A Podcast | Monica Gilroy

Pete Neubig: [00:00:05] Welcome back, everybody. And as promised, I have my the Northam legal savant, Monica Gilroy. Monica, so thank you so much for, uh, for joining us. So, so first, just tell us quickly a little bit about you gave a bio, but tell us just a little bit about what you're doing right now and then how your relationship with Northam is as well, because I know you're kind of you kind of you have a partnership with Northam, correct?

 

Monica Gilroy: [00:00:30] Yes, absolutely. And listen, thank you, Pete. I really appreciate the opportunity to come on talk to all of my friends who truly, we all know are like one big family. Um, yeah. As you read, I'm an attorney here in Atlanta. My practice, however, is national. I have represented property management companies of all sizes across the country for many years. But again, I'm a trial attorney by nature, Pete, So, you know, I'm the one you call when there's a problem. There used to be a joke. You didn't want to know me. But the idea with Northam is that it's good to know me because I'm here to help you in your business, to make it better, to troubleshoot, to prevent problems. In any event, something bad does happen. You're hit with a fair housing complaint or litigation. I'm here to help you in that regard as well. I am very honored to be the general counsel for the Atlanta chapter, as well as work as well on the national level with providing legal advice.

 

Pete Neubig: [00:01:24] And we're very lucky to have someone, someone like you, on our on our team. You know, there's there's so many resident groups out there, but there's not a lot of property management advocates out there. So it's nice to have, you know, an advocate like yourself on the team.

 

Monica Gilroy: [00:01:43] Appreciate it. I love the industry.

 

Pete Neubig: [00:01:45] Let's talk about some let's talk about the three hot legal challenges out there. So we were talking in the green room and said, hey, what are the like the three biggest, you know, challenges that you see all the time? So let's kind of go through them. So, um, you hit on fair housing. So let's talk about fair housing first, right? So fair housing, we're all scared as big, bad, ugly animal called fair housing. So what are you seeing out there? How do we prevent it? What are some of the best practices?

 

Monica Gilroy: [00:02:14] Absolutely. And yes, fair housing is still really the number one area where property managers need to look out. It's really not a matter of if. It's usually just when. Right. Um, you know, the the Department of Housing and Urban Development is still very, very active, right? Sometimes people will say to me, Oh, when we have different administrations, does it make a difference? Not really. They're always busy, but changes is just what their focus, what's important to them. As we know in our industry, still one of the number one or the number one type of claim folks will get is involving disability as it relates to emotional support animals or service animals. And I often, when I speak refer everyone, refer everyone to that very wonderful directive that was released by HUD. Back now about maybe three years ago that really laid out almost in the form of like a find your own adventure. How do you know what to do when someone says, Hey, I have an emotional support animal or I have a service animal and you're able to walk through the steps to determine what do you do? Um, one of the biggest things, I think, Pete, is that you've got to be sure to prevent fair housing, that every single person in your organization all the way down to your virtual assistants, if you have them, or even the people that are answering the phone. If that's a virtual person, even if it's your your kid on summer break, you know, they need to understand if they're asked, if they ask a question. And somewhere in the notes it says No pets allowed. How to handle someone who says, well, don't have a pet. I have an emotional support animal or a service animal. That's probably the number one thing I think we need to do.

 

Pete Neubig: [00:04:04] Sorry we lost you there. Yeah, for a second.

 

Monica Gilroy: [00:04:07] So how far did I get?

 

Pete Neubig: [00:04:09] Oh, we got to emotional support, animal. So even if your kids from coming from school.

 

Monica Gilroy: [00:04:16] Okay, so we'll just do it. Three, two, one. So if there is anyone working in your office who's answering the phone, they need to know what to do. If someone says, um, you know, in a, in a in a house or in a residence where it might be listed by the owners. No pets. How to respond to that? If someone says, Oh, don't have a pet, I have an emotional support animal or a service animal. So training is a big part of preventing those fair housing claims.

 

Pete Neubig: [00:04:43] So just a shameless plug here. Vpn Solutions just put out a fair housing course for your virtual assistants or for anybody that's that is part of your company that can take at least some fair housing coursework. Now. With fair housing. One of the challenges that I that I've seen is like the local housing. Like has one rule, but then federal has another rule. Which one do we go by? What would tell us?

 

Monica Gilroy: [00:05:14] That's a great question. You have to abide by both. But in the states that like especially.

 

Pete Neubig: [00:05:20] Like literally talking about doing the exact opposite.

 

Monica Gilroy: [00:05:23] I'm just going to say that. And that becomes a real challenge, right? There's areas on the West Coast, right, that you're like, wait a minute, what am I supposed to do? You know, we see this a lot when it comes to additional protected classes, right? In some areas of the country, it's considered source of income, which in essence means you can't discriminate against someone who has a veteran status if their funds are coming from the VA. I'm teaching a class once and someone raised their hand and they said, wait a minute, why is someone intentionally discriminating against a veteran? And that's sort of I don't think people are, but that's the concern that's out there. I think, though, to your question, you've got to be sure that your policies are are dealing with both and can address both, right. On the national level, when we really look at what are the biggest areas, again, it goes back to disability and then it goes into familial status, right? Which is that idea of what is a family, right? What is a family to me is not the same as a family to you. And the fair housing laws make that very clear. Now, we often see that bump up, like you said, with the local rules, not even necessarily from the local or the statewide or the local fair housing offices. We even see this sometimes in the city ordinances like how many people can be in a house. Right. The best advice I can give is you just need to always ensure you're compliant first and foremost with your state or local municipality.

