Unattended Rental Showings – An Impending Crisis

First, let me preface this blog by addressing how Real Estate Solutions approaches technology and new systems.  We believe we are on the cutting edge of all technologies that allow our clients to receive world-class property management, and that enable us to reduce our waste, carbon footprint and inefficiencies.  (Some examples: -Our company cars are a self-driving Model 3 Tesla and a Prius Hybrid.  – We are paperless.  – Our systems are all tied together so that any Team Member can run any aspect of RES from anywhere.  Phones, texting, calendars, appointments, lease signings, inspections – it’s all mobile and fluid with our proprietary systems.)

I mention the above because there is not an argument to be made that RES is in any way “anti-technology”, or that we are slow to adopt new ways of doing business, because we insist on having our highly trained humans show up (on time) and show rental properties.  Keep reading, you’ll see what I mean.

Imagine you’re a new landlord.  You have just purchased what you believe will be the first – hopefully of many – investment properties.

You research the property management industry and you quickly realize there is a lot of value-added in hiring a professional property manager.  They bring a lot to the table in terms of marketing, tenant screening, leasing, inspections, legal knowledge, repair expertise, organization, tenant retention and on and on. 

So you screen a few property managers, and settle on one that you think is going to be the best fit for you.  They seem very technologically advanced and have assured you they will take care of your incredibly valuable asset – your rental property.

So you sign up with this new property management company, hand over the keys and hope for the best.

What may happen next is something most landlords would find appalling.

Your property manager, the very company you trusted with your most valuable asset, may be allowing strangers to enter your home, without the property management company so much as sending an agent to the home to check on anything.  Back-to-back, over and over, and with no intervening visits from the property management company.

They are calling this “showing your property.”

Literally, tenants off the street that the property management company has never met and probably never spoken with, are going to be given the access code to your house, walking through at their leisure (with who knows who else in tow), doing who knows what and leaving the property in unknown condition.

This isn’t what you signed up for.  How is this possible?

There are a number of these new technologies, that allow overburdened (read: lazy) property managers to avoid the time-consuming part of their job they don’t really want to do in the first place: screening prospective tenants, making showing appointments with pre-qualified prospective tenants, fighting traffic and going to show rental properties.  These unattended showing systems have stepped in to take that burden off the property manager’s plate.

The unattended showing apps and systems have various ways to “pre-screen” prospective tenants based on criteria established by the property management company.  In some instances, the software does everything for the property manager, from allowing the tenant to pick the date and time of their showing, upload their photo ID, and put a credit card on file.  Then the tenant is texted the lockbox or digital door lock code and has access to go show themselves the property.

The property management company gets to brag to their client, the landlord, that they offer “7 day a week availability” for showing properties, when really, they aren’t available at all.

So, instead of doing their job and upholding their end of the bargain as your professional property manager, they are phoning it in and putting the landlord and the landlord’s property at significant risk – more on that below.

Interestingly, and despite how rigorously some aspects of Real Estate practice are regulated, unattended showings are completely legal.  There are no rules in Colorado (there are such rules in other states) to prohibit property managers from using these unattended showing services.

You can probably tell from the tone of this article, that we at RES would never consider doing this.  And we are a company that literally counts clicks and seconds on our internal processes to maximize efficiency.  Yes, it would save us a lot of time and money if we weren’t out in the field daily showing our client’s properties, working hard to get them rented.  But… that’s our job.  It’s what we have been entrusted to do, and to do well.  So instead of unattended showings, we leverage our technology by allowing us to be more productive in the field – not pretending that being in the field and going to properties isn’t part of our job.

We’ve had some of these “unattended showing” companies calling us for years, trying to get us to outsource the showing part of our job, and we always laughed among our Team and said “who would think this is a good idea?!” …

But just recently we met up with a large number of Colorado property management companies and even some reputable industry leaders and we discovered that nearly every. single. one. of our competitors has jumped into the pool of unattended showings with both feet.

We’ve compiled a list of some of the reasons unattended showings are legally, ethically and financially (for the landlord) a terrible idea:

1)  The PM (property manager) who isn’t present at a showing can’t control whether the property was secured. By secured, we mean the obvious -the front door – but also the less obvious: sliding glass doors, windows, etc. If there is a break-in, how will anyone know who is responsible?  There’s no surveillance, and therefore no proof that anyone did/did not leave the property unsecured. These unattended showing services give tenants a one-time use code, which is great if they lock up and leave, but what if they don’t? No one is there to follow up and check.  It’s called property management for a reason.

2) The PM who isn’t present at a showing can’t control inappropriate, money-wasting or dangerous to the property HVAC settings. Maybe it was cold when the prospective tenants arrived, so they cranked the heat up to 80. Who knows when the next person will be in the property to check on this.  A good PM company has checking the HVAC setting as part of their protocol on every showing to ensure pipes don’t freeze in the winter and to ensure the landlord isn’t paying to heat or cool an empty home more than necessary.  **Note: you technically CAN have your lights, HVAC, doors and windows all hooked up to a “Smart Home” system – but you will be spending thousands of dollars plus a monthly maintenance fee in order to do this.  This expense is not usually viable for a rental property.**

3) The PM who isn’t present at a showing can’t control whether lights, fans, the oven, etc. were left on.  It’s not uncommon for prospective tenants to check whether the stove works, oven heats up, whether the hot water works, check water pressure, etc. while viewing a property.  Without a PM on site, there is no way to know how the unit is being left.  There could be running water or a stove top burner left on.

4) The PM who isn’t present at a showing can’t control against someone moving in.  A tenant could show up with their access code, change the locks and move in.  The only recourse the landlord would have at that point is engaging in the lengthy eviction process, which takes weeks or months.  It’s that easy to take possession of a home.  Eviction is the only process here if a tenant decides to become a squatter.

