Ohio’s former DRE Superintendent Keeps Us Out of Trouble: Anne Petit

The one thing that I would stress is do not ignore that letter. Do not ignore that letter because things will only go from bad to worse, or things will only go from inquiry to open case and investigation. First and foremost, if you are already a licensee and the division, any, any real estate commission reaches out to you, then you have a duty to respond. At least in Ohio, you can actually just be charged with failure, failure to cooperate, and that is a big scary discipline.

Welcome back everyone to Peter Lohmann's podcast. Today I'm excited to be joined by Ann Pettit, the former superintendent of the Ohio Division of Real Estate and Professional Licensing. Hoping I got that title just right. Uh, thanks so much for coming on the show today, Ann.

Thank you for the invitation, Peter. It's really great to see you again.

You as well. So I'm, I'm of course excited to dive into all of your knowledge about property management licensing in Ohio and across the nation. I've got a bunch of fun questions we can ask about trust accounting and some of the scariest violations you dealt with in your career there. But before we do that, I'd love to just help the audience understand a little bit about you and your background. What led you to that role for the state of Ohio? Would you mind just sharing like 2 to 5 minutes of kind of your career?

Absolutely happy to. Interesting path because I have a background in finance and banking, which led me to the Secretary of State's office in Ohio. In Ohio, the Secretary of State actually conducts our elections, as you know, but to explain to everybody else. So I was the director of campaign finance for Ohio and took the Securitas route to the governor's office with our then-governor Bob Taft. And there were issues internally and externally with the Division of Real Estate and Professional Licensing, and I was asked by Governor Taft to go and address those issues. And having a background in lending, specifically appraisal and real estate, especially residential, it seemed like a great fit and thought that I'd probably be there to put out fires for a very short period of time. And as you know, I absolutely fell in love with serving our licensees through Ohio and working with regulators across not only the United States, but Canada and other countries. And ended up staying for 15 years.

Mm-hmm. Yeah, that's, that's incredible. And that's how we came to know each other in your role as superintendent back in 2013 when my business partner and I were looking at starting a property management company. We knew nothing about it. I didn't know the first thing about real estate or property management. We just had owned a few of, single-family rentals at that time. So I of course went, I literally went onto Google and said, how do I start a property management company in Ohio? Quickly found out that it required a real estate license and researched how to get that. And so around that time I emailed you and I think I said something about like, why to manage property does it require a real estate license? This doesn't really make sense to me. And I had sort of a naive, ignorant view of everything, basically, essentially at that time. And you very nicely offered to take me out to coffee. And that's how we first struck up a conversation. And then since then, I went on, of course, started the property management company. We kept in touch and you were gracious enough to invite me to join in a task force to update property management licensing law, make a set of recommendations, update property management licensing law in Ohio. So I want to, I want to start with probably what's going to be interesting and relevant for my audience or close, closely aligned with what they're instantly thinking about when they hear that we have a guest such as yourself on the show, which is what are the most common violations that residential property managers run into around licensing law? Compliance that could get them into trouble with a division of real estate in, in any state, in any jurisdiction?

Absolutely. Boy, I'll tell you what, the first one— and, and again, because the majority of your audience are already in the profession of managing residential properties, type properties, but I will, I I will mention that at least in Ohio for a very long time, the major compliance issue and the thing that got people dragged in front of our real estate commission was unlicensed activity. Absolutely, absolutely unlicensed activity, but closely on, on the heels of unlicensed activity came the negligence— that's my word— for purposes of accounting and being accountable and providing accounting to landlords, owners of properties. It was a very eye-opening experience to follow these investigations in Ohio, at least, and realized that there were people out there who— and entities too, corporate entities as well— where they just thought, oh well, you know, I bought my own investment property, now I can go manage other people's properties. You know, it's not that easy. And yeah, it's not that, not that black and white. Um, and, and probably third on, on the list would be just the also the lack, and I know this is maybe not going to shock you because you've done a lot of research and have been exposed to a lot of different, um, uh, entities that aren't doing it correctly, um, but the, the lack of any, um, uh, writing with regard— contracts, rental agreements, how you're going to get compensated as the manager of properties with these landlord owners. So yeah, those are probably the top 3 that we've, we've seen over the years.