 

Monica Gilroy: [00:06:42] Then you have to be sure you have that eye on the federal level as well. Most states or cities that have their own fair housing department, which is very common on the West Coast, very common in parts of New Jersey, New York, um, not really up the whole Eastern seaboard, but in those Philadelphia, Philly, Pennsylvania, you want to be sure you are, though in those areas really cognizant of what those those local rules are because those are going to be the front line people. They're going to be much more interested in seeing the implementation and enforcement of those local rules secondarily to the federal rules. But you're right, it's a real challenge, which is why that's great that there's a class. We can never get enough training on this topic because it's ever changing and we can really learn best from looking at the other people who have gotten into trouble. I've told people, If you ever want to fall asleep at night, maybe give yourself nightmares. Go to the HUD enforcement side on fair housing. And it tells you all the recent things that people have gotten in trouble for to see if you're doing any of those yourself. And obviously if you are don't. But, you know, it's just it's really important to just stay constantly abreast of the ever changing fair housing environment. It's really the number one thing you can do to avoid liability.

 

Pete Neubig: [00:07:51] So I'll just kind of summarize. First thing is. Uh, try to if something if the city versus federal or city versus state are telling you two different things. Go to the lowest common denominator, basically the city, and make sure that you follow those rules. They trump federal in most.

 

Monica Gilroy: [00:08:12] Yeah, they don't necessarily Trump but think you'll have your first the first person you're going to be answering to will be your local or state person, right? Right there in theory, supposed to be dealing under that federal umbrella. But there are many states where we have we're going to have listeners where they don't have like in Georgia, we don't have that equal opportunity Commission anymore, that Fair Housing Commission we used to have. So everything, for example, in Georgia is straight from from the feds. Right. But yes, so you're you're right. Start with your municipality and then just work your way up from there.

 

Pete Neubig: [00:08:46] So start the municipality. Second is get as much training as possible and train everybody in your organization. Right. Even your remote team members, which a lot of people forget about because sometimes most of the time those are the ones answering the phones. Correct. And then you kind of hit it is a is a big one. And I know I've beat that one to death. I've had pet screening on here a couple of times. What is it? And so then you hit another one. So and animals is probably number one. And then number two would be familial status in your in your.

 

Monica Gilroy: [00:09:15] I think when you look when you look at the type of claims that are out there. Yeah. I mean disability by a mile right it all all involving the pets and you're right.

 

Pete Neubig: [00:09:23] We have that for like 20 years now right Oh my.

 

Monica Gilroy: [00:09:25] Gosh. The pet thing. If you all know by now, if you haven't seen my slide by now, that says that you're not a pet. Right. An emotional support animal is not a pet. You need to pan that out. But yeah, the second the two and three, three sometimes varies. But two of recent would say the last decade has been familial status. Right. We're of course, I have the infamous case here in Atlanta where someone listed the condo as no children under 18. And obviously, you cannot do that unless you're in like a you know, specifically an older type. Right, documented 55 or older. And that case was a real bad one. I mean, a lot of monetary fines, you know, Channel two chasing people down their driveways. You don't want Channel two shanks chasing you down your driveway. You don't want to be there. But it's the concept of turning people away because maybe their family isn't exactly what you know. And it's really not usually the property manager. It's the owner. Right? And this comes in a lot when the owner may say, I don't want any gay couples, I don't want any lesbian couples, I don't want any transgender couples. We can't do that. You can't do that. As we know, under both the federal law, but also under our code of ethics. But that's, again, where that definition of family you'd get hit if you denied it. You know, two dads in their daughter, even if because the owner is because they don't want to have a gay couple there, that's still familial status.

 

Pete Neubig: [00:10:49] And so you would say that the majority of this is when we're leasing properties is the majority of the times where we can get hit with fair housing. That doesn't mean it's the only place. That's right. Making sure that you that you you you advertise correctly within the guidelines. You answer the phone within the guidelines, and that you have a policy and a process that you do all the time, no matter who's calling or who's who's reaching out, is going to help prevent any any claims against you.

 

Monica Gilroy: [00:11:19] That's right. And I think what you just said a minute ago is the third topic. And the third topic that we see of violations is goes in between sex meaning, meaning gender and race. And that oftentimes can come up during the tenancy. Right now, yes, the majority of fair housing claims are at the time of application, but there has been a vast number of claims that have come up because of how someone is treated by property management staff. This is very true. If you have an in-house maintenance company. There's been a number of claims made by women who have believed they are being sexually harassed by members of the property management organization. Same with, same with race, where we've seen individuals claim that, you know, repairs or maintenance is being done slower because of their race. And so you do still see those two kind of neck and neck as number three. But those are things that can come up during the middle of it. So it's just so important to constantly be always especially as an owner on top of what's happening in your company, and also being sure internally that you have an escalation process when complaints aren't coming in. Probably that you know that in training with fair housing, knowing when to escalate, when someone, one of your people have this problem are really probably two of the biggest ways you can prevent it from getting out of hand.

 

Pete Neubig: [00:12:36] So another takeaway that I had is, you know, you kind of hit on this. Do not let the owners make the choice. Right. So for those of you who say, well, the owner can make the choice, you know, I've always said our job is to is to have qualifications around what we what we will and will not take. And they have to be kind of, you know, based on federal fair, you know, federal fair housing. And then we make the decision based on our guidelines because we are still we still have a our fiduciary responsibility to the owner because they're they're based based within the guidelines of the property.

 

Monica Gilroy: [00:13:11] Yeah. Mean two. Yeah. Two big takeaways there. Obviously everyone knows I'm a huge proponent of property managers being in charge of everything because you're the professional. If we're ever in court at the end of the day, which hopefully we aren't, yes, I'm going to take good care of you. But judges routinely will look down, not at the owner, but at the property manager and say, you know, ma'am, sir, you're the you're the professional in the room. You were there to give guidance. And and then secondarily, just that idea of, Yes, being sure that your any of your guidelines, whether it relates to onboarding or how you address maintenance calls, is absolutely neutral. Right. Again, we usually use the example of onboarding as your criteria should be based on things that are facially neutral. Numbers don't lie. Right. Look at their credit score. Look, if they have a history of eviction.

 

Pete Neubig: [00:14:02] You know how much they make.

