compassion for this woman and give her the waiver. But there was nothing in our written policy on late fees that would allow for a waiver in this circumstance. After a decade in business managing hundreds of houses, it surprisingly had just never come up before. We have a written policy that contains five different circumstances under which we’ll waive late fees. This was not one of them. So, I had to go against my “gut” and tell this poor woman that my hands were tied, and I simply couldn’t approve a waiver because it wasn’t allowed in our policy. It may not feel great, but it was the smart decision, because it prevents any tenant from ever being able to say that we display favorit- ism and don’t stick to our written policies. I can still walk into court,
sit on the witness stand, and testify that we have never deviated from our written late-fee policy. And no opposing counsel could ever show any evidence to the contrary. We have since amended our written policy to include the ability to wave late fees under this kind of circum- stance in the future. However, we couldn’t make it retroactive to help this tenant as that might be consid- ered favoritism. Remember, your business is your livelihood. Litigation risk doesn’t just mean the risk of legal fees, it also means the risk of a monetary judgment against you that could bankrupt your company. At a recent NARPM ® Broker/ Owner Conference, one of the speak- ers discussed how every one of us has a dollar amount that would end our company if we had to write a check for
that amount. That amount varies widely from person to person, but every single one of us has that number. Insurance provides some protection, and we all need to make sure our insurance is in place, reviewed regularly, and covers what it needs to cover. But insurance coverage should be the failsafe, not the front-line defense. Solid risk mitigation strategies such as those discussed in this article should be your front-line defense so that the insurance coverage never has to pay out a claim. In other words, let’s all stop saying “it depends,” and instead ask “what does the written policy say?” •
Todd J. Ortscheid is with GTL Real Estate in Senoia, GA, and a member of the National Association of Residential Property Managers ® (NARPM).
32 | think realty housing news report :: june / july 2019
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