In the U.S., property management companies typically assist the communities they are a part of. For investors too busy to run their properties themselves, real property management companies act as an important go between and can handle everything from scheduling repairs to accepting rent. In Missouri, though, 1,350 people are suing one of the country’s largest rental property management companies for illegal lease provisions in a class action suit.
The group, comprised largely of disabled and low-income renters, all live in four apartment complexes within Missoula and Billings, both located in Montana. According to the lawsuit, the residential property management group allegedly violated state law by, for example, requiring tenants to pay cancellation fees and liquidated damages for lease termination, and by not offering default options.
In addition, it is illegal in Montana (and many other states) for landlords to illegally withhold security deposits, or require tenants to pay attorney fees in the case of a breach of contract.
“You usually don’t see a violation on that scope,” said Chris Froines, the Missoula attorney representing the plaintiffs in this case, referring to the rarity of class action lawsuits concerning tenant law. “It’s somewhat unusual.”
Luckily, most top property management companies would never behave this way. Many property owners are actively searching for great management companies; consequently, the industry has grown by 3.1% over the past five years. Management companies help to ensure renters are comfortable and thus, turnover is low. Maintenance, security, property upkeep and client services are all big parts of the equation.
What are some signs of great property management companies? Low vacancy rates, tenant referrals, tenants remaining for multiple lease periods, and a positive community reputation are all indicators that the company in question will take care of your tenants and not engage in any risky business practices in an attempt to cut corners.