 

Monica Gilroy: [00:14:04] Look at how much they make, right? Things that basically won't matter what the color of their skin is, their gender, their national origin. None of the defining factors, none of that comes into any of that. I'll put a little side note onto that and say, but for that very hurt your brain concept of disparate impact that we've talked about since Covid. That's probably another topic for another day. We won't go too deep there, but. And based overall, right? The more neutral you are looking at your qualifications and in your policies will prevent you from from losing in a fair housing case. Because the reality is we're still in America. And we're going to talk in a minute about people suing, even if it's wrong. But we have the right to sue, meaning we have the right to defend. So, you know, you can't you got to be able to assume that you can always prevent mean I'm sorry, prevent your fair housing. But also if you get one, how can you defend it? And your best line of defense is always going to be showing, look, here's how I always do it. This individual who's claiming this problem is it wasn't treated any differently.

 

Pete Neubig: [00:15:01] The policy and the process. Yeah. And one thing, I've been sued a handful of times when I own my property management firm. And the interesting thing is, you know, when you try to do something nice for somebody, like no good deed goes unpunished. And I've always been sued by the resident first. And then when I'm fighting it, the the damn owner joins in and he ends up suing me on the other side. So so you have to be careful. And that's why you don't want to have your owners in, you know, your your owner clients, strong arming you and telling you how to run your business. This is why we're at Narbonne. We're so adamant about you run your business. And if an owner is pushing you to do something that is not correct, you need to get rid of that owner. All right. So we'll talk about kind of the the process, what you should have after we hit kind of the other two. So so the next hot legal challenge. Let's talk about squatters. Um, a lot of people are doing these self showings. I actually have a lot of people now saying they will not do self showings because of squatters. So tell us a little bit about what these people actually have rights like. Break this down for me because Yeah.

 

Monica Gilroy: [00:16:12] Yeah, it is. It is probably the number one topic of the summer. Right? And even going into the spring and we're seeing it all across the country, even in states where you wouldn't think that it normally would happen. So this is not happening in your backyard. You are not alone. Um, the concept of someone being called a squatter, right? In every state, there isn't really any such thing as a squatter. We use that term sort of loosely to describe somebody who has, you know, come into a piece of property and just sits there. Right. But the real term for them is a trespasser, right? In virtually every state across our platform. Right. They are trespassing. The current scheme that's occurring across the country is pretty similar. It's one of two ways they're getting into the property. One, you're right, is through the self showing. The second way is even more nefarious. They're literally seeing Mr. Property Manager list one, two, three. Main Street for rent. We're catching them on ring cameras going in in the middle of the night, breaking through back doors, you know, getting in and then early in the morning doing whatever. It's usually it's usually two parties involved. There's usually the person who has broken in and then the person that they con into going into the property. Sometimes it's the same person, but usually because it makes it harder to deal with the authorities, it's the bad guy breaks through the back door, comes in, then meets, you know, Ms.. Sue on the street the next morning and leases her the property for a cash payment. They then disappear. You're then faced with how do you get Ms.. Sue out of the property? And that's where across the country we're seeing different tips and tricks and some, frankly, complete failures of our of our system to not help us get people out as fast as they could.

 

Pete Neubig: [00:17:56] Yeah, I know. In 2020, one of the big things that that we started doing was watermarking all of the photos because the scammers were taking photos from the property manager company, put them in on Craigslist, leasing it, you know, for $1,000 less than what the what the market and people fall for this all the time. And you know I've I've seen like we've literally had moving trucks coming in while we're leasing the property like what are you doing here? Like, oh, we leased the property like, I'm sorry, you ma'am, you got you got scammed. And I feel bad for those for those folks.

 

Monica Gilroy: [00:18:28] But absolutely. Yeah. No, and that's and that's sort of the problem is that, you know, we've had to we've had to almost resort of recent to almost like homegrown efforts. Right. I spent some time a couple of weeks ago with some clients and they were talking about just little things they're doing, like getting laminated signs, almost like you'd see in a hotel that they're putting in the kitchen that basically say this property is managed by ABC property management. You should only be getting communications from this person at this email, this phone number. If you are not, call us immediately. Right. The ring camera was another client I had who went through a series of these to the point where the the fastest thing that he was doing was having those ring cameras placed so that literally when they heard the chime go off right at two in the morning, they were able to either get down them themselves or get the police there fast enough. The police could see that it's actually a trespasser. The problem we're facing, though, across the country is twofold. One police, sheriffs, municipality officers are coming in and misunderstanding the situation and will say oftentimes this is a civil matter. It's not friends, a civil matter. Right. This is not a tenant who has a potential right to be there fighting with their landlord. This is someone who is a stranger to this property, a trespasser who has come in. Don't care that this third party victim. Right. Is the person that's there.

 

Monica Gilroy: [00:19:57] They're still a trespasser. Our municipalities, our police, our sheriffs, they're not learned enough about our industry. I mean, let's face it, that's probably the number one challenge we face as an industry, is people just it's so finite. And what it and it's so unique. People don't understand it. So I've been seeing it across the country, efforts to try to educate the city council, the police force, anything to try to get them to understand, look, please help us. This is you know, Mr. Owner, this is his property being, you know, basically just criminalized by this individual. You have to help us out. We couple that with across the nation just the incredible delays and backlogs we're seeing across all the eviction courts, because oftentimes folks are being forced to file evictions to get them out. Be sure as a tip, you know, obviously consulting with your local attorney, but or your local eviction counsel to ensure you're including not just, you know, the name of of a person who might be there, but if you say John Doe, be sure you say something like an all other occupants and residents because you want to get to court and be able to be like, I have no idea who that lady is, but I know she's in there. You don't want that to stop you. At the end of the day. The other self-help thing a lot of people are doing is looking at their criminal trespass statutes. Here in Georgia, we have a statute that we're trying to beef up a little bit to see if that will help us.

