Rules and Regulations for Property Management Companies
Property management companies and all other types of businesses must follow the rules and regulations that govern their operations. These rules and regulations help protect both the business and its customers and clients. The following is a list of some of these standards:
- A property management or real estate company cannot charge more than 10% of the first months’ rent, plus a background check fee of not more than 45 dollars (Brais, 2018, p.12).
- Property management companies can charge an owner transfer fee for time spent on communication with the owner. This fee should be clearly stated in the property management contract. If no amount is listed, it cannot exceed 25% of one month’s rent (Harris & Nikbakht, 2021).
- Property management companies must give tenants at least 20 days’ notice for late payment but are allowed to charge a fee if it falls on the tenant’s check-out date. If there is no stated date in the lease, this fee cannot be charged 30 days after the due date. A late payment fee may not exceed 4% of the rent amount (Brais, 2018, p.26).
- Property management companies must give a tenant at least 30 days’ notice for an owner to terminate their lease and provide a list of all available comparable units. If the company cannot find a comparable unit, they must continue to search until they do find one.
- A property management company cannot refuse to renew a lease for no good reason, including non-payment of rent. If the tenant cannot pay their rent due to extenuating circumstances, they must be given at least 30 days’ notice before the renewal date that the landlord will not waive the late payment fee (Harris & Nikbakht, 2021).
- A property management company cannot refuse to renew a lease for no good reason, including non-payment of rent. If the tenant cannot pay their rent due to extenuating circumstances, they must be given at least 30 days’ notice before the renewal date that the landlord will not waive the late payment fee.
- According to Harris and Nikbakht (2021), a property management company cannot refuse to show a unit to prospective renters due to any reason. If the tenant requests that their unit be shown during the last 30 days of occupancy, the owner must allow it after giving proper notice or provide an equally nice unit for viewings.
- Property managers are required by law to provide a hazard disclosure form to all new tenants. This form will list any potential dangers or issues with the property that could threaten the tenant’s safety, such as loose floorboards, faulty wiring, and cracked foundations.
- Property management companies are allowed to charge for utilities if their customers have an individual meter that measures usage of the unit’s utilities. This charge is determined by the local utility company and is usually a two-monthly fee.
- Property management companies can screen tenants based on their credit history, income, employment record, rental history, and character references from previous landlords (Brais, 2018). If they have a bad screening score, they will be required to provide a guarantor form.
Businesses must adhere to many other rules and regulations, but the ones listed above are some of the most important for property management companies. By knowing and following these guidelines, companies can avoid any legal trouble and ensure that they provide a high-quality service to their clients.
Brais, H. (2018). Policy and the corporate landlord: The geography of private rental housing in Canada [Doctoral dissertation]. Concordia University.
Harris, J., & Nikbakht, E. (2021). Blockchain Applications in Real Estate. In J. Harris & E. Nikbakht (Eds.), The Emerald Handbook of Blockchain for Business (pp. 311-323). Emerald Publishing Limited. Web.