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Top Legal Issues Impacting Real Estate Managers and Landlords Identified in IREM Survey
A recently released survey identifies current and emerging legal/liability issues impacting real estate management professionals, including debt collection, frivolous lawsuits and wrongful termination.
Sponsored by the Institute of Real Estate Management (IREM) and funded jointly by IREM and the NATIONAL ASSOCIATION OF REALTORS (NAR), the survey queried IREM members in leadership positions with the organization about legal problems confronting them and their industry colleagues, and elicited perceptions about the impact of current economic conditions on these problems.
An analysis of upwards of 700 relevant cases decided over the past two years as well as related legislative and regulatory activities during the same period also are included in this independently conducted survey.
The most significant current legal problems survey respondents identified are those relating to the day-to-day business of managing properties. Debt collection is a major area of concern, with 69 percent of respondents stating that it was a significant source of current disputes. Among the economic factors adversely affecting debt-collection activities, said respondents, are the large numbers of retailers going out of business, growing lease defaults, and increasing numbers of residential tenants losing their jobs.
“Slip–and-fall” accidents and frivolous lawsuits, cited by 69 percent and 44 percent of respondents, respectively, also rank as top causes of current disputes. As with debt collection, many respondents believe the economic downturn is exacerbating both types of disputes. Some suggest that the depressed economy will lead more people to try to cash in on slips and falls.
Others suggest that opportunists looking for easy money target landlords in frivolous suits, hoping to cheat the system in hard economic times. Similarly, events on a property — situations in which a landlord or manager is blamed for a crime perpetrated by a third party — which ranked right under frivolous lawsuits as a key concern, is linked strongly to the recessionary environment. Some respondents cited the lack of jobs and other adverse economic conditions as reasons for the increasing the crime rate. Others observed that as the economy continues to decline, areas that were once rarely affected (by crime) have now been hard hit.
When asked to predict which problems would become more significant over the next two years, survey respondents again cited debt collection , frivolous lawsuits, slips and falls and events on a property. One employment issue — wrongful termination — also is seen to be increasing in importance.
By comparison, when the respondents were asked to rank potential future issues, several fair housing issues — handicap discrimination, advertising and target marketing, familial status discrimination and race and religious discrimination — ranked at the top of, or high on, the list.
Survey respondents also weighed in on where additional training may be needed to better deal with key legal issues and concerns. Their responses generally track the key issues identified in other parts of the survey, with training needs in the areas of debt collection and slip-and-fall incidents topping the list. Training also is perceived to be quite important to better handle issues related to potentially libelous occurrences on properties other than slips and falls; also, employee defamation and wrongful termination, and aspects of fair housing.