SF Apartment : November 2016


By the Book

by Eric Andresen

I know that I’m not alone in wanting to maximize my cash flow, minimize my expenses, and maintain my rents at the highest level allowed by law and the market. But all too often I find myself getting mired down in thinking about a certain month’s bottom line rather than the scope of a full year or longer. I often have to remind myself that short-term decisions can dramatically impact the future performance and security of my investment and long-term goals.

We all know that routine property maintenance and capital improvements are crucial to avoid costly long-term expenses and to protect our investment. So why are we so hesitant to commit the same consideration and effort to also legally protect ourselves?

When a situation arises where we could benefit from legal support, we inevitably balk at the cost. We cross our fingers and hope that we can just deal with the situation appropriately on our own. Or we’ll push the issue to the back burner, hoping that it’ll be a more affordable expense down the road or that the problem will just simply go away. Unfortunately, this almost never works out to be the most appropriate course of action, and so many of us have a very difficult time learning this lesson.

With all of the regulatory and legal hurdles for property owners in San Francisco, it’s almost impossible to effectively manage a property without regular legal support. In my opinion, it is vital to be willing to routinely review issues and decisions with legal counsel, if for no other reason than to provide a little peace of mind and assurance that we’re still managing our properties ethically and legally.

I can’t even begin to count the number of times I’ve woken up in the middle of the night to think about some decision or action that I hoped was made appropriately. I’ve lost so many hours of sleep worrying about whether or not I did the right thing, or if a decision I’d made would eventually lead to unpleasant consequences. In hindsight, I recognize that if I’d just taken a small amount of time to review important issues with an attorney before making decisions, I’d have felt much more confident and far less stressed—not to mention, well-rested.

I know—attorneys are expensive, and we rarely budget enough in our financial plans to cover this expense. However, a qualified attorney with whom you have a good working relationship can make such a huge difference when it comes to the long-term condition of your investment, let alone your own long-term health and well-being.

I also believe, strongly, that we have a duty to our industry to manage our properties in the most appropriate and ethical manner as possible. One wrong decision can lead to disaster—not only for ourselves, but potentially for other property owners and the entire San Francisco rental industry. Dozens of situations immediately come to mind when one bad decision, even an innocent one, has led to new legislation, lawsuits, or both.

We have quite a few tenant-protection laws on the books that are directly related to the inappropriate or ill-advised actions of just a few property owners. One such situation started with an owner who wanted to evict a resident for having what turned out to be an assistive animal in their apartment. The result is new legislation expanding the rights of residents to own emotional support animals.

There are many eviction protections and Just Cause Eviction laws in place because individual property owners took inappropriate actions. It doesn’t take long for the media to get wind of any situation that they can perceive as unethical, illegal, or immoral, and before we know it, all hell breaks loose, with ALL landlords looking bad, and our industry representatives scrambling to answer for the initial action.

There is a long and ever-growing list of unintended consequences that are the result of actions taken by property owners that could have been averted with a little legal advice. When we look at the expense of legislation enacted as a result of these unintended consequences, the $400 that should have been spent on legal consultation seems pretty darned minimal in hindsight. So my challenge to all of you is to recognize your own limits and to seek help in advance, to ask an attorney before making a consequential decision that could end up costing all of us in the long term.

The San Francisco Apartment Association is charged with the responsibility of providing legislative advocacy on behalf of its members, and education and support to help them properly, ethically, and legally manage and maintain their rental properties. What we have learned over the years is that educating our members, and providing the support and references they need to appropriately manage their properties, has been the most effective tool in providing advocacy and representation for our industry. We have learned that if our members manage their properties in an ethical and legal manner, the chances of new aggravating “correcting” legislation diminish—if we’re doing our jobs right, there’s nothing to fix.

So, SFAA is laser-focused on providing education, guidance, and information to our members. Through this we hope to minimize mistakes and avert the bad decisions that inevitably lead to extensive litigation and legislation, and the accompanying expenses, which include legal fees, time spent in hearings and meetings, and the extensive amount of time we spend dealing with a routinely adversarial media.

Every month at the SFAA Member Meeting, we provide tremendous educational opportunities for our members to learn the ins and outs of the San Francisco rental industry, appropriate tricks of the trade, legislative and regulatory restrictions that impact our business, and also, hopefully, how to be an ethical and fair landlord.

The legal forum held at the start of each meeting is another way that SFAA works to protect its members through appropriate legal advice and support. There isn’t a single meeting where I don’t learn something new, or where I’m given some new piece of information that I don’t go back and use to more effectively manage the properties for which I am responsible. This legal Q & A is extended in the monthly editions of SF Apartment Magazine, too, where highly qualified and respected attorneys answer questions from our members, helping all of us learn to manage our properties right.

So, while this month’s magazine is focused on legal issues and support, the advice and direction does not stop at the last page. The SFAA is out there providing legal support every day, through our classes, through regular postings on our website, through the Legal Q & A at our monthly meetings, and through the various topics and advice that are covered at the monthly meetings. We’re here to help, and my hope is that all of you are now maybe a little more willing to take the time to ensure that you’re doing it right!

For a calendar of upcoming meetings, click here. For handouts from previous meetings, visit www.sfaa.org/calendar. 

Eric Andresen is the current president of the SFAA, and he owns and operates both West Coast Property Management and West Coast Property Maintenance Company. He can be reached at eric@wcpm.com.