One of the articles I shared in this week’s Weekly Property Management News was a piece written by a property manager who had the unfortunate experience of being sued by a tenant. The good news for him story is that the judge ruled in his favor and he had some of his costs covered by the situation.

While a situation like his may seem obvious, there are certain things you need to make sure you do in order that you get the correct outcome. Just because something may seem clear on paper, that doesn’t mean you automatically will win a judgement in your favor.

Here is a summary of the above story: Potential tenant signs a lease with this property manager, having done a walk through and approving the state of the apartment. When the tenant goes to move in, she claims the unit is not habitable and sues the manager. The manager counter sues (for damages related to time lost on a vacant unit) and they go to small claims court – the judge rules in the favor of the manager.

So in the unfortunate event that you, as a property manager, are sued by a tenant or potential tenant (or anyone with respect to your business), here are some important steps to follow.

1. Keep a comprehensive paper trail. This is a step you should be taking regardless of whether you are being sued or not. Your paper evidence will often be your guiding salvation if something should go wrong. In the story above, the manager was saved because he had the signed lease with proof that the tenant had walked through and approved the state of the apartment.
2. Keep solid visual evidence of the state of your property. In the story above, it isn’t clear if the manager had taken photos prior to being sued (though he did have photos proving his side of the story) – but if you have visual documentation of the state of your property, then someone can’t come in and claim otherwise.
3. If applicable, definitely file your own suit. In this case the property manager is losing income due to a vacant apartment and having to go through the process of filling that vacancy again.
4. Go to the small claims court at the date and time arranged. If your situation seems like a slam dunk you may be tempted to just let it go or send someone else. Just because you may be completely in the right (with proven signed lease in the above situation), that doesn’t mean you automatically win.
5. Finally, remain calm and respect the court. You will notice in the above story that the property manager had to listen to the tenant give her full story to the judge – undoubtedly this can be infuriating, but if you try to interrupt you can cause your own demise. If you have the signed and visual proof, then have no worries.

Ultimately this is a straight forward process, but one which relies on you having smart systems in place. Make sure your lease contracts are in order and cover all circumstances. Make sure you keep full updated documentation on the state of your property. Every now and then you will get a bad apple – if you have your ducks in a row, then everything will fall into place for you.