Okay, got it. So just straight up managing without a license, followed by accounting problems. Followed by lack of written agreements, property management agreements, leases. Interesting. I'm wondering about the folks who try to manage without a license. I imagine some of, some percentage of those is just pure ignorance. They just literally didn't know. They just, they were managing their own. Their buddy asked them to manage their duplex. They said, sure, why not? And then somehow the division gets word of it. But I'm guessing there's another percentage of those that are actually quite deliberate. They just couldn't find a broker, didn't want to spend the money, didn't want to take the time, and just figured we'll kind of slide under the radar.

Absolutely, you hit the nail on the head. And, um, for those in, in the, the latter, uh, category, it also has an awful lot to do with greed, um, and, and just the, the sheer, you know, why should I share, you know, the compensation fees, whatever, with a broker. And you know what, not to malign any of our friends in the law profession, but there have been several groups that have reported, at least when I was still superintendent, reported that that they asked an attorney what they needed to do, and it was purely the business setup and had nothing to do with, you know, the requirements of occupational licensing. These attorneys were, you know, might be great business corporate attorneys setting up business entities, but they know nothing about real estate law.

Yeah, I'm picturing the attorney explaining all the details of an S corp versus an LLC and just either not knowing or just not aware of, yeah, like you said, occupational licensing for specific types of businesses like property management. Yeah, and Ohio is interesting specifically for a few reasons, I think. I don't want to— curious to get your take on this. One, it's my understanding that the requirements to become a broker in Ohio are quite strict or are difficult compared to many other states. And then also Ohio has very few or no reciprocal states. And then the other thing is that in Ohio, as we both know quite well, you can only essentially be the broker for one company. Now you can have like, you can actually have multiple companies if they're shared ownership and branding and some other things, but I get asked all the time, uh, hey, we are bringing our national property management company to Ohio. We've heard so many great things about you. Can we hang under your broker's license? And I'm like, I'm sorry, but you can't because I can only be the broker for my own management company.

Yeah, not unless, not unless that national, um, entity wants to take on some version of your nomenclature, right?

So exactly.

Uh, but, um, no, Good, good points. Excellent. So the one thing that I would start with is kind of jumping in the middle. Reciprocity does not exist anymore due to a recent bill that was passed, signed into law, which opens the door, quite frankly, to any licensee in any other state. I will say state instead of jurisdiction at this point because it doesn't translate into Canadian provinces or anything like that, but regardless. So somebody from Texas with a broker's license can apply here and if they meet all of the requirements, which is inclusive of the superintendent determining that they have some sort of equivalency with regard to qualifying education that got them there in the first place in Texas, then they can come in to Ohio and get a broker's license.

Sounds like good news.

It is unless you're an Ohio broker.

Darn it.

It's like, oh, wait a second, you mean these— so just know that our legislature is currently contemplating radically reducing the requirements for licensure here in Ohio for both salespeople and and brokers. So yeah, so, okay, what was the first thing that you started with?

I was saying that Ohio is very difficult to get your broker's license. So, so it still is somewhat, especially harder, because I remember getting mine in 2 years. But now I think it's 3 if you're just doing leases, which is what I did.

Yes, yes. Um, so first and foremost, you know, you had, you had a post-secondary education degree, so that, that helped. However, when it comes to the experience component, you're absolutely correct. It is now you've got to be working what's considered at least 30 hours a week for 3 years of the last 5.

That's no joke.

It's no joke, especially when you're doing, you know, commercial leasing, the residential leasing, property management. But it's good that— it's good that there's also that allowance for our real estate commission to have a Peter sit in front of them and say, "Here is my experience, here's my story, here's why I think I qualify for this exception to be permitted to sit for the broker's exam." And I will tell you that 9 times out of 10, at least until recently, our commission is taking that type of experience very, very seriously and permitting individuals like yourself to sit for the exam.

Well, that's great to know because I do have some friends who are working their way through this process and are anxious to get— because there's folks— so the path that I took was I got my partner and I got a real estate license. We operated as a team. We were actually the RL Property Management team under my friend's brokerage. He actually was kind enough to bring us in as owners under his brokerage that he sort of restarted. And then after the 2 years, and of course we paid him like a basically a split to be to act as, as the broker. And then once we had the 2 years of experience and the necessary number of leases, I went and sat for the broker's exam and then we separated from him. And we're able to stand on our own. And there's other— that's a common path for folks who are trying to start a property management company. I get this question all the time, probably 2 or 3 times a week. How do I start a property management company? And, and this license, you know, this licensing obstacle comes up quite a lot. So I share all the time my story of what I did, and I recommend it to others because it's it's kind of like the right way to do things. The other option, you know, as you're well aware, cynically referred to as rent a broker, try to find some broker who's not active and pull him in, him or her in, in some way, um, ideally in a more active capacity. Uh, but I know people do all sorts of arrangements.