5) The PM who isn’t present at a showing can’t control against vandalism or even unintentional damage.  What if the prospective tenants just have kids with juice boxes, or they are walking around with markers or crayons?  What if they bring food in the house and it drips or spills?  No proof, no evidence, just a damaged landlord property because of a lazy PM.

6) The PM who isn’t present at a showing can’t answer prospective tenant questions about property condition, the application process, etc. This part of the process – helping prospective tenants confidently move forward and apply for a rental – is the hallmark of a great PM company and it cannot be overstated.  When tenants are shopping for a home, they often want to know how maintenance will be handled, they may have questions about the home, questions about the application process and much more.  The PM also can’t acquire important, real-time feedback from the prospective tenants.  This information becomes incredibly valuable when determining how the market is responding to the listing, and understanding when there is a need to make changes to the listing. Having a real human present who can speak on behalf of the PM company and represent the house accurately plays a large role in getting homes rented quickly.

7) The PM who isn’t present at a showing, by allowing an unattended showing, is violating the public trust.  This is the number one reason that property management is a regulated industry – to protect the public.  By allowing back-to-back unattended showings at a vacant rental property, the PM is not doing anything to protect the public.  Any number of problems can (and will) arise when unattended showings continue. Innocent prospective tenants could be accused of damage caused by previous prospective tenants, and the landlords property and financial interests are simply not being protected.

8) Every landlord that hires a PM company will tell you that one of the main reasons they hired PM services is literally to handle property showings.  Unless it is specifically spelled out in the Management Agreement with the Landlord, allowing unattended showings is a major lapse of integrity, and in our opinion, it’s simply lying.  It’s misrepresenting your services to the landlord.

9) The PM who isn’t present can’t help identify hazards at the property such as ice, snow, leaves, a loose handrail, etc. Any accident that happens on site due to these conditions could lead to a lawsuit that embroils both the landlord and the PM company. A slip and fall situation could reasonably have been prevented (or at least, the risk mitigated) by the presence of a professional property manager who is trained to identify apparent risks. A good PM company is there to let the prospective tenants into the property and carries a snow shovel in their vehicle to clear a path to the house if there was  a recent snowfall.

10) The absent PM can’t prevent prospective tenants from tracking in dirt, snow, debris etc.  A good PM recognizes that there are many showing situations where shoes simply need to come off and the clean, vacant property needs to be protected.  Without a PM present, there would be no way to hold a prospective tenant accountable, or even know which prospective tenant dragged mud across white carpets and clean floors.

11) The PM who isn’t present can’t prevent prospective tenants from bringing their pets into the home during a showing.  It might be a “pet free” property, that could now easily have dog hair everywhere, or worse, urine stains.

12) Anything of value can be stolen, and you won’t know when it happened.  If there are 5 unattended showings back to back, and the PM goes in after the 5th showing and the refrigerator is missing, then what?  Do they chase down all 5 prospective tenants (all of whom predictably would say it wasn’t them) and then they end up buying a new refrigerator?  How will the showings go while there is no refrigerator?  Will that delay new tenants moving in?

These are just some of the risks with unattended showings.  So what happens if there IS damage found at a property after say, 8 groups of prospective tenants have seen the property?  How does the PM track down the responsible party?  As you might imagine, they don’t.  They can’t.  The problem of damage will ultimately be the burden of the landlord to deal with.

At a recent seminar, I was discussing this very issue with someone fairly well-known and respected in the PM industry.  His take was that “this is just the advance of technology,” (I’m paraphrasing) and that if there’s damage, his company would just pay for it… and that we want technologically savvy tenants renting properties because then they will be more able to submit work order requests online (again, just another benefit to the PM company) or they will better be able to google how to troubleshoot a system in their home – that kind of thing.

This unnamed industry professional also indicated that tenants want to see the property now, and not wait for a future (even later that day) appointment.  Anyone who has worked in property management for any significant length of time will tell you that any tenant who “needs to see it now” is going to be a complete waste of time.  The need to see a property “now” is consistently one of the biggest red flags in our initial pre-screening process. Being responsive to showing requests is incredibly important, but running out to show a property at a moment’s notice because a tenant demands you do so, is invariably foolish.  There are only a few notable exceptions to this policy, such as “I just flew into town and I am only here for 2 days to secure a property…”  – this is the kind of situation in which a good PM will run out to show the property if the prospective tenant checks the other boxes in terms of availability date, pets, etc.

I will let you decide if you think those points represent sufficient counter arguments to my points above.  Suffice it to say we think those arguments are weak and serve merely as a rationalization of not doing one’s job to the level expected by the client. 

We ask that you please pass this article along to everyone you know who owns a rental property and who has a management company.  The fallout from unattended showings could be significant, once the wrong people figure out how easy it is to attain access to vacant properties.  Even for one owner of one rental property, having an avoidably dirty floor or a prolonged vacancy is enough reason for unattended showings to be a problem.

If we’re being honest, the only upside for unattended showings goes to the PM company.  The PM company gets to save precious man-hours and resources by not sending PMs into the field to show rentals every day.  This is not Uber, this is not the self-checkout at your local grocery store. This is not analogous to other technologies that can take the place of a human.  The main differentiating factor here is accountability.  Namely, with unattended showings, you can’t prove who did what to or in a house, so there isn’t any.

As property managers, we get it!  Showing properties really is a challenge.  Traffic is terrible, sometimes the prospective tenants don’t show up, often times they’re late, often they waste our time…   But you know what?  That’s the job property managers signed up for.  If you have a problem showing properties, maybe you should find a new industry where you can hang out at your desk all day.

As for us, we’ll see you at the next showing.