Lessons from Eviction Court: The Importance of Vetting Your Employees

Posted by Stephen Marshall on

There's a lot of employee turnover in the rental industry. Leasing agents, assistant managers, and even property managers move around. A lot. When it happens unexpectedly at one of your properties, it can leave you in a serious bind. In those situations, every employer is tempted to lower their standards. They need help quick. So let's skip the background check. Let's skip checking their references. Let's just get them working so that all those tasks that are backing up get done. 

Here's the problem: those employees are going to be handling money. Tenant money and owner money. There's almost no way to avoid it. Even if you try to, at some point, they're going to be in the office when a tenant brings in a payment. What's worse, when you hire them, you "cloak them with authority", which is the law's way of saying you give them the ability to act on your behalf. So, if they are so inclined, they can go door to door and offer to collect rent from tenants. They can cut deals with tenants. They can do plenty of things that they are not really authorized to do by you.

One property owner learned that the hard way today in eviction court. Here's the video that I made right after court explaining what happened. I won't go into detail here, you can watch the video for that. But suffice it to say that, because an eviction court judge did a quick criminal background check on a landlord's employee during a court recess, it became pretty clear to the judge that the employee was stealing rent money from the owner. 

The lesson: vet your employees. I'm all for giving second chances to people and fully believe those who have made past mistakes can change. However, those are not the people to trust with tenant money. When hiring for a position that may involve handling tenant money, it's wise to take a look at criminal backgrounds. Recent convictions of significant crimes, especially drug use and theft, should not only be red flags, they should be stop signs. Otherwise, don't be surprised when you send a tenant a late rent notice and they tell you that your employee came to their apartment and picked up their payment. In cash.  

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