 

Monica Gilroy: [00:21:16] But at the end of the day, you are very much at the mercy of whoever responds to that call. And that's why these self-help things like the cameras, the notices, I've had some people go in with cash for keys offers immediately to these people and just say, look, you know, you know, I'll give you a thousand bucks to get out. You actually may spend less money at the end of the day. The last thing I'll say and then and then, you know, we can we can keep going is it's really important to to always remember when you're talking to the police or talking to your your local officials to remind them that this isn't in the interest of you, the PM, this is your owner, right? Our owners are our true victims here. How many owners do all of our people listening here have who might be retirees? People where this is all of their income tied up in these houses, People who are having to pay mortgages while their property is not being rented for the amounts that they have. Those are the true victims. Those are the people who are not being protected. Ultimately, when these squatters come in. And that's the message we always have to get across, not like, oh, it's me and I need my money. No, no. Our owners, who we represent, they are the ones being truly harmed by these criminal activities.

 

Pete Neubig: [00:22:22] I would say one thing, too, is here in Houston, in Texas, we have constables and get to know your constables.

 

Monica Gilroy: [00:22:30] Right. Yes, absolutely.

 

Pete Neubig: [00:22:32] Get to know. Absolutely. Because they will do a drive by and you can educate them and, you know, talk to them and and give them real estate advice. Whatever you got to do to to get to get you know, that is.

 

Monica Gilroy: [00:22:42] Perfect advice and you know and say all the time you know like like when we go to Washington to advocate you know, we have to be the voice for our industry. And so, yeah, you've got to get it out there and explain again, look to your local laws. But just these self-help things that people can do to help prevent it. You know, I do know I have had a number of conversations with the self showing folks they are very concerned about this. They, too, are taking great strides to be sure that they are not you know, that they are helping everyone in this industry to prevent that, because we know that there's a lot of good that can come from that. It's just that when we factor in these bad players, it's just it's very frustrating because it's it's just we have so much already that we face every day. We don't need these jokesters to.

 

Pete Neubig: [00:23:23] You gave me a good idea to get get a couple of those guys on on the podcast and talk about this more.

 

Monica Gilroy: [00:23:29] Yeah there I've had numerous conversations. They're very committed to this because they know that and they know that technology constantly changes, right? I mean, like you said, the water marking back a few years ago, everything is so sophisticated with how people, you know, can scam their way into properties.

 

Pete Neubig: [00:23:43] Yeah. So so just to just to kind of put a bow on this, they're not squatters, they're trespassers. It's not a civil matter. It is a criminal matter. Uh, try to do what you can to prevent people from squatting or trespassing in your in your place, which is a ring camera notifications everywhere, watermarking, um, you know, things of that nature. And, and then get to know your, your constable and try to educate your your constables that you're not you're not a big corporation here. It's somebody you know, it could be somebody you know, you know, full investment and so. Exactly. Yeah. Awesome. And then, um, but what so should we have a what's the first thing we should do when we see that though like contact the constable and then like, do we have to get an attorney involved at that point or is it.

 

Monica Gilroy: [00:24:35] No, no, no. This is where the power of your citizenship, the first call is to the policing authority, your constable, your your city police, your sheriff, because even if they come out there. Right. And they for some reason, let the trespassers stay. Right. You have major police report. This is also important for your owner, because what if that individual, that trespasser, while they're in there, destroys the interior? Yeah. Damages all the time. That's right. And that is a real covered event under homeowners insurance. Right. When someone comes in and vandalizes your home. And so that might be the saving grace for like your investor owner, you know, some little individual person or even if they can't get rent for that period of time, they may be able to file a claim for.

 

Pete Neubig: [00:25:18] That under vandalism. Would that be vandalism?

 

Monica Gilroy: [00:25:20] It's like vandalism. Exactly. Because it's no different than if I broke into your house and started, you know, doing things and then left with your oven. You know, I mean, it's no different than that. But yes, your first call should always be to the authorities. And obviously I urge caution with safety first, you have to assume that these people could be dangerous, could be armed. That's why it is always appropriate to go to the police first and at least have that initial knock on the door, be, you know, be with a safety officer to be sure that your safety and that of your staff is not compromised. One more little tip on that. I had a client who was going who was sending out just junior people. This is not where you send out junior people. This is where you go. Your senior people go or you, you know, even bring with you somebody who, you know, would be protective if there was a situation. Safety always first with yourself and your staff.

 

Pete Neubig: [00:26:10] Okay. So call the police on the insurance thing. You make sure that your your investors have the right insurance because a lot of these folks will live in the house and they move out and they don't change their insurance from their regular homeowner insurance to the, you know, to to the investor home insurance. And then typically vandalism is typically an extra rider. And so they they should have that because I got caught up on that one. I didn't have the vandalism and it cost me thousands and thousands of dollars. So just a couple of tips there. When you're talking to your your your owner clients. Yeah. So the last one is near and dear to my heart. And I made you talk about this one. I know mold is not everywhere in the country. So if you're like in Minnesota or you or Alaska, you probably don't have much mold Here in Houston, it grows everywhere. And I personally, I'm pretty I'm an open book. I've I've bought Empire was sued, I think three times for mold. Right. So so this is near and dear to my heart here. So let's go through this. Okay. Um, mold, by the way, is is not insurable so you don't get actually sued for. Mold. What I got sued for is basically saying we were negligent. Right. So take so take us through this, because there are there are residents. So you can see I'm getting fired up. I will let you talk. There are residents that literally go house to house, to house and claim mold. And it's kind of like their way of business, like they literally have a business on this. They're just nefarious folks. So. All right. So let's talk a little bit about mold.

 

Monica Gilroy: [00:27:49] Sure. Absolutely. Yeah. And and I get you and I feel you here in Georgia. We have a law firm that are called the mold attorneys. No lie. And that's what they do. They find people who want to claim mold. So if we go back, we know the first thing about mold is, oh, the mold.

 

Pete Neubig: [00:28:04] Attorneys are for the residents, huh?