I, I wanted— I thank you for mentioning rent a broker because the one thing I did want to, um, point out, and it is because we were able to establish a relationship professionally that I know this. When you say that, that you got a friend to take you into there, it was not a rent-a-broker situation. It was— he was an active broker that we worked out of the same office. Yes. Exactly, who you had involved very intimately and integrally. So I just— because I know that there are others out there who are, like you said, very excited and anxious to get started in, in this arena, and I would just really, really strongly recommend that they find someone if they need to find a broker, brokerage firm, somebody who is already doing or willing to be actively involved in property management.

Great, great clarifying remarks there. I'd love to hear a couple horror stories. What's some of the worst cases that came across your desk of either unlicensed activity or licensed brokers behaving badly? Property managers, some— I know you've seen a lot.

Um, so there are two, there are two instances, uh, that immediately, um, jump to mind for me. And one, although it's been a few years ago, I also believe that, that the— and I, without mentioning names, I, I know that you've, you've read the disciplinary summaries regarding this one. Um, $1.2 million, um, uh, in civil penalties assessed both to the corporate entity and to the individual who was, um, undertaking property management. This was a really sad state of affairs from Northeast Ohio. Because there were a lot of not only owners, but also tenants who were adversely impacted and owners, landlords who lost a lot of money. There was misappropriation, there was negligence. It was a very horrifying situation.

Situation.

And then a little closer to home in Central Ohio, there, there was the principal broker who was recruited to serve as the— and this is my word, not the Commission's word— the front for another individual salesperson licensed agency and his property management arrangements. So yeah, and to the extent that this principal broker allowed this salesperson to open a storefront like within 2 blocks of their brokerage office and had no clue what was happening in that other office. Let alone have it run through the brokerage. In Ohio, there has to be a separate brokerage property management trust account, and so yes, that wasn't happening either. So, and when, when the salesperson's license got revoked by the commission, as you can imagine it might once this all came came down to it at hearing, then the principal broker went out and just took up all of the lease agreements, the management agreements, without re-executing them in his brokerage name.

I think I know who you're talking about here. Yeah, you do. Yeah. Yeah, it's, uh, the way I think about, the way I think about the state of Ohio, um, division of real estate and, and the, the real estate licensing laws, the way, the way I think about them is like, you, you can completely ignore them for a really long time, like years, but they will, it will always catch up. It's like the, it's like not paying your taxes. Like you can sort of bury your head in the sand for a while, um, move away, like try and just not have a permanent address, but there is no getting around it. Like eventually it's going to come out and they're going to surface everything. It's all going to get run through. Um, so you're better off just doing it right from the start and sleeping well.

Yep. And, and you know, to go back to the very beginning of, um, you know, our joint story. I just always believed, and I love the fact that my successor in Ohio, Daphne Hawk, also believes that if we can help somebody come into compliance before they get too far into things or too far, you know, in the deep end of the pool, so to speak, without their water wings, that we, we want to help people get licensed and stay in compliance. So again, the fact that you reached out the way you did, boy, I was, I was only too happy to, to help you head in the right direction.

Sure. So along those lines, for the operating property management business owners out there nationwide, what are some sort of quick and practical tips for staying out of trouble with their division of real estate? What are some just basics they can double-check or make sure that they're doing just to minimize the chances of either a complaint in the first place, or if there is a complaint brought, minimize chances of violations?

Retain an attorney who practices in front of that commission first and foremost, and then also avail yourself of the public service that that administrative office and those staff are there to provide., you know, just, just like talking about you and I getting together and, and, you know, hooking up you and your partner with division counsel so that you had resources where you could get your answers to your questions. Take advantage of that public service, which is there for you to help get you into and keep you in compliance.

Yeah, my experience with the Ohio Division of Real Estate was always that they were very friendly when we would call. I would have questions about— I mean, all the way back to trying to get my broker's license. I was just asking questions. They were very helpful and friendly about getting back to me with detailed answers instead of just saying, oh, look, here's where you can look, look that up. Is it your experience that this is true across— this is normal in other states as well, would you say?

