This chapter discusses property management and fair housing laws. It covers the types of properties that can be managed, the duties and responsibilities of property managers, and laws governing landlord-tenant relationships and discrimination in housing. The chapter also addresses selecting tenants, maintaining accurate records, rent control policies, and professional associations for property managers.

1. Chapter 13
Property Management
Managing and Leasing Properties

2. Property Management
 It is extremely important to have a full understanding
of the regulatory laws that govern less-than-
freehold-estates, also known as leasehold estates
 A “leasehold estate” is a tenant’s right to occupy real
estate during the specific term of a lease

3. I. Fair Housing Laws

4. Fair Housing Laws
 California first passed the Unruh Civil Rights Act and
then the Fair Employment and Housing Act
 Both laws dealt with discrimination issues
 The Federal Civil Rights Act of 1968 (expanded in
1988) reinforced both of the previous laws

6. A. State Law – Unruh Civil
Rights Act
 No discrimination in Business
 This act was the first civil rights act in California and
prohibits “steering” and “blockbusting” as a real
estate business practice

7. B. California Fair Employment
and Housing Act
 This act outlaws discrimination in housing
 FEHA clearly defines DISCRIMINATION as the
refusal to sell, rent, or lease housing
accommodations, including misrepresentation as to
availability, offering inferior terms, and cancellations
on the basis of race, color, national origin, religion,
sex, familial status, and handicap
 Not so many years ago, buyers of child-bearing age,
applying for financing on a purchase loan, were
questioned about their use of birth control

8. C. Housing Financial
Discrimination Act of 1977
 This act prohibits financial institutions from engaging in
discriminatory loan practices called “redlining”
 REDLINING is the practice of financial institutions
denying loans or varying finance terms based on the
location of a given property, regardless of the credit
worthiness of the borrower

9. D. Federal Civil Rights Act of
1968
 For all practical purposes, discrimination laws evolved
from the U.S. Supreme Court Case Jones v. Mayer, Title
VIII of the Civil Rights Act of 1968, and the 13th
Amendment to the U.S. Constitution
 In 1988, this Act was expanded to include protection
against familial status and the handicapped

11. II. Property Management

12. Property Management
 Few people possess sufficient knowledge, skill, and
time to manage their own properties
 As a property manager, you are in a better position to
assess your clients’
 insurance needs
 handle financing
 offer timely suggestions on exchanging or sale opportunities
 recommend other investment properties

13. A. Types of Properties
 The basic types of income-producing properties
include:
 Residential
 Office building
 Retail property
 Industrial property
 Apartment buildings lead in the demand for property
managers

14. B. Types of Property
Managers
 The principal goal of any manager is to minimize
expenses, maximize rents, and increase the long-
term appreciation of the property
 Outside Manager
 Resident Manager
 Institutional Manager

15. C. Duties and Responsibilities
of Property Managers
 A list of some important duties and functions of the
manager follows:
 Establish a rent schedule
 Rent vacant units
 Keep all plumbing, heating, and electrical in good working
order
 Maintain roof, windows, and doors
 Make sure floors, stairways, and railings are safe
 Keep premises clean and free of pests
 Qualify tenants
 Prepare and renew leases
 Collect rents
 Account for funds
 Submit monthly statements to owners

16. Tenant’s Responsibilities
 The tenant has the following responsibilities:
 Keep the dwelling clean and sanitary
 Use all fixtures properly, keeping them clean
 Cause no damage to the property
 Use property at state in the lease agreement
 Pay rent on time
 Give a 30-day notice when vacating a month-to-month
tenancy
 Return door and mailbox keys when vacating
 Leave unit in as clean a condition as taken at the start of the
lease

