NOTE: Application of best practices is subject to lease terms defining responsibilities of landlord and tenant/resident, as well as applicable laws and regulations.
Management Company Best Practices.1.1. Company formation. The management company shall be established in compliance with all applicable laws and regulations.
1.2. Legal compliance. The management company and its employees shall conduct business activities with knowledge of and in compliance with all applicable laws and regulations.
1.3. Management company insurance. The management company shall maintain insurance coverage that protects the management company, its employees when acting in an official capacity for the company, and the assets under its fiduciary care.
1.4. Company emergency preparedness. Emergency preparedness and emergency response plans and procedures for the management company shall be developed and, when necessary, followed.
1.5. Company policies and procedures. Written policies and procedures shall be developed and enforced for all company operations, communicated to and readily accessible by all employees, and regularly reviewed and updated as needed.
1.6. Data security. The management company shall secure all data associated with the company and its operations.
1.7. Recordkeeping. The management company shall maintain company, property, and client records in accordance with all applicable regulatory guidelines, contractual obligations, and company policy, and in a manner that provides for proper and secure records storage, efficient records retrieval, and appropriate destruction of obsolete records.
1.8. Staff development. The management company shall endeavor to develop a diverse team and provide for the professional development, training, and credentialing of employees in accordance with their roles and responsibilities.
1.9. Job descriptions. The management company shall have written job descriptions that accurately represent the duties and responsibilities of each person within the company.
1.10. Company ethics. The management company shall have and enforce a written company code of ethics that defines ethical relationships between the employees of the company and its clients, residents, tenants, vendors, the public, and other employees.
1.11. Accounting system. The management company shall establish, maintain, and update as needed an accounting system that supports company operations, is consistent with client directives, and complies with accepted accounting and financial reporting principles.
1.12. Company budget. The management company shall prepare, and monitor ongoing conformance with, an annual budget for the company.
1.13. Financial controls. The management company shall establish and adhere to internal financial controls for the handling of all company funds and client funds.
1.14. Commingling funds. The management company shall not commingle the funds of multiple clients or client funds with company funds. Funds in trust or escrow accounts for multiple clients shall be clearly designated and accounted for as they apply to each client.
1.15. Strategic plan. The company shall develop, maintain, periodically update, and regularly communicate to its employees a strategic plan for the company.
1.16. Systems efficiency. The management company shall routinely assess the efficiency of its ongoing processes and practices to consider areas that can be improved.
1.17. News media response plan. The management company shall determine how the company and its employees will represent themselves with the news media.
1.18. Industry involvement and support. The management company shall participate in and support industry organizations.
1.19. Social media. The management company shall have a written policy that outlines how the company and its employees will represent themselves in social media.
1.20. Electronic communications. The management company shall have a written policy that outlines how the company and its employees will utilize electronic communications, such as email, instant messaging, and texting.
Client Relations Best Practices2.1. Client objectives. The management company shall identify and confirm in writing the client’s objectives for owning the property.
2.2. Management agreement. A written management agreement shall be in place that establishes the business relationship between the management company and the client and defines and explains the tasks, functions, actions, responsibilities, and obligations of each party and the authority of the management company.
2.3. Scope of authority. The management company shall not act beyond what is specified in the management agreement without documented client approval.
2.4. Customer service. The management company shall have customer service goals for serving its clients.
2.5. Operating reports. Accurate and complete financial and operating reports shall be provided to the client on a regular, timely basis in accordance with the client’s instructions with respect to content, format, and frequency.
2.6. Property audit. The management company shall recommend that the client perform an annual review or financial audit of property operations and shall fully cooperate in the conduct of such a financial review or audit if performed by the client.
2.7. Client property insurance. The management company shall provide assistance and support to the client by referring the property owner to a qualified, licensed, and insured insurance agent, when requested by the client.
2.8. Client property taxes. The management company shall provide assistance and support to the client in complying with all property tax obligations and appealing tax levels and assessments when requested by the client.
2.9. Loyalty to client. The management company shall exercise loyalty to the interests of the client and shall not engage in any activity which could reasonably be construed as contrary to the best interests of the client without full disclosure.
2.10. Disclosure. The management company, as a fiduciary for the client, shall not accept, directly or indirectly, any rebate, fee, commission, discount, or other benefit, monetary or otherwise, that has not been fully disclosed to the client.
2.11. Client obligations. The management company shall provide non-financial assistance and support to the client in complying with the client’s incumbent obligations and responsibilities to other parties when so requested by the client, provided such assistance is within the scope of expertise of the management company.
Management of the Property Best Practices3.1. Management plan. The management company shall prepare a management plan for managed properties in accordance with client directives.
3.2. Property budget. The management company shall prepare an annual operating budget for the property, submit it to the client in a timely manner in accordance with the client’s instructions with respect to content and format, and obtain appropriate approvals as applicable.
