When it comes to a property management company in NJ people seem to think that this is an easy job. But, just like any other authoritative figure, a company that manages properties such as apartments, condos, homes or even business buildings does have legal obligations and they need to be not only aware of those obligations, but also aware of state and local laws when it comes to property management regulations. When it comes to property management companies in any state, there are certain laws that need to be followed. Here are a few you might want to consider or should be aware of.
Using Trust Accounts
When a tenant signs up for a lease with a property management company, whether it be a single family home, apartment or a business building, their security deposit goes into what is called a trust account. This account is essentially one “purse” where all the tenants’ deposits go into. You may have seen this on the news as of late regarding a person that was a property manager and was using these funds illegally. Once money is placed into a trust account, it’s not supposed to be touched until the tenant moves out and receives their money back (or not because of underlying issues with the building that is their fault). A property manager, owner or anyone else is not supposed to use these funds for personal use, paying for non-tenant uses, or to be used as a way to pay yourself. This might seem shady, but it can also get you into hot water with the state and local government. Make sure when you hire a property management company that they really are trustworthy, not only when it comes to managing your property, but managing tenants money as well.
Chances are if you have something like town homes or apartments that you manage, at one point or another, you will run into at least one eviction in your career. But, evicting someone is not as easy as just telling them they have to leave. There are regulations in effect that protect the owner of the buildings, the manager, as well as the tenant. First off, you can only evict someone if they have either broken a rule that was set into place AND included into the lease OR someone that has not paid their rent for X amount of days. Every state is different. Some states allow 1 week while others allow 30 days. Make sure you read up on New Jersey laws pertaining to eviction laws. The eviction process can be a long and lengthy as well as expensive option, so make sure you do it right the first time around.
– You have to make a written notice that you are going to terminate the lease, you can use one of these three depending on why you want to terminate the lease: Pay Rent or Quit Notice, Cure or Quit Notice or Unconditional Quit Notice.
– You need to deliver this notice in person – don’t leave it on their door or in their mailbox.
If you manage a property and you have conditions in where it’s unlivable, dangerous, or unhealthy for a person to live in a building, this can also get you into trouble with the law. While in most states, things like black mold are not against the law however, you can still be taken to small claims court – which means you might need to pay money out to those people for health issues, medical issues, etc. If a building has something like lead paint, cockroaches or mice/rats, a tenant is legally allowed to move out without telling you (Civil Code 1942). Essentially this might not seem like a big deal, but you will be losing out on rent, and if they take you to small claims court, you will be paying them money. Unlivable conditions don’t just hurt tenants, they also end up hurting you and the owner of the buildings as well.