How much info can a PM share with a landlord?
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Anthony GaydenPro Member
Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votesPaul Post
What do you mean? With concern to your property, I would say a PM should disclose anything and everything that you ask them to disclose.
47 Replies
Based on the many good posts I've read from you @Nathan Gesner I have a lot of respect for your knowledge of the L/T space, but in this case I disagree with your logic. Here's why.
The PM works for the owner (either contracted or direct employ). My understanding is that the OWNER can be held liable for the actions (or inactions) of the PM.
The belief that I am hiring a professional and I should just "trust" them to do their job and leave them alone is flawed. To me, that's like saying if you own a small business and you hire someone you delegate tasks to, you are "micromanaging" if you oversee their work from time to time. Your name is on the business. You as the business owner are ultimately responsible (legally and ethically) for the actions taken under that mantle.
As the OP stated, this is a new business relationship, and in my opinion there is much more downside to being laissez faire at this point as opposed to "hands on."
Trust, but verify.
- 7yJeff CopelandBusiness MemberReal Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
There is a lot of bad/inaccurate advice being shared in this thread.
A crucial point for property managers to understand: If you release the credit report to the landlord, or any other party, you just became a Credit Reporting Agency under the Fair Credit Reporting Act (federal law).
According to Attorney Cathy Lucrezi, "So, in addition to being a property manager, you become a "CRA" - subject to all the laws, regulations, and liabilities as Equifax. Not good."
A must read: http://www.evict.com/?page=articles_4 (note that the article on credit reports is the second one down the page, below Lock Out Procedures).
Copeland Morgan LLC4.770 Reviews - 7yJim BroznyPro MemberInvestor · Batavia, IL · Member since 2015 · 58 posts · 24 votes
@Jeff Copeland Thanks for providing the article.
For me, this statement is key, "The owner designated you as agent for the purpose (among others) of finding a tenant. Since he has delegated that authority to you, the owner has no appropriate purpose for the credit report." This makes sense if the PM does not involve the owner in any aspect of the tenant search and leasing process, including final approval and signing the lease.
My question - what if the PM requires the owner to provide final approval of the tenant before signing a new lease? In this case, isn't the the PM refusing the authority to find a new tenant for the owner? Shouldn't the owner have right to all information necessary to make a fully informed approval decision?
- 7yJeff CopelandBusiness MemberReal Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
@Jim Brozny - Great question. I did not write the article, so you'd have to ask the attorney who did.
I can tell you I have been in this situation (where a landlord wanted the SSN and credit report to sue a tenant for damages), and I discussed it with the law firm that published the article. They generally supported the position in the article and said it's still a matter of legal debate, but NOT with regard to consumer reports. They were very clear on the fact that a PM "definitely cannot share consumer reports."
What I tell owners is "I can discuss the credit report with you, I can tell you their score and tell you how it looks, but I cannot share the credit report itself or the applicant's SSN with you".
It's a federal law, I didn't create it or necessarily agree with it, but I have to comply with it as a property manager.
If you don't like it, write your congressional representatives I suppose.
Copeland Morgan LLC4.770 Reviews - Investor · Tempe, AZ · Member since 2018 · 1k+ posts · 731 votes7y
I am sure most Management Agreements have a clause in that grants them the power of agency. Even though you hired them and it's your property, there are still regulations all must follow.
It'd be the same if roles were reversed. If you did the tenant screening then you could not share the reports with another individual. Now the individual may choose to send their own reports to multiple parties, but that is their obligation.
- 7yJim BroznyPro MemberInvestor · Batavia, IL · Member since 2015 · 58 posts · 24 votes
@Kenny Dahill. You are probably right. But, if the management agreement grants the PM company the power of agency, would the management company still require the owner to provide final approval of a tenant? Shouldn't the management company be able to approve the best tenant as the agent of the owner?
- Investor · Tempe, AZ · Member since 2018 · 1k+ posts · 731 votes7y
@Jim Brozny, I'm assuming that is covered with the power of agency. I'm not a PM or legal professional though.
There are landlords who will always want that control to at least approve applicants. On the other hand, that's often why you hired a PM in the first place...
