Magazine article Journal of Property Management

Resolving Disputes

Magazine article Journal of Property Management

Resolving Disputes

Article excerpt

Nobody needs to remind a seasoned real estate professional of the nearly constant threat of lawsuits and legal disputes. Property managers are exposed to a variety of problems relating to the management of real estate and often find themselves attempting to resolve disputes on their own. When their efforts are unsuccessful, property managers also are required to participate in the time-consuming task of litigation. The purpose of this article is to identify ways for property managers to avoid litigation while preserving the best possible case, factually and legally, if litigation proves unavoidable.

The types of disputes that can arise are as varied as the real estate industry itself. Most commonly, disputes are associated with defective tenant improvements, contractual obligations, contractor delays, and business-interruption claims. There also are claims made directly against property managers from parties injured on property and by owner-- clients that are not satisfied with the financial performance of a property and seek monetary recovery from their managers. Some managers also must respond to complex environmental issues that have significant consequences.

Rather than address the intricacies of the legal issues that may arise in each of these unique situations, some basic guidelines to protect yourself and your clients from the pitfalls of litigation should prove to be invaluable advice.

Write Right

Whether complaints are addressed to you through conversation or letter, it is advisable to respond in writing rather than communicating verbally. Likewise, if you have a particular complaint about someone else, preparing a careful and clear letter is better than having a discussion over the phone, particularly when you anticipate that a dispute may escalate.

This advice may be inconsistent with your normal business style, but the reason is fairly simple. You need to accurately track the dispute and the proposal for resolution. Although property managers frequently communicate verbally to conduct management duties, a disciplined approach using letters to communicate your position will benefit you in the long run. You can certainly make contact with the other parties of the dispute by telephone or in person, but you should do so after clearly stating, in writing, the history of the dispute and your position. Should you have conversations or meetings regarding a dispute, summarize the key points of the conversation in a letter so no misunderstandings arise later.

You should be accurate and truthful in correspondence concerning a dispute. Avoid opinions, threats, or statements that could be construed as admissions of wrongdoing. Depending upon the complexity of the dispute or the risk of potential litigation, it may be advisable to have an attorney review statements that are made to other parties prior to sending your letter.

The Attorney's Role

It should go without saying that many disagreements could be avoided if greater care were taken before the disagreement becomes a dispute. When in doubt, consulting a lawyer early on can prove to be a tremendous investment. Hiring a professional to assist you in complex contracts or sophisticated business dealings may be one of the best investments that you can make since litigation and liability costs of even one dispute can far outweigh the expenditures of consulting with an attorney on your complex dealings.

Once you find yourself in a dispute, you should set a game plan. An attorney can advise you about the various strategies and risks and can assist you in negotiating the resolution of the dispute. Having an attorney communicate on your behalf can also allow you to maintain ongoing business relationships with adverse parties beyond the resolution of the dispute at hand.

Alternatives to full blown litigation exist even if a dispute is not resolved through informal negotiations by the parties. An attorney can explore these options with you and develop an alternative dispute resolution strategy. …

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