Property management can include many responsibilities—including collecting rent and addressing maintenance issues.
Also included under property management is records-keeping. Records-keeping – defined broadly – involves the maintenance of a history of one’s activities, as financial dealings, by entering data in ledgers or journals, putting documents in files, etc.
As with other aspects of real estate and property management, there are state-by-state guidelines on what can and needs to be done in relation to records keeping.
Below, we explore the variation in such guidance and overview some habits that can help property management professionals ensure compliance.
Records-Keeping in Property Management
We can see records-keeping guidance through three questions: How? How long? And, where? These three questions are further varied by state.
For example, some states mandate that records be kept for longer periods of time than other states. In a specific comparison, while Florida mandates that records be kept for at least five years, Colorado sets a minimum record retention time of four years.
How to Ensure Compliance
Know the Law
Ensuring compliance involves knowing, understanding, and following the laws, regulations, and policies at federal, state, and local levels. Period.
Values that Can Create a Culture of Compliance
Thoroughness
Encouraging thoroughness—great care and attention to detail—is a great way to build a culture of compliance. This value and skill can be seen through the idea of “measure twice, cut once.”
But, how do we implement thoroughness in practice? There are a number of strategies to do so, including:
checklists – checking off each step in the process of recording and filing information, which can help us remember all necessary steps; and
double-checking through cross-referencing – having an extra pair of eyes to look over tasks completed, which can be a “quality control” step.
Similarly, there are sub-strategies that can underpin thoroughness:
having employees who have a passion for property management overall; and
setting an example for employees.
Thoroughness creates the foundation for the next two skills.
Accuracy and Precision
People often interchange the use of the terms accuracy and precision. But, according to a presentation by educator Matt Anticole, these terms have different meanings:
Accuracy – how close you come to the correct result;
Precision – how consistently you can get that result.
The key to accuracy is training. Making sure the employees at your property management firm are properly-trained is important for ensuring they have the know-how to perform various functions.
Regular meetings and “update” trainings may also help keep employees – and yourself – on track.
Transparency
Transparency can be seen as (a) being readily understood and (b) visibility or accessibility of information especially concerning business practices.
Strategies to build a transparent environment can include, among others:
patience with being open to questions;
encouraging effective communication skills; and
setting an example.
Is There Help?
Yes, there is help for ensuring compliance. Designated Broker Solutions has an extensive knowledge of state laws on property management.
Contact us for more information.
Compliance is worth it.