I am property owner and uses a PM. After 5 months non payment, Tenant finally got evicted. The eviction crew + sheriff cost $760 and additional $300 for trash out hired by the PM. Yet still driveway and yard were left with dangerous debris. You tell me if the PM has done a good job! In reviewing the court record of the tenant myself (by the Tenant name), I found 2 judgments (7 and 4 years respectively prior to she rented my property). The move out scope of work produced by PM missed tons of important items: such as garage door damage, cigarette damage, etc. When I brought these up to the PM, I was met with dismissal. They offer "to make it as right as possible" to only charge me 25% of 1 month rent in order to place the next Tenant. I will be hiring collection attorney to pursue the back rent and damages because I have come to the conclusion PM will not be aggressively represent me in pursuing all that is legally owed to me. So now you have a hard core Landlord, and a PM who prefer to move on and will see little value in exhausting all legal recourse in pursuing the back rent. This dynamic is not working for me. So my decision is to let PM stay out of the collection process. Let me work with my collection attorney on that process and let PM just handle placing next Tenant and onward. I will need to have input on who is allowed to rent my property next time because I do not trust the judgment and lack of standard and care to my property.
- 6yPatrick LiskaPro MemberInvestor · Verona, NJ · Member since 2014 · 1k+ posts · 832 votes
@Jeff Copeland, @Nathan Gesner I have a question for you on this, I have posted to this in the past and feel that all tenant information belongs to the owner, but find myself in a situation with this right now. A year ago I switched property managers, the past PM placed the tenant in the house. at the time of switching the new PM tried to get all the tenant information from the old PM and was unsuccessful in the beginning. now the tenant has left and they owe money, and we want to put them in collection, we again tried getting SS# info to put them into collection and the old PM is still refusing to give it to us. what does one do in that situation?
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes6y
Originally posted by @Nathan Gesner:
NO!
The property manager should NEVER release the credit report to an owner. READ THIS ARTICLE
The tenant is authorizing you to run a credit/criminal for the purpose of renting. Once they've been screened, that purpose is met. It does not authorize you to use their information for other reasons and you would open yourself up to a potential lawsuit. I don't even keep copies in the office. I don't keep printed copies of their social, date of birth, driver's license, etc. I have a responsibility to protect them from identity theft.
If you are a Property Manager, you should only share the minimum and keep it generic. For example, I won't share anything with the owner until the Applicant is approved. Why? Because I don't want to give the owner a chance to reject them in a manner that may violate Fair Housing.
Here's an example:
"Hey, John. We have a new tenant for 123 Maple Street. They move in February 15th with a one-year lease. Rent is $1,400 a month. Their security deposit is $1,400 and they paid a $300 non-refundable pet fee."
I'm a professional and take my job seriously. If someone hires me to manage their property, I make it clear that I will manage their property and do not need a baby-sitter. If they want to micro-manage their investments and be involved in every decision or know every detail, I'm not the right guy for them.
If your owners demand to know all the details, it demonstrates a lack of trust which means they are micro-managers or you haven't proven yourself yet.
Could an owner be held responsible for behavior by a PM that the owner was unaware of because the PM didn't share info? Take the example of fair housing. If an owner is unaware of a PMs violation of fair housing, are they free from liability?
- 6yJeff CopelandBusiness MemberReal Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
Originally posted by @Patrick Liska:
@Jeff Copeland, @Nathan Gesner I have a question for you on this, I have posted to this in the past and feel that all tenant information belongs to the owner, but find myself in a situation with this right now. A year ago I switched property managers, the past PM placed the tenant in the house. at the time of switching the new PM tried to get all the tenant information from the old PM and was unsuccessful in the beginning. now the tenant has left and they owe money, and we want to put them in collection, we again tried getting SS# info to put them into collection and the old PM is still refusing to give it to us. what does one do in that situation?
I have been in that exact situation (as the original PM who was being asked to share the SSN with the new PM so they could pursue collections). My attorney advised:
"...the management company was hired by the owner to screen applicants and make decisions about what applicants were approved, ...[there is] no clear authority to share privileged information in the application with the owner, such as SSN information. The point is still a matter of legal debate, but NOT with regard to consumer [credit] reports. [The property manager] definitely cannot share consumer reports."
I'm also in a state where it's impossible to collect from past tenants, so the request was rather pointless.
Copeland Morgan LLC4.770 Reviews - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes6y
Originally posted by @Jeff Copeland:
Originally posted by @Patrick Liska:
@Jeff Copeland, @Nathan Gesner I have a question for you on this, I have posted to this in the past and feel that all tenant information belongs to the owner, but find myself in a situation with this right now. A year ago I switched property managers, the past PM placed the tenant in the house. at the time of switching the new PM tried to get all the tenant information from the old PM and was unsuccessful in the beginning. now the tenant has left and they owe money, and we want to put them in collection, we again tried getting SS# info to put them into collection and the old PM is still refusing to give it to us. what does one do in that situation?