 

Monica Gilroy: [00:28:06] Yes, they represent the residents. I know, right? It's like they're like ambulance chasers for for mold. It's what makes the lawyers get the jokes right. It's bad. So, yeah, they're called the mold attorney. They are there to help you as a tenant who's been affected by mold. So, yeah, you know, obviously as property managers, our first response always has to be it's not mold mildew, right? That we can't immediately concede that it's mold. But mold is something that we find across the country probably as the number one source of litigation outside, of course, of stuff like, you know, stealing money, which you're all going to. That's no one's going to do that here. But yes, with mold, it's your it's your reaction that sets the tone, Right. Mold claims become bad for property managers when we don't take them seriously and act appropriately. So again, as is the rest of the kind of in any ways to avoid liability, have a response mechanism. Ensure no tenant complaints. I have mold in the bathroom. This should not wait. Right. Send somebody out. Right. If they're saying I have a two month old baby and it's coughing up blood and there's mold, maybe go a little quicker, right? Read the room.

 

Monica Gilroy: [00:29:15] Right. Know what's happening. Right. But get someone out there to take a look. Do your own potential, either testing or even just remediation. Right. You should be able to look and say, okay, what's that? If based upon your own internal criteria, people should be removed from the property, right, then that is something that you just need to do. I often will hear, Oh, my owners are so cheap they don't want to put them into a hotel. Why we fix this or whatever? Look, it is far cheaper to put somebody into the Holiday Inn for a few days and to hire a lawyer to have to fight with all of this. Because you're right, not all of this is necessarily covered by insurance. The other times people get sued is not just under a negligence theory. It'll be breach of contract. Right. The tenant will say, You didn't give me the quality of the house you promised me in my lease. Right. But with mold, your reaction is the best determiner. Treat it seriously. Listen to them seriously and assume that it could be. Yes. Mold that requires remediation and action. Don't brush it under the rug or take a look and say That's not us.

 

Pete Neubig: [00:30:18] Here's one of my biggest challenges, right? They claim mold. Right? And we you know, I think as a property manager, the first thing you can do is like, let them out of it. Like, hey, you can get out of your lease, we'll give you back a security deposit. We'll even give you some money. Right. And of course, they don't want that, right? Say they never take they so they don't take that option. So I have one person take the option once I release the house. And I never heard about mold, ever. Right. So I feel these people are literally trying to create a you know, once they claim mold. 99% of the time they are trying to create a case against you so they can sue you. And here's the deal. Um, it's going to cost you 60 to $80,000 to fight any kind of of claim, especially if you don't have the insurance for it. And your insurance company, when you do have insurance, they know it's going to take 60 to 80 grand to fight this thing. And so what do they want to do? They want to they want to just plead it out. And so these people are looking for quick money grabs, Right?

 

Monica Gilroy: [00:31:24] So, yeah. Good. Right.

 

Pete Neubig: [00:31:26] So. What do I need to do to make sure? So you said, okay, let's act really quick. So go get a do I go send my maintenance guys first or do I send a mold special? Like, what would you tell what do you tell your clients? Like, you know, hey, if I'm running a mold, Monica, what do I do? Like and I know you're not a mold specialist. I get that. But like, No, no, I get it.

 

Monica Gilroy: [00:31:46] I know when mold became the hot topic many, many years ago, I actually had way too many cases in it for both individuals. And property managers have about three actually going right now. But yeah, send your send your regular repair people out first, then your maintenance folks out first. Let them photograph it, bring it back to you. Right. You're going to know pretty quickly what you're dealing with. For example, I had a case many years ago where the tenant started complaining of having problems when we came in to look, there had been a huge leak under the washing machine that obviously we hadn't we hadn't found, nor was reported. And we'll talk about that in a minute, because the lack of reporting is critical when it comes to defending a mold case. But just what you said is the perfect thing to do. If it looks like this is going to be a serious situation or something that's going to require a lot of displacement. Right, for the tenant? Absolutely. What you just said is best offer to terminate the lease. Right. Then give them their security deposit back, pat them on their back and send them on their way. Some will take that. But then you have others who are going to say, oh, no, I want to stay here.

 

Monica Gilroy: [00:32:55] That is when one of Monica's number one rules comes in, which is documentation. Right. Dear Ms.. Tenant, this will confirm that you told me on May 3rd after I told you you needed to move because of mold, that you wanted to stay in the property with all of your things. Hugs and kisses. Property manager Right. Because someone's staying, once they've complained, shifts the legal burden over to them. Then as to why are you like like think about if it was our family, why would we choose to stay and put ourselves at harm's risk? Right. So that's a huge thing. If somebody wants if somebody somebody won't leave. I have many clients who have early termination clauses they can invoke as the PM and with that many times they will invoke that just to try to even further lessen the amount of exposure these folks have. That is a very big legal defense, though, to say, look, you know, Susie, the tenant, wanted to stay after she was complaining about, you know, coughing. And well, the second thing, which is our big defense, which I have in all the cases that are.

 

Pete Neubig: [00:33:57] Real quick, so so make sure if you listen to this, that it's not a property manager from their email doing it. Because if that property manager leaves a year or two down the road and you have to find that email, do it in a support ticket. So if you have a main support ticket, create everything in one place to easily find it. When I got sued, I got sued two years later and I had to go find stuff and it was impossible. And so it's a nightmare.

 

Monica Gilroy: [00:34:23] Yeah, it's a nightmare. But yeah, that's the best advice you can get. Yeah. Do it all within your your system that you're using because then when it happens, you're able to just stay up to the lawyer. Your lawyer? Hey, I have everything. Here's where I told her. Look, you know, if you stay that, you know, that's going to be a bad thing. Because remember, with mold, if it truly is mold, right. If it's truly the stachybotrys, the black, the bad black mold that causes the problems. Right. When you do remediation, the spores go all into the air. So that is why not jokingly they put the white coverings over everything and they take things out and wear protective coverings because you're breathing it in. So if someone is staying during remediation, they are choosing to expose themselves to a very toxic event. The second best line of defense in a mold case without question, though, is when did they report it? And I have a case going right now where attached to these people's complaints. Right. Is it 125 page I don't even know what we would call it, just like horror show of photos and problems and all this stuff gets the first time was when we saw that horror show book at the time of the lawsuit. Right. So the old axiom like for parents. Right, is I can't or even as bosses, I can't fix that, which I know is not broken. If I don't know there's mold, I can't fix it. I can't address it. And the courts will see that as an absolute defense to. If you never reported this, how how are we supposed to know it's here? So having your having very good like you just said, reports of maintenance calls. Right to show specifically what was said and what was done is a lifesaver. It'll like it'll win the case. And this one situation with this big booklet, it'll win the case because we knew nothing. And when we did find out, we acted. And that makes all the.

