Sometimes it seems as if all property managers spend a majority of their time memorizing various rules and regulations. New employees in particular are always trying to learn basic rules such as “when do we return security deposits, or what account does this deposit go into?” But one of the most important set of rules that property managers must be aware of, and have some working knowledge of are federal laws. While memorization is not needed, property managers MUST be aware of the general regulations that these Acts encompass, and must know when further research is necessary in order to clarify any issues that may come up. I’ve summarized a list of federal laws that property managers should be aware of as well as the possible repercussions if violated.
The Fair Housing Act – While the majority of property managers are well acquainted with the Fair Housing Act, here’s a brief recap. The Fair Housing Act prohibits discrimination in the sale, rental, or financing of housing based on race, color, religion, national origin, sex, familial status, or handicap. Penalties for violating the Fair Housing Act are stiff, and include revocation of any license held, and possible federal prison. Make sure you and your staff treat all applicants equally and this should never become an issue.
The Sherman Antitrust Act – This act is designed to promote competition in the open marketplace. While property managers do need to know competitor’s pricing, managers must avoid the appearance of conspiring to fix prices in order to thwart the competition. Only the courts can determine if price fixing has occurred, and a conviction can result in both civil and criminal penalties including time in a federal penitentiary. That simple verbal agreement between property management companies agreeing to maintain similar rents will send a red flag. Remember, all that is necessary is that it looks like price fixing, and you may find yourself in federal court. Avoid even the appearance of price fixing at all costs.
Americans With Disabilities Act (ADA) – The rules of the ADA are complex and multi-tiered. Briefly, the ADA states that no person may be discriminated against on the basis of disability. The ADA mainly affects commercial property managers, but the Act also covers property management offices, which must be made available to all handicapped individuals. Take some time to familiarize yourself with the basics and be sure to keep your office in compliance.
More in Part II.