OCTOBER 2023CIOAPPLICATIONSEUROPE.COM8IN MYOPINIONhen I accepted a position in a multi-family property management firm, I had no concerns I would have a learning curve. I had a long career in real estate, which included most asset types, including apartment development-I knew what I was doing! What I wasn't prepared for was the difference in the types of claims that presented themselves and the frequency of them! Getting into the weeds on breeds involved in dog bite incidents was one of the first surprises. Who knew how many names for the same breed and variations of it could exist? Breed restrictions are not allowed on approved emotional support animals (ESA) or Service Dogs; however, aggressive activity can and must be addressed through local counsel. Pets must also be registered on the lease; residents are not charged additional rent for ESAs or service animals, which is why there is a fair amount of fraud in the industry on getting or falsifying an ESA approval. Fair housing complaints come from a myriad of agencies across the country. Warranty of habitability, discrimination, and disparate impact is all minefields that must be considered with every resident and prospect interaction. Insurance coverage for these risks is not always available in practical terms to make it a tool other than reaching contractual compliance. A risk manager must stay abreast of each state's list of protected classes that change seemingly with the wind. Being aware of affordable versus conventional units is another industry-specific knowledge necessity. For example, if your company requires residents to provide tenant liability insurance, this requirement cannot be extended to the affordable class. When there is a resident-caused loss, the lack of insurance along with their financial status can make the cost recovery challenging or even impossible to collect. Some owners will choose to pay for the coverage themselves the close this gap. Insurers are very aware of these challenges, and it can be difficult to get coverage at a reasonable price. Because most properties in this asset class are frame construction, property insurance is especially expensive and can even be elusive. Markets available and limited capacity continues to shrink, as does coverage, and yet premiums have skyrocketed over the last several years. WTHE UNIQUE CHALLENGES OF MULTI-FAMILY RISK MANAGEMENTCHERYL PUGLIESE, ASSOCIATE DIRECTOR, RISK MANAGEMENT, MISSION ROCK RESIDENTIAL
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