As a past president of our regulators association, I'd love to say yes, it happens in all 55 jurisdictions in the US. However, listen, post-COVID, there are still so many— I mean, you know the service industry as well, but public service There, there's still a lack of staff turnover. Unfortunately, sometimes they have to point you toward an online resource and say, here, go look at this first, at least. But I think that, that we in Ohio at the division really, really try 1,010% to be as helpful as we can because that makes the work less on the other end, on the enforcement end.

Yeah, so I mean, I would encourage everyone who's listening, just as you mentioned, just reach out. Don't be scared of that office. In fact, you want them to know who you are, honestly, in a friendly way, first. That was always, you know, on my mind. I'm not gonna, you know, hide the fact that I cultivated friendly relationships over there. I did enjoy being a resource for the division as well, to the extent that I could be helpful. But I also wouldn't mind getting a second look if there was a complaint, um, and an assumption of, hey, this— let's, you know, let's look into this a little bit first. Um, I don't— I think, hey, that's just good business.

Yes, absolutely.

Absolutely. I'm so curious to hear your answer on this. If let's pretend that a property management business owner gets a big scary letter from their division of real estate, comes in an official envelope, you know, sign for receipt of mail, and it's a notice of a complaint. Or maybe it's, maybe it's before that stage, but it's just Hey, we want some information about something that's going on. As the property management business owner, would you recommend that I respond in my capacity as the business owner, or is this a situation where at the first hint of official correspondence, I should lawyer up and get one of those lawyers that you described who appears before the commission frequently and run everything through them like right from the get-go?

Oh boy, that's a difficult one. The answer is whichever way you decide to respond, okay, you have the right and you have a responsibility. You have an obligation to respond to that inquiring entity. The one thing that I would stress is do not ignore that letter. Do not ignore that letter, because things will only go from bad to worse. All right. Or things will only go from inquiry to open case and investigation. That might be a more succinct way to, to stated. If first and foremost, if you are already a licensee and the division, any real estate commission reaches out to you, then you have a duty to respond. And you, at least in Ohio, you can actually just be charged with failure to cooperate. And that is a big, scary discipline.

Yeah, I've always heard that, and I've actually seen some examples from my industry of folks who didn't respond or responded curtly or possibly even rudely to different administrative bodies within their state or regulatory bodies within their state. And it did not end well for them, unfortunately. Yeah, I'm interested in like, I mean, if I respond in my individual capacity without lawyering up, that sends one message. And if I lawyer up and everything comes on this official legal letterhead back to the division, that kind of sends a different message. And I try to, I don't know, I like, it's never happened yet, but I just wonder like, what should I do if that ever does happen?

Trust me when I say that— did I just say trust me? When I say it doesn't matter which direction you go, the division does not look one way or the other askance or negatively if you retain counsel. It is your right.. It's a due process system that is set out in every state's administrative regulations. So do what you feel you need to do. The one thing that I would say is you might also want to make sure that you stay on that attorney to say, listen, have we responded yet? Have we asked Have we asked for an extension? I guess what I'm saying is just don't turn it over to counsel and kind of sit back and forget that you are the one with your whatever on the line, license or otherwise.

Sure, sure, sure. Makes sense. Um, I'm curious, uh, what's your take on So if we think nationwide about regulations that are specific to property managers, state regulations, in what direction are you seeing things move overall? Now, I know that when we, when we talk about landlord-tenant law, those are definitely becoming more tenant-friendly as a general rule across the US. But when I think about property management licensing law, I don't keep up with every state and their licensing activities. Are you seeing that states are moving in the direction of more specific and strict regulatory requirements and licensing requirements for property managers, or are you seeing states ease up those requirements and, and move more toward kind of a laissez-faire approach?

I, I think it depends on the legislature and the environment in that state right now. There have been some that have I hate the word flip-flopped, but have overturned or reduced requirements, and there are others that are really, really trying to step those up. So, you know, there are now, Ohio amongst them, states with either pending or recently passed legislation with regard to squatters, for instance, that would prove helpful to you as a property manager, not only just a, you know, a single-family resident owner. There are other places where they have taken up legislation on condo owners associations, homeowners associations. I will just say that during my time as superintendent, gratefully, we were able to avoid any of that being more strictly enforced. But there were a lot of issues even with that type of management, especially the condo owners level. So it really has ebbed and flowed. With regard to how a current legislature sees this and, you know, what consumers, what constituents are, you know, bringing advocacy to bear with those legislators.

