07/20/2025
This article in the American Apartment Owners Association newsleter caught my eye. The decisions that we make on a daily basis as a landlord or a property manager will constantly test your business ethics. Sometimes doing the "right" thing is really the smartest thing to do from a business perspective.
Test your ethics and your business acumen by reading my case study and tell me how YOU would have handled it! The tenant (lets call him Mr. Good) was the model tenant in every respect. He kept a clean unit, caused zero trouble, always cooperative, always paid on time. Towards the end of his lease he advises property managers via email that he will not renew for another year because he was offered a job out of state which he has decided to accept.
At first, the Assisant Property Manager, Miss Smarter-Than-She-Looks, elects to accept his notice and sends him the Move Out Procedures. The next day the Property Manager, Mr. Blow Hard, gets wind of the Assistant Property Manager's response and admonishes her. He advises Mr. Good that he missed the 60-Day Notice deadline (by 10 days) to provide his written notice of non-renewal and therefore he is now automatically obligated for another year of rent.
Obviously, Mr. Blow Hard wants to play hardball and force Tenant Jones into being obligated to them for another year of rent by strictly enforcing the 60-day notice. He advises Mr. Good that he could buy out of the lease by paying them two months of rent. Does this sound like a good business decision to you? Have you ever heard of the saying "penny wise and pound foolish"?...or is it "tripping over dollars to pick up pennies"?...
This is a prime example of the reason why far too many property management companies have online review scores of 3.0 or less. Now Mr Good became frustrated and confused. He had been a model tenant and this is how he is treated when he provides them notice that he doesn't intend to renew for another year?
If this were YOUR business would you rather have the two months of extra rent and a 1 star angry review? Or would you rather have the 5 star review? Did the Landlord really suffer financially by getting Mr. Good's notice of non-renewal 10-days late? What was Mr. Blow Hard hoping to accomplsih other than squeeze another two months of rent out of Mr. Good?
Mr. Good decides to hire a Landlord-Tenant Attorney to represent him rather than pay for another year of rent. Mr. Good's attorney advises Mr. Blow Hard that they are collaterally estopped from enforcing the 60-day deadline due to the actions of Ms. Smarter-Than-She-Looks who initially accepted the notice of non-renewal. Moreover, Mr. Good's attorney advises Mr. Blow Hard that his actions of attempting to retract the Assistant Managers acceptance of the notice of non-renewal constituted a violation of the Unfair Trade Practices Act which entitles Mr. Good to treble damages and attorneys fees.
Mr. Blow Hard completely ignores the attorney's letter and Mr. Good moves out providing the landlord with written notice of his forwarding address. 32 days later Mr. Good receives the landlord's written accounting of his security deposit. The landlord is required by PA law (not by lease terms) to provide the written accounting of the security deposit in 30 days. The landlord mailed it 2 days late.
If fact, the law states that if it is not mailed within 30 days then the landlord not only waives their right to deduct ANYTHING from the security deposit... but the tenant is also entitled to TWICE the amount of the security deposit! Now Mr. Blow Hard is forced to hire a lawyer as well. Karma's a bitch.
Utlimately, the attorneys reached a settlement agreement. The security deposit was to be returned to Mr. Good. In exchange, Mr. Good waived his right to sue for twice the security deposit. End result? Mr. Blow Hard cost his company a few thousand in legal fees simply because his business moral compass was off course.
Bottom line -- every poor business decision you make will cost you or your company time, money and/or damage to the company reputation online. If you would like to learn more about how to maximize profit, minimize costly mistakes and steer clear of legal pitfalls, please join us for next free workshop. Just write to us at professor@landlordcollege.org. Check us out at www.LandlordCollege.org
https://american-apartment-owners-association.org/property-management/ethics-in-property-management-the-decisions-no-one-sees/?utm_medium=email&utm_source=rasa_io&utm_campaign=newsletter
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