 

Pete Neubig: [00:36:12] So main thing is don't if somebody says the M word in your in your business, you change it to mildew. Fine. But if you have virtual assistants running your maintenance coordination, which many of us do, and somebody puts in that mold word, that should be a trigger and your policy should say that goes to level two and it goes to your property manager and the property manager who's not handling all these maintenance requests should own that maintenance request or maintenance supervisor, whatever. Whatever your level is, it shouldn't be that's handling all the maintenance requests, right? So for example, at Empire we had 200 plus maintenance requests a month. Okay? That my team could not handle the high escalated ones correctly. And this was a mistake that when I look back, I made this mistake. So do as I say, not as I do. If you're listening to this, that should get escalated and the person handling that should only be handling a handful of escalated work orders. And they're the ones that make sure it gets completely documented.

 

Monica Gilroy: [00:37:12] Yeah. Yeah, absolutely. And that that again, not unlike documentation but escalation. Absolutely the way to prevent and limit liability because the quicker you respond. Right. And what your response is again like I said, that sets the tone for the whole thing. The other thing we forget sometimes is you've got to let your owners know what's going on, regardless of your management model, whether it's owner, landlord or landlord. You have got to if in fact you determine it is something that is going to cause potential liability, let your owner know right away with this one caveat. Let them know that you have an internal policy as to do you allow them to then take over the repairs and the maintenance or do you keep your finger on it? Have Well, actually, the same case, the case that the big policy manual right there, the owner stepped in and did some repairs that we were not aware of. And that, you know, is another complaint that these tenants had was, look, you know, this owner didn't do the repairs properly. Now, in most of your pmas, you probably have limiting language that says if an owner decides to do some maintenance, we're not responsible. Probably up holdable probably something that the court will permit. But just again, you're the professional in the room and your reaction makes such a difference.

 

Pete Neubig: [00:38:25] I'm not a.

 

Monica Gilroy: [00:38:26] Big.

 

Pete Neubig: [00:38:27] Yeah, I'm not a big fan of the owner taking it over because when you when you get sued, it's you, not the owner or both. And you get put in that and you have no control.

 

Monica Gilroy: [00:38:36] So don't don't like letting the owners do anything. Honestly, I just feel like I feel like in our society it is better to try to keep as much control as possible. And then if you have situations too, because we've had that where an owner refuses to do the right thing. That was one of the other mold cases. We had one with the washing machine. We fired the owner and we said, Look, this is going to lead to bad stuff. We fired that owner and then the owner got mad later and he sued us. But we won, showing that what we had done was was correct.

 

Pete Neubig: [00:39:02] Yeah, Yeah. I'd much rather deal with that case than than the old case. So is there is is there some type of insurance that you would recommend that the property management company have to make sure like they can be that this case could be defended by the insurance company? Because the last thing you want out there is I got hit with $1 million lawsuit. I didn't have any insurance. Like it was very stressful. Yeah, it's very scary and stressful. So how do I have that security blanket with when I get this this deal? Right? I'm going to reach out to you and we're going to talk like, how does that process look like to make sure that the insurance is going to defend?

 

Monica Gilroy: [00:39:40] That's a great that's a great question. The first thing you're going to want to do is always start with the owner's insurance. Right. And you want to make it clear that you are you are bringing this claim pursuant to the property management agreement where the owner says his insurance is going to cover you in the event of this type of lawsuit. Now, your point is correct. There are many insurance policies across the country for homeowners that won't cover mold, but they may cover. But how about this? But they may cover internal water intrusion, right? We know that usually nothing but flood insurance protects you from water coming from outside in. But if it's something inside that may be covered under internal water leak such that the ultimate mold needs water to live, that's food. So that's one way to do it. However, I also recommend folks placing their own errors and omission insurance on notice as well, especially if obviously when it goes to a lawsuit with the stage of a lawsuit, you've got to let your insurance companies know in a timely fashion. You've got to let them know what's going on, because you can't always know for sure whether the owner's policy is going to actually cover you. Some do, some don't. But again, usually our company, our thing policies, yeah, they'll cover negligence, but they're not going to have a specific discovers negligence due to mold. And then usually what we find is there's also a breach of contract claim. And here's the thing. Sometimes breach of contract claims are covered by your insurance where a lawyer is hired, but they don't cover any judgment that comes out of that. So. The problem with our insurance policies in general. And I remember Eric Wetherington, something about insurance a long time ago, but you know, you really have to just read your policies carefully and kind of like getting to know your constable, get to know your insurance folks, because there are, you know, products out there that might further give you protection, but always try to double stack the owners and then yours as well.

 

Pete Neubig: [00:41:32] Yeah, I think that you should you know, you should hire an attorney first to make sure that I got all my documentation correct. Then I talk to my insurance broker, if you would, to make sure that he wordsmith it so that we then would send it to the insurance company.

 

Monica Gilroy: [00:41:48] Yeah. And that's. I do that all the time. Yes. And that's a very that is one time when having counsel help you is definitely worthwhile.

 

Pete Neubig: [00:41:55] It's look, it's a, it's a few bucks it's not a lot. Right. But then like because once the insurance takes it because the the name of the game is to make sure you're defended by the insurance, that's the.

 

Monica Gilroy: [00:42:05] That's what you want. Right. Exactly.