3.3. Property policies and procedures. The management company shall establish, enforce, regularly review, and update as needed written policies and procedures relative to the operation of each managed property, making such policies and procedures readily accessible to all company and property staff.
3.4. Routine, custodial, and corrective maintenance. The management company shall assess, develop, and implement a plan for the routine, custodial, and corrective maintenance of the property consistent with client directives.
3.5. Preventive maintenance. The management company shall assess, develop, and implement a plan for the preventive maintenance of the property consistent with client directives.
3.6. Capital improvements. The management company shall recommend and assist in implementing capital improvements consistent with client directives.
3.7. Receipt of funds. The management company shall receive, record, deposit, and account for incoming funds accurately and in a timely manner and in accordance with accepted accounting principles, client directives, and applicable laws and regulations.
3.8. Deposit of funds. The management company shall exert due diligence for the protection of client’s funds against all foreseeable contingencies, depositing such funds in an escrow, trust, or agency account with an insured financial institution or as otherwise required by the client.
3.9. Disbursements. The management company shall disburse and account for outgoing funds and payables accurately; in a timely manner; in accordance with accepted accounting principles, client directives, and relevant laws and regulations; and with proper approvals.
3.10. Contracted vendors. The management company shall assess the needs of the property and use reasonably diligent efforts to hire qualified and experienced firms to perform services in accordance with client objectives.
3.11. Contractor insurance requirements. Contractors providing goods or services to a managed property shall be required to meet minimum insurance requirements, unless waived in writing by the owner. The management company shall develop and implement a system for the collection and monitoring of contractor certificates of insurance and compliance with insurance requirements.
3.12. Insurance claims. The management company shall first consult with the property owner and allow them to decide whether to make an insurance claim for a particular loss. For insurance claims filed on a managed property, the management company shall establish and follow a systematic procedure for reporting loss claims and potential loss claims relating to the property and for managing the claims process.
3.13. Emergency preparedness and response plan. The management company shall establish and, when necessary, follow emergency preparedness and emergency response plans and procedures for managed properties.
3.14. Maintaining a reasonably safe environment. The management company shall seek to maintain a reasonably safe environment to mitigate the risk of personal injury, theft, and property damage at the property.
3.15. Safety. Emergency and life safety equipment and components of a managed property shall be maintained in proper working condition and in compliance with all applicable codes, laws, and regulations, and as determined by the leases between parties.
3.16. Environmental and health safety and hazard control. The management company shall establish and maintain environmental and health safety management practices, where appropriate. Hazards shall be reported immediately to the client with a response plan.
3.17. Marketing plan. The management company shall develop and implement a written marketing plan for each managed property consistent with the client’s objectives.
3.18. Leasing policies and procedures. The management company shall develop and implement written leasing policies and procedures as appropriate for the property and in accordance with client objectives, company policy, and applicable laws and regulations.
3.19. Leasing plan. The management company shall have a written leasing plan for each managed property as appropriate for the property and in accordance with client objectives.
3.20. Rental rates. The management company shall establish rental rates based on assessment of the market and client objectives as appropriate for the property.
3.21. Property staffing. The management company shall provide for the adequate staffing of the property and supervision of property employees in accordance with client objectives.
3.22. Legal compliance. The management company shall manage property with knowledge of and in compliance with all applicable laws and regulations.
3.23. Sustainability. The property management company shall be knowledgeable about sustainable alternatives and able to integrate sustainable maintenance and operational practices into to the management of a property consistent with client directives.
3.24. Benchmarking. The property management company shall utilize benchmarking as a tool to assess property performance with the goal of identifying areas of improvement.
Tenant/Resident Relations Best Practices4.1. Leases/agreements. The management company shall ensure that a written agreement is in place for every tenant/resident occupying the property that specifically addresses the responsibilities of both the landlord and tenant.
4.2. Tenant/resident insurance requirements. If required by the client, leases shall specify the responsibilities of the tenant with respect to insurance, including any minimum coverages required, and the management company shall develop and implement a system for the collection and regular compliance review of tenants’ certificates of insurance.
4.3. Tenant/resident safety. The management company shall develop, maintain, and enforce, subject to individual leases between parties and applicable laws and regulations, general safety guidelines and awareness to protect tenants/residents and others lawfully on the common areas of the property.
4.4. Tenant/resident and occupant customer service. The management company shall have a customer service plan for tenants, residents, and others lawfully on the premises.
4.5. Tenant/resident selection. The management company shall develop and adhere to written policies and procedures on tenant selection that are consistent with client directives, company policy, and in compliance with applicable laws and regulations.
4.6. Lease compliance. The management company shall monitor that tenants are in compliance with lease terms, including but not limited to rent collections, and act accordingly in the event of noncompliance.
4.7. Privacy. The management company shall respect a tenant’s/resident’s privacy and not divulge sensitive or protected information that could violate that privacy, subject to applicable laws and regulations.