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The Laurex Process: Investment Management
Keeping a Lid on Landlord Troubles
By Shannyn Flory

Just as with any business, there are a few essential prerequisites to starting and running a legitimate property management company. One of your most important tasks is to establish a relationship with a competent real estate attorney - your first step toward minimizing your exposure for liability in an inherently risk laden business. The time and money you spend in this effort will be worth its weight in gold! After all, your lawyer will be the one to safeguard you from potential lawsuits, defend you if/when you are sued and assist you with the inevitable unlawful detainer (eviction) process.

 
Finding the Right Attorney

Choosing the right professional to represent you can be significant so take your time and be selective. The number of attorneys out there to choose from can be a bit overwhelming but there are a few tips that will help narrow the field:

 
  • Consider where you would like them to be located. If you are an absentee owner (live more than an hour or so driving distance away from your property), you will want to find someone in the general proximity of your rental property so they are familiar with local laws and can better handle the serving of notices if necessary.

     
  • Try and get a referral from someone you know in the rental real estate business. Search the web for landlord or real estate associations in your area and contact them. Members of these organizations are great sources of recommendations and some even have attorney members or sponsors.

     
  • Be sure to "interview" any prospects over the phone or in a free introductory consultation. Ask them questions about the eviction process, their fees and inquire about the most common landlord-tenant disputes and classic mistakes. These types of questions will help you gauge their level of experience and professionalism. Once you decide who you are comfortable with, be sure to clarify that you intend to retain their services as needed. Establishing an official "attorney-client" relationship is not only courteous, but it will give you a sense of empowerment knowing you have found a strong ally to help you fight your battles!
Setting Policies and Procedures

Creating and setting good policies and procedures will be an essential part of your job as a landlord. This entails making sure that you always reflect and respect federal, state and local laws. Your attorney can help you establish your policies and procedures or at the very least, review what you devise on your own and suggest any changes or additions. Clear policies and procedures will be the key to protecting yourself from many potential problems with tenants. They will also give you the confidence and security of having understood and established your rights and obligations in this regard.

 
Leases and Forms

Likewise, your rental agreement and supporting forms must adhere to the law. Remember, in most cases, judges are much less lenient with landlords than tenants when it comes to knowing and following due process of the law. As a landlord, you are expected to know your business!

One of the classic landlord mistakes is using generic store bought leases and forms that lack the detail and verbiage that is meant to protect you. An attorney will be a vital resource in verifying the effectiveness of your lease and supporting forms, all of which will ultimately define your landlord-tenant relationships. He/she will also be able to clarify the minimum requirements and legal requirements on issues such as giving notice to terminate a lease, evicting a tenant, increasing the rent, etc. Many times, they will even supply you with the appropriate forms to use.

 
Evictions and Legal Disputes

The most common reasons for retaining an attorney are to handle evictions and other legal disputes with disgruntled tenants or resident applicants. It goes without saying however, that the likelihood of facing these situations diminishes significantly for those landlords who have been diligent in establishing the previously discussed steps.

In the event that you do need legal assistance, your attorney will be your most valuable asset. In the face of a law suit, you will be able to relax in the knowing that you are being represented by a competent professional. Another benefit is that eventually, once you have established an understanding of the more basic procedures (such as the dos and don'ts of evictions), a good lawyer will prepare you to eventually handle them on your own if you choose to do so.

 
Conclusion

In summary, consider it one of your priorities as a landlord to reap the benefits of all that a good real estate attorney can offer before you get into a legal mess ­ not the other way around! So many landlords are intimidated by legal costs and the forced sense of reality an attorney may present them with. The truth is, a lawyer is as much a part of a good rental investment as a good real estate agent, accountant, maintenance person, or tenant. Don't find out the hard way the true value of a real estate attorney!

Shannyn's experience includes purchasing and managing her own rentals and launching three property management businesses of her own. A skillful user of QuickBooks® accounting software for the business of property management, Shannyn also worked closely with a property management and investment realty firm in Boise as an independent financial accounting consultant for more than two years. Other work history includes one year in the title and escrow business, two years as a mortgage loan originator and one year as a licensed real estate agent. Currently she works part-time with her husband Mark who has been appraising residential real estate for over 10 years.

Article Provided by:

Shannyn Flory
Real Estate Investor