Articles

Author : Shaun Luyt

Why Running a Rental Business without Written Procedures is like Driving a Car Blindfolded 

Let’s set the scene . . .

You’re the Rental Manager and you get a call from a client with a complaint. You listen to what the client has to say and you then have a meeting with your team to get their side of the story.

It turns out that they ‘totally forgot’ a crucial step in a ‘standard’ process – something that they do regularly – and all of a sudden you have a problem because a ‘crucial’ action was omitted.

Maybe they were under time pressure, maybe they were stressed or maybe it was just plain, unaviodable (?) human error.

Whatever the reason, though, the buck stops with you . . .

Worst case scenario you (as the owner / principal) might be liable for the loss suffered by your landlord client.

Checklists help to avoid and minimise the risks associated with human error in your business

Think about it . . .

  • Would you stay on a plane if the pilot announced that he couldn’t find his ‘checklist’, but not to worry, he knows it off my heart?
  • Would you allow a surgeon to operate on you if he told you that in his rush to get to your surgery on time he forgot his checklist at home, but not to worry – he remembers it all

I know the above examples are based on possible life and death situations, but given the huge amount of legislation that potentially affects what the various team members of a rentals team deal with on a daily basis, what’s the chances that human error would creep in?

And that human error could either place you, your business or your landlord clients at risk . . .

The Legislative ‘Minefield’

At the outset, let me be clear – I fully understand that everyone is ‘special’ and wants to do things in their own ‘unique’ way, BUT one thing all rental agents have in common is that they are expected required to perform their duties in terms of their mandate with their landlord client AND within the ambit of legislation . . . .

And there sure is a plethora of legislation that rental agents and agencies need to understand, remember and ensure they adhere to – each and every day – whether you’re having a good day, a bad day or an ‘in between’ kind of day.

Here’s a list of some of the legislation a rental agent is expected to understand and apply consistently . . .

When rental agents are carrying out their daily tasks – and consistently being interrupted by phone calls, emails, etc – it’s really easy to forget exactly where you are and what you’re done, or to ensure that you’ve done absolutely everything that you need to do.

That’s where written procedures come in . . . .

Call them what you want – Standard Operating Procedures (SOPs), checklists, aide-memoire, to do list – it’s not the name that’s important, it’s the concept . . .

A list of ‘must do’ steps that need to be completed AND checked off for every ‘routine, task or activity

Let’s look at an example by way of explanation . . .

Example of a Routine Rental Procedure: Tenant Notice

You receive a letter of notice from a tenant and you need to ensure that the notice is valid.

To keep things simpler, let’s assume that the tenant is a natural person.

Here’s an example of the ‘mental checklist’ you need to run through . . .

  • Is the notice in writing?
    o  if NO:
    inform the tenants they need to please submit their notice in writing {have a pre-written template available
    for your team to use to ensure ALL the right information is communicated]
    0  if YES:
    Have all the signatories to the lease signed the notice?
    *  if NO:
    Respond to the tenants to inform them that all the signatories to the lease need to sign the notice
    for it to be valid (have a pre-written template available for your team to use to ensure ALL the
    right information is communicated)
    *   if YES:
    Is the lease fixed term?
    ** if YES:
    Is the end date either on the end date of the fixed term, or after?
    0  if YES:
    Email landlord to confirm and get written confirmation to acknowledge receipt and
    acceptance of the notice, as well as permission to market the property (have a pre-written
    template available for your team to use to ensure ALL the right information is communicated)
    0  if NO:
    Respond to tenants explaining that their notice is not valid in terms of their lease conditions,
    but can be accepted as early termination of their lease under the CPA, but reasonable cancellation
    penalty may apply, and ask them to confirm by return email that they wish to proceed on the basis
    (have a pre-written template available for your team to use to ensure ALL the right information is
    communicated)
  • if NO:
    Have they given the period of notice required in terms of your lease for a month-to-month lease?
    0  if YES:
    Email landlord to confirm and get written confirmation to acknowledge receipt and acceptance of the notice,
    as well as permission to market the property (have a pre-written template available for your team to use to
    to ensure ALL the right information is communicated)
    0  if NO:
    Respond to tenants explaining that their notice is not valid in terms of their lease conditions explain to them
    the earliest date they can terminate and ask them to confirm by return email that they wish to proceed on this
    basis (have a pre-written template available for your team to use to ensure ALL the right information is
    communicated)

Using the above ‘routine’ activity as an example, you’ll notice that there are a total of (at least) 9 ‘questions’ or decision points that the team member that received the notice, and needs to act on it, needs to run through in their mind.

(Please note that I haven’t even included decision points in the above ‘decision tree’ for the possibility of the tenant being a juristic entity, which would make this process even more complicated.)

Now add in all the other things that team member is busy juggling and that they need to do on that day, throw in all the email, telephone and walk-in interruptions, and ask yourself, what are the chances that they may forget a (crucial?) step when processing the notice in their head amidst the usual daily hustle and bustle of a rental agency and all of the other demands on their time?

it’s almost impossible to expect your team members not to slip up – without some form of ‘aid’
After all . . .
isn’t human error’ by it’s very definition ‘human’

And that’s where checklists come in . . .

Advantages of Implementing Checklists in Your Rental Business

  • clearly set out your expectations with respect to your service level standards
  • leave no margin for misunderstandings
  • documented ‘proof’ of compliance for easy reference when you have a query or complaint
  • helps identify ‘problem areas’ or areas where your team members may need additional training
  • enormously useful to train new team members
  • ensures compliance with legislation

a simple check list reduced complication rates in surgery by 35%, death rates by 47% and saved the health industry hundreds of millions of dollars – imagine what it could do for your rental business

An interesting You Tube video, worth watching:  The Importance & Value of the CHECK LIST

ALSO worth watching:  The Habit of Top Professionals: THE CHECKLIST MANIFESTO by Dr. Atul Gawande

I hope and trust you found this information useful.
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Contact:  Shaun Luyt
email:  shaun@shaunluyt.co.za