Revenue Increasing Techniques and the Law: A Guide for Property Managers

Revenue Increasing Techniques and the Law: A Guide for Property Managers

In the competitive world of property management, increasing revenue is a common goal. However, it’s essential to understand the legal boundaries that govern various revenue-generating techniques. This article aims to shed light on some common practices, their legality, and the importance of informed decision-making.

1. Excessive Late Fees

Florida Statutes don’t specifically address late fees. The amount you can charge for late rent is undefined, and while you can include late charges on your Three Day Notice, the key is to ensure that these charges correlate with the damages suffered due to late payment. Be cautious, as excessive late charges might be considered usurious under Florida law.

2. Lease Renewal Fees

Charging a fee upon lease renewal is a practice some managers follow. While this fee is likely legal, it’s advisable to disclose this charge at the time of signing the lease or as soon as you decide to implement it.

3. Notice Posting or Delivery Fees

Charging a fee for serving a Three Day Notice is a gray area. While not specifically illegal, it might not be well-received by a judge. It’s best to consult with legal counsel before implementing this fee.

4. Administrative Fees

Administrative or “Move-In” fees can help recoup some of the expenses involved in getting a resident into a unit. However, failure to disclose these charges in advertising or upon first contact with a prospective resident could be considered illegal.

5. Redecorating Fees

Charging a nonrefundable “redecorating fee” might be seen as an attempt to make residents pay for ordinary wear and tear or someone else’s damages. This practice could have legal risks.

6. Upcharges for Credit Checking

Charging more for conducting a credit check than the cost incurred might be seen as unfair. Some states have placed limitations on this charge, so it’s wise to have clear credit checking procedures in place.

Conclusion: Navigating the Legal Landscape

Property managers must navigate a complex legal landscape when implementing revenue-increasing techniques. While some practices may seem lucrative, they can also carry significant legal risks.

Here are some key takeaways for property managers:

• Consult with Legal Counsel: Before implementing any new charges, consult with an attorney to understand the legal implications.
• Full Disclosure: If you decide to charge additional fees, ensure that they are clearly disclosed to avoid accusations of unfair practices.
• Avoid Assumptions: Just because other property management companies are charging certain fees doesn’t make them legal or advisable.
• Balance Risk and Reward: Analyze the potential risks and benefits of each charge, and make informed decisions that align with your business goals and legal obligations.

By understanding the legal boundaries and making informed decisions, property managers can explore revenue-increasing techniques without jeopardizing their reputation or legal standing. Always prioritize transparency, fairness, and legal compliance to build trust with your residents and ensure a successful property management business.

Disclaimer: This article is intended for informational purposes only and does not constitute legal advice. Always consult with a qualified attorney to understand the specific legal requirements applicable to your situation.