Residential Property Management Procedures …

1 Written byLarry E. McCarthypublished byA practical guide for developing a Property -specific Procedures manualResidentialProperty ManagementProcedures manual Copyright 1999 LARRY McCARTHY,Capacity Building Program Director forCommunity Investment Corporation, beganhis Property Management career in that spiraling costs of buildinglocked more families out of decent housingeach year, McCarthy decided to work onfinding solutions to the needs of lowerincome families. This decision led him tothe Illinois Housing Development Authority(IHDA) in 1978. During his four yearswith IHDA, he was involved with themanagement of more than 6,600 affordableapartments throughout Illinois and was amember of the agency s team assigned toturn around troubled is a nationally recognizedaffordable housing Management expert. Heserved for nine years as the President ofRESCORP Realty, Inc.

2 , which managed amulti-family rental housing portfolio in theChicagoland area. Under McCarthy sguidance, that portfolio expanded from1,600 to more than 4,000 rental July of 1991, a joint venture partnershipthat McCarthy formed between RESCORPR ealty and Frank J. Williams Realty wasawarded the Management of the ChicagoHousing Authority s innovative Lake ParcPlace. Under McCarthy s leadership, LakeParc Place received worldwide recognitionfor excellence in publicly funded touring Lake Parc Place, housingofficials from virtually every state in thenation as well as dozens of foreignAbout the AuthoriiResidential Property Management Procedures Manualcountries praised the quality of the propertymanagement. Newsweek magazine calledLake Parc Place A housing program thatactually works and CNN described theproperty as the best managed publichousing in the country.

3 McCarthy was the Chairman of theChicago Board of Realtors PropertyManagement Council from 1988 to co-founded and served as President ofthe Property Management Resource Center,a non-profit corporation formed to provideproperty Management expertise to groupswho develop low and moderate-incomehousing. In addition Mr. McCarthy hasbeen a member and director of theApartment Building Owners and ManagersAssociation (ABOMA) and a director of theChicago Association of Realtors, where healso served as Chairman of their Govern-ment Affairs Committee. He was a co-founder and served as a director of TheReal Estate Job Bank, an organizationdedicated to employment opportunities forminorities within the real estate McCarthy worked for Draper &Kramer (D&K), Inc. where he oversaw aportfolio consisting of over 1,900 urbanand suburban Residential apartments and400,000 + sq.

4 Ft. of retail shopping to joining D&K, McCarthy was aregional Vice President with SecurityPacific, Inc. a Property owner based inSeattle, Washington. He was responsible forthe Midwest region, which included over11,000 apartments in a five-state wish to thank the following individualswho have provided either materials that areincluded or assistance in the production ofthis manual . Sue Brady Pam Gecan, American MarketingServices for her assistance in Marketing David A. Schucker of TheLeadership Council for Metro-politanOpen CommunitiesCOMMUNITY INVESTMENT CORPORATIONC ommunity Investment Corporation (CIC) is a mortgage banking firm created in 1974, by Chicago sbanking community. Fifty-one banks, plus Peoples Gas, Fannie Mae, and the Untied MethodistPension Fund, share proportionally in each CIC s mission is to be the leading force in neighborhood revitalization through innovative financingprograms.

5 CIC is intended to serve as a catalyst for needed rehab lending and to foster the successof cost-effective specializes in multifamily rehabilitation lending. In its first 15 years of multifamily lending,1984 to 1999, CIC has made 1092 loans totaling $415 million in CIC funds on buildings with28,000 apartment units. CIC borrowers have received over $500 million in various financingprograms including no or low interest financing, tandem processed, and government secondmortgages. About 20% of CIC loans have government second takes pride in its ability to offer timely loan processing and support through its dedicated andexperienced loan officer, construction review and closing is committed to increasing the professional skills and knowledge of hands-on building ownersand Property managers. In 1999 CIC will conduct fifteen basic level courses in Property manage-ment and maintenance.

6 The courses will be conducted over four consecutive evenings, three hoursper evening, throughout the Chicagoland area. Additional one evening courses are regularly held onseasonal topics such as landscaping (spring) or energy savings and heating systems (fall), plusregular topics related to the first ten of its twenty-five years, CIC helped pioneer single family rehab lending in low andmoderate income communities, providing $15 million in loans to rehabilitate 989 single familyunits. CIC also provided home ownership counseling and technical assistance to 2,500 CIC at (312) 258-0070 for information on loan products and rates, or to find out about trainingsessions near Property Management Procedures Manual5 Table of ContentsIntroduction .. page 21 New Property Take-Over .. page 42 Tenant Selection Plan .. page 93 Fair Housing.

7 Page 214 Marketing .. page 365 Tenant Handbook .. page 426 Rent Collection .. page 517 Evictions .. page 538 Enforcement .. page 599 Illegal Activities .. page 60 Budgeting .. page 65 Maintenance .. page 701011 Residential Property Management Procedures ManualPBIntroduction here was a time when the ownership and Management of an apartment buildingwere largely unregulated. Landlordswere virtually free to rent and operatetheir Property in any fashion theydeemed reasonable. All you reallyneeded was the money for a downpayment, a building to purchase, acooperative lender and you were have changed. Today sapartment industry has becomeconsiderably more regulated. Land-lords must comply with many FairHousing laws. In addition, somemunicipalities regulate the wayproperties are managed as well as themanner and speed in which landlordsservice the maintenance needs oftheir tenants.

8 Among the require-ments today s landlords face are setminimum amounts of heat in thewinter and the installation of earlywarning devices to protect againstsmoke inhalation and carbon monox-ide task of managing Residential realestate has grown increasingly depen-dent upon the ability to skillfullyoperate within both the demands ofthe marketplace and the laws thatregulate the industry. Today sproperty manager must be able tocompete with the manager of thebuilding down the street for suitabletenants and, at the same time,comply with federal, state, countyand local fair housing laws. In manycities, including Chicago and smallermunicipalities, landlords mustcomply with tenant/landlord ordi-nances and with rules concerningillegal activities committed bytenants. Failure to comply can, insome cases, result in seizure of key to successful operation ofany Property is planning.

9 All prop-erty owners need a written planguiding the day-to-day operation oftheir buildings. In fact, the actualplanning should start prior topurchasing a Property . Pre-purchaseplanning should include deciding inwhat neighborhood or area you wantto buy, what size building you wantto buy, and what mix of bedroom-sizeapartments you want. You will alsohave to decide whether you want tobuy a fix-it-upper, a brand newbuilding, or something in planning should includehow and where to finance yourpurchase, how much equity you haveavailable and want to invest, andwhat improvements you want tomake upon closing the you ve answered these ques-tions, you re ready to decide on ahost of Management and mainte-nance issues including the prepara-tion of written plan on how toaddress those issues. This manual isintended as a guide for owners andmanagers of multi-family buildingsfor use in creating an operationsmanual for their own specific prop-erty.

10 This manual contains proce-dures and policies that have beenemployed in various types of build-ings throughout the Chicago metro-politan area. With minor modifica-tions, this Procedures manual willserve the needs of most multi-familybuilding owners and it comes to rental policies,every owner must recognize that therental policies you develop must bedocumented and enforced. Whetherthey are based on objective rules orsubjective preferences, rental policiesmust be put in writing and applied ina fair and equal manner to everyonewho inquires about, makes applica-tion for, or rents in your buildingNegligence in the operation of abuilding can and often will result inlegal liability for any of the laws is no you plan on owning or managingan apartment building, you must beaware of the rules and regulationsthat affect the way in which youoperate that building.