17. D. Landlord-Tenant
Termination Laws
 A 30-day termination notice must be given when the
possession of a rental unit is for less than one year
 A landlord must give 60-day notice to terminate the
tenancy if the tenant has lived in the dwelling for one
year or more
 A tenant ONLY needs to give a 30-day notice to
terminate a tenancy
 The THREE-DAY NOTICE TO QUIT states that the
tenant has three business days to pay all past due rent
or vacate the property or face an unlawful detainer

18. E. Selection of Property
Managers
 Property managers should possess skills and talent
in handling people, money, and a diversity of other
responsibilities
 When hiring a property manager, you should sign a
Management Contract with them which outlines the
duties and expectations of the job
 Outside professional managers are usually paid a
percentage of the gross revenue

20. F. Leasing and Tenant
Selection
 All rental applicants need to be screened carefully and the
proper and latest rental agreements need to be used
 The owner’s investment can be seriously impaired if proper
tenant selections are not done
 As a property manager in California, you may charge up to
$30.00 per applicant as a nonrefundable tenant screening fee
 Many forms for qualifying tenants are available

21. 1. Lease Contracts
 Any rental agreement that ends over one year from the
date of signing must be in writing
 Types of leaseholds:
 Estate for Years
 Estate from Period-to-Period
 Estate at Sufferance
 Estate at Will

22. 2. Establishing Rent
Schedules
 “Contract rent” is the current amount being paid,
and “economic rent” is the amount the unit could
make if available on the market today
 A good property manager is constantly working to
bring the contract rent up to the economic rent
 Types of leases:
 Flat rental
 Net leases
 Gross rental
 Percentage lease
 Graduated lease

23. G. Accurate Record Keeping
 There are a variety of computer programs available
to aid in maintaining accurate records
 A Cash Journal can be used to report cash received
from tenants
 An Activity Report summarizes all revenues and
expenses

24. H. Common Interest
Development Management
 A COMMON INTEREST DEVELOPMENT is a form of
home ownership whereby individual owners are allowed
the use of common property and facilities, the governing
of which is controlled by a homeowner’s association
 An homeowner’s association manager runs the day-to-
day affairs of the association, taking direction from the
board of directors
 The obligations of the association are set forth in the
CC&Rs
 The budget of the association is determined by the
amount of money required to operate and maintain the
common areas

25. I. Prepaid Rental Listing
Service
 In order to collect fees, a prepaid rental listing
service, must either be run by a broker or pay for a
new license every 2 years
 Because of many abusive practices in the past, all
PRLS must register with the DRE

26. J. Improving Value Through
Balanced Management
 Being a property manager is diverse job and it is
critical to keep a proper balance across all areas
 Determining when to spend or not spend money on
maintenance is a large part of the job
 Spending a little to maintain a property saves the
owner a lot in the long run
 As a property manager, you must be acutely aware of
changing conditions in the real estate market

27. K. Rent Control
• Rent control discourages the building of more
apartments, causing existing rents to go even higher,
further damaging a city’s housing affordability
• Rent control, in California, can only apply to residential
properties

28. L. Low-Income Housing
 Section 8 is a county rent subsidy for qualified
tenants who meet the required criteria
 The property must be approved by county inspectors
for eligibility and is checked for its condition at least
once a year

29. M. Professional Associations
for Managers
 The most notable professional association for
property managers is the Institute of Real Estate
Management, a division of the National Association
of Realtors®
 A Code of Ethics was adopted by the institute and
must be adhered to by any Realtor® applying for
membership

30. III. Going “Green”
Made Easy

31. Going Green

32. Chapter Summary
• Fair Housing Laws
• Unruh Civil Rights Act
• FEHA
• Housing Financial Discrimination
Act
• Federal Civil Rights Act 1968
• Property Management
• Types of Properties
• Types of Property Managers
• Duties and Responsibilities
• Landlord/Tenant Termination laws
• Selection of a Property Manager
• Leasing and Tenant Selection
• Accurate Record Keeping
• Common Interest Development
Management
• PRLS
• Balanced Management
• Rent Control
• Low-Income Housing
• Professional Associations for
Managers