 

Pete Neubig: [00:42:07] Hire the attorney first to do all the like to do a little bit of legwork so that we can make sure that the that the the insurance will defend you. So. That's right. So if anybody says mold escalate the work order to the to your your your property management team. Hopefully property managers are not overwhelmed if your property manager is doing all your maintenance requests and that should go to you. Yeah, in theory, because if somebody is handling a bunch of maintenance requests, I promise you things are going to fall through the cracks. So this needs to put a bright light, shine a light on it. Somebody has to take complete ownership, then offer them to get out of the lease. Put that in writing. When they say, I don't want that, make sure you put that. If they don't give it to you in writing, make sure you write that in writing. Put everything in one ticket. What happens with mold a lot of times is the resident will put in 40 tickets, right? Every day they'll put a ticket in. The best thing to do is just merge all the tickets to one master ticket. So if you can do that, then all of the notes are in one spot. And if you're using something like property meld, everything is date stamped and time stamped. Every, every conversation, which is going to be important. Then send somebody out there to to assess it. So this is one thing I did not do and I learned from you just today, Monica, is that go in and take the photos first and reevaluate the photos or you go yourself to see what's going on.

 

Pete Neubig: [00:43:28] What I did is I would just send my maintenance team out there to handle the mildew, and that was a mistake, especially if there was multiple leaks and people kept complaining. And then if you do get served, uh, hire somebody like Monica and get with your insurance broker to, to review everything and make sure that you wordsmith it correctly so that the insurance will defend you. And prior to all of this, before a claim comes in, review your policies to make sure like that you will be defended. One of the things that we had trouble with Monica and maybe you can help us with this is my owner would actually become adversarial. And so in two of the three cases, my owner was adversarial because he didn't want to call his insurance to deal with it. He didn't he didn't want anything to to to deal with this. And he basically like through us and then and then ended up suing Empire on top of it. So now I'm getting sued by by, by, by both by both individuals. What are some of the best ways to smooth it over? Because I think a united front owner plus property manager will have a much better success rate in in defending.

 

Monica Gilroy: [00:44:38] So that's a great that's a great point. I will tell you that in probably 95% of the cases, though, I recommend owner do have separate counsel for property manager. Not just because owner may get hostile to property manager, but because property manager may need to remind owner Look, you promised to indemnify me, right? What I normally do is if it comes in through my property manager, I take an assessment. I usually have an initial phone call to see is it possible for us to all stay together? Sometimes it can be, but there are times when it just can't be. What I tend to do then is get that owner over to one of my friendly colleagues, right. Somebody who I've worked with for practice for 30 years. Get somebody who I've known for 29 years. So I can say, Jim, I'd like you to come into this case knowing that Jim is going to talk turkey with me before he says, you know, Monica, we want to sue the pants off the property manager, right? So you want to be sure that your attorney understands that, that there could be, you know, differing interests from that regard. But you are correct. You always want to, from the very beginning, be a united front as much as you possibly can.

 

Monica Gilroy: [00:45:46] In fact, that's the example of that other lawsuit with the washing machine where when it was becoming apparent that we weren't, we said, well, we're out. You deal with this mold situation, which we which ultimately protective ourselves. If you're all named in the suit together. Yes, be kumbaya, Try to be together as much as possible. But we're still in the back of your head, but still have that little bird on your shoulder saying what? We got to be careful in case we got to go. This we have to cross. It's called a cross lane, where you would cross, cross two or cross claim against your co-defendant. So but yes, always trying to be the united front and also information sharing. That's why I recommend at the beginning of this bring them into the loop, right. If it looks like it's something that's escalating and I love your idea of putting all your notes into the one system, you cannot document these situations enough because when you're taking notes, they're contemporaneous, right? I can't remember what I did yesterday. So how am I going to remember this year and a half ago? Right. So, right. The more you document, the the easier it is to defend these cases and win.

 

Pete Neubig: [00:46:49] So we're up against it. But I can talk to you all day, but I want to get this I got to ask you this here. So indemnification, right? It's like everybody says, oh, well, you know, I have this indemnification clause on my property management agreement. And so, like, they take this laissez faire attitude, like it's not really bothering me. But if you get sued for, you know, like for breach of contract or you get sued for, you know, not not doing your job, so to speak. And the words escape me right now like that doesn't indemnify you.

 

Monica Gilroy: [00:47:19] Right? Hundred percent.

 

Pete Neubig: [00:47:20] And a decent any attorney worth their weight in salt is going to sue the management company on breach of contract or things that are not indemnified liable, so to speak.

 

Monica Gilroy: [00:47:33] Exactly. Absolutely. Yeah like that's and you know that's yes you're exactly right is that there's going to be many times where, you know, we think this concept of oh, we can indemnify, you know, we're going to we're going to be indemnified. That's like our our our hall pass. But that's not necessarily true. That goes back to what you just said a minute ago as to are we friendly, are we together or is that owner going to be like, what were you doing? Pete? You know what? Where have you been? Why did you not respond? So yeah, you have to really be very critical of realizing that you can't just sleep in a warm blanket every night with indemnity. Indemnity is sort of what you make of it, right? Indemnity could be really great, but it could be. Not at all if you haven't done what you're supposed to do. A great point.

 

Pete Neubig: [00:48:15] Great. Right. Indemnity is you basically are begging the owner to do something and he won't give you the money. And you're too scared as a property manager to spend his money because he may not pay you back. Right. And so that that's where that's where you fire somebody. And then they have the indemnification clause and then you say, Hey, Mr. Tenant, let me help you. Right.

 

Monica Gilroy: [00:48:35] Well, that's what happened in the washing machine case. Exactly. Yeah. Yeah. Tennant reached out and, you know, we were very careful how we answered. But, you know, it was, you know, it was clear that the responsibility by us firing that owner, the owner was now in charge. And then the owner refused to do certain things and got all sorts of trouble, tried to come back on to us later. And, you know, one of the things in that case, one of the defenses was they kept saying, well, your website says you're going to come in and inspect, you know, the properties. And the judge basically looked at this lawyer and said, Sir, is the website attached to the contract? You know, like what what do you don't look to that website. And it was it was just a good example, again, of not being afraid to make a decision because ultimately all those decisions were correct. You know, by doing what you're by doing what you know is best as the PM. That's what got my PM in that case. Actually, we won attorney's fees in his favor in that case against the owner.

