In the property management field, there’s an essential discussion about the interplay of cost management and compliance, particularly in areas such as risk management and fair housing training. This topic is reminiscent of the old adage, “Penny wise and Pound foolish,” and holds true in the intricate dynamics of this industry.
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Table of contents
- When we’re talking about dollars and sense, how does that apply to fair housing training?
- Are fair housing complaints really that common? And who is in charge of these investigations?
- How much can a fair housing complaint really cost you?
- Won’t insurance cover all of those costs?
- What can you do to avoid these costs?
When we’re talking about dollars and sense, how does that apply to fair housing training?
Experts who work closely with fair housing attorneys and are versed in internal compliance audits and operational reviews often observe a common trend among clients.
Many clients, initially interested in essential training, hesitate when confronted with the costs, viewing them as an added expense rather than an investment. This perspective is a common pitfall in the business world, where the primary aim is to generate profit and sustain operations, including workforce and property management. However, what often goes overlooked is the significant financial impact of non-compliance.
It is a noted irony in the industry that these same clients, who shy away from upfront costs for training, find themselves consulting with fair housing attorneys months or even years later, dealing with complaints. They are frequently taken aback by the substantial expenses involved in resolving these complaints, having previously underestimated the cost of proper training and investigations.
From a broader perspective, it’s important to recognize that training is not just an operational cost but a critical investment in compliance, risk management, and the overall protection of a business’ assets, employees, and bottom line. This perspective is not just a viewpoint of those within the fair housing training sector, but a widely acknowledged principle in business operations and risk management.
Are fair housing complaints really that common? And who is in charge of these investigations?
Many are familiar with HUD, the Department of Housing and Urban Development, known for issuing regulations and overseeing investigations. Commonly, it’s assumed that HUD is the primary source of all investigations, but this is merely the surface of a much larger structure. The Department of Justice (DOJ) also conducts these investigations, as do state governments.
Furthermore, fair housing advocacy groups and FIPP organizations play a significant role. They actively conduct tests to identify non-compliant entities. Private law firms, too, are key players, sometimes initiating large-scale fair housing lawsuits against major companies, encompassing numerous properties across various states.
Thus, it’s a multi-faceted approach, not limited to just one organization. If one body does not undertake an investigation, another will step in. Regarding the prevalence of complaints, there’s a significant misunderstanding. Unlike other areas of compliance litigation, which frequently make headlines and circulate on social media, fair housing issues tend to receive less public attention.
This lower profile can give the impression that fair housing complaints are rare, especially when compared to something like sexual harassment, which is widely reported and discussed. However, this perception is misleading. In 2021 alone, there were over 31,000 fair housing complaints filed. This statistic indicates not only the commonality of such complaints but also suggests a near-inevitability of encountering them, which is a concerning prospect for those who are unprepared.
How much can a fair housing complaint really cost you?
The scope of consequences in fair housing cases is vast and varies greatly. While each case is unique and handled individually, a broader perspective reveals some alarming trends. In the realm of fair housing, we’ve seen instances where the combination of settlements, penalties, and legal fees have exceeded $1 million for a single fair housing issue or investigation. Such staggering costs can be financially crippling, potentially forcing companies out of business if they lack substantial financial reserves.
It’s crucial to recognize the immense responsibility resting on every employee in a property management company. Every interaction, whether it’s an employee attending to apartments, managing phone calls, or any other routine task, carries the potential for significant financial repercussions. The direct costs, however, are just the beginning.
Beyond the immediate financial impact, the involvement of employees in investigations, including interviews and discovery processes, is often overlooked. These activities can consume numerous hours, diverting employees from their primary responsibilities. This not only results in lost productivity but also translates into additional financial losses for the company. The cumulative effect of these factors can severely damage a company’s financial health, a risk many are not fully aware of until it’s too late.
Won’t insurance cover all of those costs?
Many of us have experienced the limitations of insurance policies, and while they are an essential part of business risk management, over-reliance on them can be a flawed strategy. The reality is that insurance policies vary significantly, and some may not cover fair housing issues at all.
Even for policies that do offer coverage, the process may not unfold as favorably as one might hope. Consider the scenario where a fair housing attorney’s expertise is needed for a defense in an investigation. These specialized legal services are not inexpensive, and there’s no guarantee that an insurance policy will cover these specific costs. Often, insurance providers will opt to appoint their own attorneys, who, while qualified as lawyers, may lack specialization in fair housing law. This lack of expertise can lead to a less effective defense.
So, while there might be some cost savings on attorney’s fees upfront, the potential for a weaker defense could result in more significant financial losses in the long term. Therefore, while insurance is undoubtedly a vital aspect of business operations, it should not be solely relied upon as a safeguard in fair housing investigations.
What can you do to avoid these costs?
In discussing ways to mitigate costs, simply mentioning ‘training’ would be an oversimplification. Admittedly, it might seem self-serving for a fair housing training company to advocate for fair housing training. Yet, this recommendation comes from witnessing the stark contrast between companies that rigorously adhere to compliance year after year and those that do not, with the latter facing substantial risks and liabilities.
Training is undoubtedly the foundational step, involving the implementation of policies and procedures related to fair housing, often starting with new hires within their first 30 days. However, the approach needs to be extended further. It’s crucial to ensure access to ongoing high-quality training. Repeated and updated training is essential; a single session is not sufficient. Many make the mistake of one-time training, only to commit a fair housing violation years later. With the fast-paced evolution of knowledge in this industry, continuous learning is key.
Currently, the recommendation is to conduct training annually, a shift that many larger firms are adopting. Diversity in training content is also important. Rather than repeating the same course each year, it’s beneficial to cover a range of fair housing topics, addressing specific problem areas as needed. This should be more than a mere annual memo; it needs to be an integral part of the company’s compliance and risk management strategies.
This approach is about safeguarding not just the employees but the entire business. While fair housing training is now gaining traction among larger firms that recognize its significance in reducing liability, it’s vital for all companies to incorporate solid training policies and procedures into their compliance practices. The advice is to start today if such practices are not already in place and to integrate training as a key component of risk management.
In conclusion, the criticality of robust fair housing training in the property management industry cannot be overstated. This approach transcends mere compliance; it’s a strategic measure to mitigate risks and protect the business from potential multi-million dollar liabilities. The contrast between companies that diligently incorporate continuous and diverse training and those that neglect this aspect highlights the substantial financial and operational risks involved.
Regular, high-quality training, tailored to evolving industry needs and specific challenges, is not just a recommended practice but an essential aspect of risk management. It’s a proactive step that ensures not only adherence to regulations but also the long-term sustainability and success of the business. Therefore, property management firms are urged to prioritize fair housing training as a cornerstone of their operational strategies, safeguarding their businesses and contributing to a more compliant and ethical industry landscape.
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