Managing Director at Coastline Equityserving investors in the Southern California market with property management services.
In recent years, many industries have worked to create industry standards for service delivery. Most notably, the US Department of Transportation urged the commercial airline industry to pass the Airline Passenger Bill of Rights, called “Flight Rights.” These rights relate to ticket prices, baggage issues and delayed or canceled flights. It is unclear to most why there were no hard and fast rules that all commercial airlines previously followed.
The same applies to housing providers and commercial landlords. In my experience as CEO of a property management company, I believe the real estate industry has long needed a standard expectation of customer service that helps set a proper baseline standard for residents and commercial tenants.
Recently, Toronto-based Tricon Residential (NYSE: TCN, TSX: TCN), an owner and operator of single- and multi-family rental apartments in the United States and Canada, announced their own bill of rights for residents. However, Tricon’s proposal is the first of its kind for the real estate industry and may not be suitable for most commercial property managers, “mom and pop” operators or “fee managers”.
I commend the company for taking this first step to help push the industry towards a unified standard and I believe it’s time for the real estate industry to have a candid conversation about the quality of communications across the industry and the bar for fee managers.
For most companies, a turnaround time of three to five business days for communications is typical and within their company guidelines. I have seen many rental applications go unreviewed by property managers, and this level of service has encouraged municipalities and state governments to uniform application process that would deprive landlords of the right to screen their own potential tenants.
As an industry, if we don’t take steps to govern and self-regulate our industry and peers, those rights could be taken away from us because of the poor actors left unchecked. That’s why I think it’s important that we take Tricon’s recommendation for a bill of rights a step further and work towards establishing an industry-wide standard.
A tenant’s rights should include defined deadlines, service expectations, and effective communication to tenants. Across the industry, tenants need to understand what to expect from their landlords and professional property managers. On the other hand, as an industry, we must work to eliminate poor operators who negatively impact the industry.
1. Right to equal job opportunities
Tenants should be entitled to a prompt review of the application within 24 hours of submission, as well as an additional 24 hours to submit any missing documents. This is because in some situations rental applications are largely not reviewed.
2. Right to effective shelter/business management
Every renter should understand what to expect for repairs, temperature and timelines. Today there is too wide a range of service quality for repairs.
3. Right to respectful communication
A tenant should expect respectful communication from their landlord or property manager, as this is a basic tenet of fair treatment and good customer service. When landlords or property managers communicate respectfully with their tenants, it can create a positive and professional relationship and help build trust between the parties, preventing unnecessary conflict.
4. Right to Renewal
Allowing tenants to renew their leases can help ensure that their landlords treat them fairly. Without the right to renew, tenants risk being forced to move without “justifiable cause,” which can be disruptive and costly.
5. Right to Positive Credit Reporting
When a landlord regularly reports a tenant’s rent payments to the credit bureaus, it can help build a positive credit history for the tenant, which can be beneficial when they want to obtain other types of credit or financial products in the future.
6. Right to Erase Transfer Requirements
Clear relocation requirements can also help avoid disputes between landlords and tenants, especially when it comes to security deposits. When tenants understand and comply with their obligations when moving in, this can reduce the likelihood of disputes over deposit returns.
Implementation of a Tenant’s Bill of Rights
A company should start by reviewing existing company policies and updating them to the new standard of entitlements. The company will then have to continue to train its team and communicate with its tenants about their newly entrenched rights. Businesses must take ongoing steps to ensure that the provisions are enforced consistently.
Across the real estate industry, market leaders must work diplomatically with coalitions of landlords and property owners, vocational training organizations and tenant protection organizations to bring key stakeholders to the table. As a coalition, we need a unified approach to engage policymakers in the conversation. Industry leaders should work with policymakers at the local, state and federal levels to promote the adoption of a universal tenant statement.
I can imagine that there will be significant setbacks from large groups of landlords and tenants. Some stakeholders will want to move forward with the bill of rights and others will want to avoid it altogether. As an industry, we will have to overcome the lack of political will and stalemate that our political structure has faced in recent years.
To overcome these obstacles, industry leaders may need to work closely with policymakers, advocacy groups and other stakeholders to build support for the adoption of a universal lease.
It’s time for a rights statement that can create a clear set of rules and expectations for landlords and tenants to follow, which can help reduce misunderstandings and conflict. The lease can provide a clear legal framework for resolving disputes or issues that may arise between landlords and tenants, which can help resolve conflicts more effectively.
A lease can be a powerful tool to protect tenants’ rights and ensure they are treated fairly in the rental market.
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