 

Pete Neubig: [00:49:30] Monica, I'll have to get you back on because we're up against. I'm going to take a quick break and then we'll do the lightning round. But maybe, maybe I'll have you back on and we literally just decipher a case and go over step by step.

 

Monica Gilroy: [00:49:41] I'd love that. Yes, we.

 

Pete Neubig: [00:49:43] Could do that. We can get really into the nuts and bolts. Half the half, the half the listeners would fall asleep and get into a car accident and the other half riveted and be, you know, and love it.

 

Monica Gilroy: [00:49:56] Absolutely. Anything you need. Love it.

 

Pete Neubig: [00:49:57] Yeah. All right. So let's take a quick break and we'll be right back after this. And then we'll be the lightning round. All right. Take a quick break. All right. Welcome back, everybody. We're going to put Monica Gilroy in the Lightning round. Monica, are you ready for the lightning round?

 

Monica Gilroy: [00:50:13] I hope so.

 

Pete Neubig: [00:50:15] All right. So. Let's go. Um, does Pineapple belong on pizza? Yes. I'd like you for a little bit. What was your first job?

 

Monica Gilroy: [00:50:29] Selling shoes.

 

Pete Neubig: [00:50:31] Really? Okay. Yeah. Um, how much.

 

Monica Gilroy: [00:50:33] Of an answer do you need in the lightning round?

 

Pete Neubig: [00:50:35] No, that's good. If you want to expand, you can. You don't have to, though. Okay. What is one piece of advice you'd give someone just starting out in business?

 

Monica Gilroy: [00:50:43] Oh, don't do it. Don't do it.

 

Pete Neubig: [00:50:50] What is your ideal vacation?

 

Monica Gilroy: [00:50:52] Oh, Hawaii Beach books, cocktails. Laying there, doing nothing.

 

Pete Neubig: [00:50:57] What is something that most people don't know about you?

 

Monica Gilroy: [00:51:00] Oh, gosh. Um, my dad is a scientist. He is a paper scientist, and he is in the International Paper Hall of Fame.

 

Pete Neubig: [00:51:08] That is.

 

Monica Gilroy: [00:51:09] Awesome. There is such a thing in Appleton, Wisconsin.

 

Pete Neubig: [00:51:12] All right, uh, if you could have dinner with anyone alive, who would it be?

 

Monica Gilroy: [00:51:18] Don't. Anyone alive. Anyone alive. Hillary Clinton. Sorry, everybody. Just the interesting life. Interesting person.

 

Pete Neubig: [00:51:28] You ask her. All the bodies are buried. Just kidding. Just kidding. Um, which Disney character do you most associate with Mickey Mouse?

 

Monica Gilroy: [00:51:36] I'm the boss. I'm the lead.

 

Pete Neubig: [00:51:39] What's the biggest challenge you're currently facing in your business?

 

Monica Gilroy: [00:51:42] Oh, that's a really good question, actually. My biggest challenge is I'm at a point what to do with this point in my life because I've got two seniors rising high school, rising college seniors, and I'm trying to look at these next ten years where I've got to maximize my profit to get these kids finished with school into their early lives. And then what's that going to look like for me in that next time? So I'm really doing some soul searching and realizing that I need to do what I love to do. And that's things like this, working with clients I love, but really trying to keep an eye on that balance and what it's going to look like in this next decade for me.

 

Pete Neubig: [00:52:14] All right. Last question. Would you prefer dogs or cats?

 

Monica Gilroy: [00:52:18] Dogs. Even though I have two stinky cats. Sorry, Cats. Little white. Small, fluffy dogs. That's what threatened to get when the kids go off to school as a small, white, fluffy dog.

 

Pete Neubig: [00:52:31] Mike, if somebody is compelled to to to reach out to you, how what's the best way to get get in touch with you?

 

Monica Gilroy: [00:52:38] Yeah, the best way is just through my email, which is my name. Monica dot Gilroy at Gilroy firm.com. Email is always best. Be sure to note in the in the tag line that you're a member that you heard the podcast and happy to help or get you to one of my team members to help. Again, our practice is national and we can help in many ways and are always here for we just love everything that it does and just always thank them so much. And you too, Pete, for the opportunities it gives me in my firm.

 

Pete Neubig: [00:53:09] And Gilroy is one. L Right. G i l g. I.

 

Monica Gilroy: [00:53:12] L. R o y. Yep. Like Gilroy, California, if you're from there. Don't know.

 

Pete Neubig: [00:53:17] Didn't know you guys were national.

 

Monica Gilroy: [00:53:19] That's that's I'm very I am very lucky to have throughout my career had a number of national clients that have allowed me to create a network of attorneys. And because of that, I've appeared in court all over the United States. And with fair housing that can be answered out of anywhere. As long as you know what you're doing, you can answer it. And we've been doing it for many years. Used to serve as fair lending counsel for SunTrust across the whole nation. So I've enjoyed that national practice for a long time.

 

Pete Neubig: [00:53:47] And if you want to take the fair housing course that has or you want to learn more about virtual assistance, go to solutions.com. You can create a free account on VPN and you can take that course. There's no fee for the course, and anybody in your organization can also take that course. There's no fee for that course. We also have about 12 property management, 101 courses. And if you want to reach out to me, best way is email. You can tell that Monica and I are around the same age because we do email and not TikTok. It's a at VPM Solutions.com. And if you're listening to this and you're not a member, why not join go to nrp.org or call the good folks over there at (800) 782-3452. Monica, thank you so much for joining us today. We really appreciate it.

 

Monica Gilroy: [00:54:38] Thank you, Pete. It was great.