I have been in that exact situation (as the original PM who was being asked to share the SSN with the new PM so they could pursue collections). My attorney advised:
"...the management company was hired by the owner to screen applicants and make decisions about what applicants were approved, ...[there is] no clear authority to share privileged information in the application with the owner, such as SSN information. The point is still a matter of legal debate, but NOT with regard to consumer [credit] reports. [The property manager] definitely cannot share consumer reports."
I'm also in a state where it's impossible to collect from past tenants, so the request was rather pointless.
Sharing consumer reports is different than sharing the actual application. The application is property of the property manager who is acting on behalf of the owner, therefore the file is the property of the owner.
I would demand they turn over a copy of the entire file. If they refuse, demand they handle the collection or file a complaint with the state board.
The DIY Landlord Book4.7243 Reviews - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes6y
Absolutely!!!!
I knew a guy that was in a partnership on a 100-unit apartment complex in California. Except for the financials, he and his partners had no involvement with the property or day-to-day dealings. His property manager was sued for a Fair Housing violation. He and his partners were all called out for the trial and I believe he said they spent nearly $300,000 on attorneys. I'm sure most of that was covered by insurance.
After that trial, they sold both their complexes and moved all their money out of the state.
The DIY Landlord Book4.7243 Reviews - Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes6y
Originally posted by @Nathan Gesner:
Absolutely!!!!
I knew a guy that was in a partnership on a 100-unit apartment complex in California. Except for the financials, he and his partners had no involvement with the property or day-to-day dealings. His property manager was sued for a Fair Housing violation. He and his partners were all called out for the trial and I believe he said they spent nearly $300,000 on attorneys. I'm sure most of that was covered by insurance.
After that trial, they sold both their complexes and moved all their money out of the state.
I see. If that's the case I don't see how one could justify not sharing all info that an owner could potentially be held liable for.
- 6yPatrick LiskaPro MemberInvestor · Verona, NJ · Member since 2014 · 1k+ posts · 832 votes
@Jeff Copeland,@Nathan Gesner Thank you for the responses ! I have my Attorney working on it, but wanted your opinions on it. my PM and I were trying to get the information before taking it further but and it has come to me getting an Attorney involved. I Let you know what the outcome is, and Nathan, it will come to me filing a complaint with the State Board and possibly more, since they are costing me money at this point. Thank you Guys
- Real Estate Consultant · Joppa, MD · Member since 2015 · 218 posts · 178 votes6y
@Ying B. You definitely hired the wrong PM company. If those judgements were landlord related, that tenant should not have been allowed to lease your house. Seeing as though they also failed to get a complete list of damages during the moveout inspection, I suspect you were dealing with an inexperienced PM. What sealed the deal for me, was you saying your complaints were met with dismissal. I would check the agreement to see how quickly you can terminate the management contract because I doubt you will receive the service you are looking for with this PM. Just remember, you're paying them so they should be working for you, not against you.
Best of luck to you!
Laticia
- Member since 2021 · 1 post · 1 vote5y
I just became a landlord in FL and live in CA and hired a property manager in FL. On my first annual rental the property manager refused to share the completed rental application and screening reports with me, under the pretext or privacy, FCRA laws, etc. Needless to say I was infuriated, as it's my money on the line and I absolutely want to make the decision to accept a tenant, and I'm not going to delegate that authority to any property manager. So I've solved this by getting the applicant's explicit written consent to allow the property manager and landlord to share rental applications and screening reports. Here's the language I use:
Consent to Contact References and Perform Credit Check
I authorize [Type Agent Name Here] (“Agent”) to obtain, and to share with [Type Landlord Name Here] (“Landlord”), information about me from my credit sources, current and previous landlords, employers, and personal references, to enable Landlord and Agent to evaluate my rental application.
I give permission for the Landlord or its Agent to obtain a consumer report about me for the purpose of this application, to ensure that I continue to meet the terms of the tenancy, for the collection and recovery of any financial obligations relating to my tenancy, or for any other permissible purpose.
I authorize Agent to share my completed rental application (along with any supporting materials) with the Landlord.
