When big property managers give independent landlords a bad name
TurboTenant says property management companies and landlords aren't necessarily one and the same, and when a property manager fails to uphold the terms of a lease, the public often unfairly blames the landlord.
When big property managers give independent landlords a bad name
Updated
Scroll through the news, and you'll find no shortage of horror stories about landlords. But in three recent cases involving unlawfully withheld security deposits, a $692,000 wrongful eviction settlement, and chronic tenant neglect and harassment, the wrongdoing came from the property management companies hired to oversee the rental properties.
Property management companies and landlords aren't necessarily one and the same, TurboTenant notes. And when a property manager fails to uphold the terms of a lease, the public often unfairly blames the landlord.
Why is that? One reason is that many large corporations wear both hats: They manage properties and own them outright. So, they're called landlords. Some of the largest property management companies own tens of thousands of units and manage hundreds of thousands more. When these colossal companies misstep, they damage the reputation of small, independent landlords.
Landlords vs. Property Managers
The confusion between landlords and property managers is nothing new. Because the two terms are often used interchangeably, the public frowns upon small landlords who have little to no control over what property managers do to create news.
They do many of the same jobs, so the confusion is understandable. While landlords and property managers often handle similar tasks, such as screening tenants, creating leases, and coordinating maintenance, they are not identical. Landlords own the property and bear the financial risk, while property managers handle operations on their behalf.
Not all landlords operate the same way, either. Many outsource their day-to-day responsibilities to property management companies, while independent or "DIY" landlords handle everything without a middleman or a professional team to lean on.
When a third-party property manager ignores repair requests or mishandles evictions, the headline often blames the "landlord." That blame trickles down, leaving independent landlords to deal with mistrust, stricter regulations, and tenants who assume they're no different from large-scale operations that make the news for all the wrong reasons.
Blurred Lines
As a tenant, pinpointing who is responsible when things go wrong isn't easy. Is the landlord or the property manager to blame? Many renters don't have the time or inclination to point the finger, after all. They simply sign their lease, pay rent, and get on with their busy lives. And who can blame them?
In congested cities like New York, most tenants have no idea who owns their rental unit, so why would anybody else? As a result, "landlord" becomes a catch-all in headlines and social posts. It sticks because of reputation, and let's face it, drives far more clicks than "property management company."
As mentioned earlier, many large property management companies also own the buildings they manage. When they make headlines for mistreating tenants or cutting corners en masse, independent landlords get lumped in despite no wrongdoing on their end.
Many property management companies do stellar work, support landlords, and earn well-deserved praise. In fact, some landlords rely entirely on their property management companies to run the show. But when these companies drop the ball, and the blame rolls onto landlords, it seems fair that the blame gets distributed appropriately, at least from a public perception lens.
So, Who Owns What?
At this point, it's worth asking who owns what percentage of the rental property on the market. When the public lumps all rental issues together, they often ignore whether a corporation, small investor, hands-on DIY landlord, or someone else altogether owns the rental.
According to the Pew Research Center, roughly 72.5% of single-unit rental properties are owned by individuals, while 69.5% of properties with 25 or more units are owned by for-profit companies. Still, the headlines often target "landlords" when much of the newsworthy negligence occurs at the hands of large, faceless corporations. These aren't the same landlords as your next-door neighbor who owns the duplex you rent.
Public Sentiment
It's a familiar narrative online: tenants claiming their rent pays for a landlord's lavish lifestyle. But how true is that position? In most cases, landlords work hard to pay mortgages, maintenance fees, property taxes, and insurance premiums, often with little left over to do much else.
Most small-time landlords own one or two rentals, as shown in the Pew Research Center article, which is hardly enough to get rich. Their primary income often comes from a full-time job, a pension, or Social Security benefits. The rent they collect helps them build equity, but typically doesn't support a luxurious lifestyle.
Make no mistake, investment properties aren't a get-rich-quick scheme to fund a small-time landlord's next trip to the Maldives. More often than not, that rental is helping them save for retirement, put their kids through college, or build a safety net for their family's future.
So, with most apartments and multifamily buildings owned by large for-profit companies, negative headlines about housing issues often point to corporate property management failures, not your everyday landlord who is busy scheduling showings, coordinating repairs, and working their 9-to-5.
How Communication Breakdowns Further the Divide
When barriers exist between tenants and landlords, communication breaks down, and issues get lost in the shuffle. And, oftentimes, those barriers are the property management companies. The following story explains how a "miscommunication" led to an unjust eviction in 2022.
Two days before Thanksgiving, a Baltimore woman was evicted for being $300 short on rent, even though she had settled the balance hours earlier. Unsurprisingly, much of the public blamed "the landlord." However, the response to the backlash came not from the property owner but rather from the CEO of the property management company hired to run the building.
"It is a system entirely dependent on the good bookkeeping and goodwill of the property managers. All it takes is for one property manager to accept a payment without letting somebody on the ground know that that payment was received. That's all it takes for a tragedy to happen," said Lisa Sarro, a leader for a local affordable housing non-profit.
So, what's the best way for landlords and tenants to avoid nightmare scenarios like this? A clear, direct line of communication. When that line gets tangled, problems arise. While independent landlords often talk directly with tenants, property management companies add an extra layer that can unintentionally lead to life-altering mistakes.
What Does It All Mean?
Drawing more definitive lines between property owners and property managers starts with better communication, more transparency, and ensuring the right party is held accountable when something goes wrong.
As consumers, we need to read beyond the headlines. Not everyone involved in rental housing is a landlord. Not to mention, grouping all property managers, corporate owners, and independent landlords under one label leads to misplaced blame and tarnished reputations.
To help their cause, landlords should clearly convey their role to tenants. Are they actively managing the property or trusting a property management company? When everyone understands who's responsible for what, accountability improves and trust between renters and housing providers strengthens.
So next time you hear a story about an "evil landlord," ask yourself, who actually caused the problem in question? Was it the property owner, the management company, or someone else entirely? The more we scrutinize the narrative, the closer we get to the truth.
This story was produced by TurboTenant and reviewed and distributed by Stacker.
Originally published on turbotenant.com, part of the BLOX Digital Content Exchange.
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