
- Owners and managers: Run background checks where legally permitted, verify each vendor's license and insurance, track who has property access, document training, and follow up on complaints.
- Tenants: Ask who will be entering your unit and why and report any concerning statements or behavior in writing.
8. Privacy and Entry Violations: Arise when a unit is entered without proper notice or a tenant's personal information is shared without a valid reason.
- Owners and managers: Give written notice at least 24 hours in advance, including the date, time window, and reason for entry. If an emergency requires entry, notify the tenant immediately afterward.
- Tenants: You generally can't unreasonably refuse entry when proper notice is given, but you may request a different time.
9. Disclosure and Misrepresentation: Arises when a tenant relies on an inaccurate statement or isn't told about a known fact.
- Owners and managers: Use only accurate, verifiable statements in advertisements, provide all required disclosures at lease signing, and keep records showing the tenant received them.
- Tenants: Ask about the property's history and condition and get any important promises in writing.
10. Fair Debt Collection: Arises when a tenant is harassed, threatened, or charged amounts not allowed by the lease or the law.
- Owners and managers: Provide accurate billing statements, document all communications, and use a licensed collection agency for former tenants' remaining balances.
- Tenants: Request an itemized statement of what you owe and dispute any amounts you believe are inaccurate.
Most property management disputes can be prevented with clear communication, prompt action, and good records. Owners protect their investment, tenants protect their homes and deposits, and managers protect everyone, including themselves, by knowing the rules and following them consistently.
Stay Connected with Sin City Real Estate & Management. Read every Thursday for a new edition of our Thursday Management Minute. A weekly insight into effective and up-to-date information on real estate and property management. Check us out on social media at @sincitymanagement