Applicant signature: _________________________________Printed name: ______________________________________
Address: __________________________________________
__________________________________________Phone Number: _____________________________________
Date: ______________________________________________
- Property Manager · Member since 2020 · 108 posts · 68 votes5y
@Paul Post yes, we share anything the owner wants to know
- North Las Vegas, NV · Member since 2015 · 12 posts · 2 votes5y
The realtors association and a real estate attorney confirmed that a property manager has agency with the landlord and is working for the landlord. It wouldn't make sense that you lose rights that you would normally have managing a property yourself, just because you hired a property manager. Landlords are liable for whomever is in their property and PM are agents thus require the same fiduciary relationship as in any other real estate transaction. This is what they provided:
My client/landlord is demanding I provide copies of the rental application to him/her. Can I do that or is this information confidential? A2. Let’s break this answer down to extract best practices: First - Look at the Contract! What does your lease agreement say, if anything? If it’s addressed, defer to that. If it’s not, see the second point made here which is…. Second - Set Client Expectations from the Get Go! What’s the client’s expectations? If the property management agreement doesn’t address it, ask your client their expectations and memorialize that in the agreement. Include as part of this discussion how the agent actually protects the landlord by ensuring the application process adheres to Fair Housing standards. Third - Refer and Defer to Brokerage Policy! Refer to your brokerage/broker’s policies and defer to those.
Fourth - What does the law say? NRS 645.252 and 645.254 creates
confidentiality between the agent and the client - that would be the landlord. That
duty of confidentiality needs to be counterbalanced with NRS 645.252(2) which
requires care and skill to ALL parties, which would include the tenant. The rental
application inherently contains personal information subject to NRS 603A: NRS:
CHAPTER 603A - SECURITY AND PRIVACY OF PERSONAL
INFORMATION (state.nv.us). Ask the client/landlord, what’s the purpose of the
request? Is it to file a lawsuit? OK - what information is necessary to do so
(parties legal name, address, etc.) and consider providing just the necessary
information.The relationship between a real estate agent and a client is called a fiduciary relationship. Fiduciary means faithful servant, and an agent is a fiduciary of the client. In real estate, a broker or a salesperson can be the agent of a seller or a buyer.
Here’s a list of the fiduciary duties that an agent owes her client:
- Accounting: The agent must account for all funds entrusted to her and not commingle (combine) client/customer funds with her personal and/or business funds.
- Care: The agent must use all of her skills to the best of her ability on behalf of the client.
- Confidentiality: The agent must keep confidential any information given to her by her client, especially information that may be damaging to the client in a negotiation.
- Disclosure: The agent must disclose to the client any information she receives that may benefit the client’s position in a negotiation.
- Loyalty: The agent owes undivided loyalty to the client and puts the client’s interests above her own.
- Obedience: The agent must obey all lawful orders that the client gives her.
- Member since 2024 · 4 posts · 1 vote2y
Quote from @Nathan Gesner:
@Lana Lee there are only two reasons for babysitting a PM: you are a micromanager or the PM is incapable of demonstrating their worth. I'll assume it's the latter.
When a Landlord asks me to manage a property, I can show them how I score applicants. My scoring criteria is clearly spelled out in writing and I use an objective score sheet to determine approval or denial. Once I show the Landlord my process, there is no need for them to question why I approved a certain individual because they already know my screening was stringent, fair, and objective. If your PM is unable to demonstrate their process to your satisfaction then I suggest you either help train them to do better or find another PM.
People turn their money over to investors all the time. Do they require the investor to call before making any investment decisions? Of course not! They trust the investor to know the business far better than they ever could so he is left alone to do his job. The same is true with property management. Hire correctly and your rentals should be very hands-off.
@Nathan Gesner would you mind sharing your scoring criteria? This is something i've been trying to define myself as I don't want to rely on the first come first serve method.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes2y
Quote from @Hunter McNeill:
Quote from @Nathan Gesner:
@Lana Lee there are only two reasons for babysitting a PM: you are a micromanager or the PM is incapable of demonstrating their worth. I'll assume it's the latter.
When a Landlord asks me to manage a property, I can show them how I score applicants. My scoring criteria is clearly spelled out in writing and I use an objective score sheet to determine approval or denial. Once I show the Landlord my process, there is no need for them to question why I approved a certain individual because they already know my screening was stringent, fair, and objective. If your PM is unable to demonstrate their process to your satisfaction then I suggest you either help train them to do better or find another PM.
People turn their money over to investors all the time. Do they require the investor to call before making any investment decisions? Of course not! They trust the investor to know the business far better than they ever could so he is left alone to do his job. The same is true with property management. Hire correctly and your rentals should be very hands-off.
@Nathan Gesner would you mind sharing your scoring criteria? This is something i've been trying to define myself as I don't want to rely on the first come first serve method.
You can connect with me and send a request, then I can share it.
The DIY Landlord Book4.7243 Reviews
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