So here's something I'm really interested to get your take on, and I know this may vary from state to state. Is it unethical or even possibly in violation of licensing law for a property management business to send targeted marketing materials to a property owner who's using another property management company? Now, I want to clarify that I know this isn't allowed in the case of a, um, a listing agreement. So in other words, if if you're a licensee, you can't target a homeowner who, you know, has a listing agreement with another licensee. But it's not clear to me if that is true as well in the case of a 1-year property management agreement.

So at least in Ohio, if somebody is already licensed to be a salesperson or a broker, I would probably argue that there's an ethical consideration to this, whether or not, you know, if a complaint were filed by, let's say, you know, the current agreement holder or contract holder, whether or not that would result in discipline by the commission. I think, you know, that That has not been tested at this point, but I would be very interested in how a case like that would, would fall out.

Yeah, because for me, there's like an antitrust component to this where, you know, we can't really interfere with businesses' ability to compete and to ask a property management company to not advertise to any consumer who is using a property management company to who is using a competitor. I don't think the FTC would like that very much. I mean, it's one thing for a 30-day house listing agreement, but for a 1-year management agreement.

Right, right. Yeah. I, you know, I think that that would be an interesting case to follow.

Well, I hope to never be a part of such a, such a test or a test case.

I hope you're not a party to it either. I hope nobody in Ohio is. Let's let another state test it.

That's right. Great idea. What do you, what do you make of these states that have no property management regulation at all or licensing requirement at all? Like Maine is one example that I know. Like, what, what do you make of this?

So I— and it's interesting because I used to interact fairly frequently with the regulators in Maine, and the director there— well, we just don't have that problem. I said, okay, well, you either don't have that problem or you just don't have that problem being brought to your attention. Is I, I'm sorry, I'm a little cynical in that regard because I've seen it way too often. And really, if, if the division in Ohio doesn't know about it, it's really because somebody's just not taking the time to report it because it's happening.

Yeah, it's wild to me. I think there's 5 or 6 states that have no requirements at all. I just sort of wonder what's happening out there. It's like the Wild West. Uh, any, any John Smith can just open up a property management company, uh, handle money that doesn't belong to them.

And I, I find it very difficult to believe, especially in these days when there are so many other regulations being brought to bear on, you know, real estate professionals as a whole, that that is an area that has just gone unregulated in, in those 5 or 6 states, as you said.

So on the, on the other side of the coin, putting yourself in the mind of the consumer, what are some things you feel like the general public or consumers should know about property managers before selecting one? Like, let's say a relative of yours was looking at hiring a property manager in another state where you didn't know the names of specific ones, what would you— what would be your advice to them on how— what should they know about or what should they look for before selecting one?

The very first thing that I would recommend is that they check with their commission or division, department, whoever regulates that area, if it's regulated. Or if it's not regulated, the Better Business Bureau, and check them out to see what kind of either rating as a business they have, or if it is checking with the regulatory agency, see what, if any, complaints cases they have had against them. And, uh, I, those are the first two, you know, free resources that, that I would, uh, jump on.

And those complaints, uh, those cases, are those public record?

Is that right? They, the, um, complaints are public record. Uh, the investigative material, the what the investigator, um, uh, collates and compiles, and all of the investigative material, at least in Ohio, is confidential. Um, and there are a lot of reasons for that. There are other states where it's an open book, uh, and you can see responses and you can see exhibits that have been, you know, documents, files that have been submitted in the course of that investigation. But in Ohio, the complaint and the outcome of the case are both public record. And the division, you know, we have long submitted to the website the summaries of these cases. So you can even do, uh, you know, for old people like me, a Ctrl+F and search on somebody's name, um, if you want to, to see whether or not they've had a complaint.

Where do those get posted in Ohio?

Oh, so if you go to the division's website and Right now they're under License Lowdown, which you may remember I instituted toward the end of my time, and Superintendent Haack has kept those going. Well, then there's an archive, an archive of disciplinary summaries, and you can pull those up. It's not entirely friendly at this point because it's broken down by year or number of years. So you might have to pull up a couple or three to, to see, you know, if somebody's not in one, if they're in another, but, but they're there, they are there. And they are very detailed.

I see them, I see 2023 as the latest entry. So maybe there's been, maybe everyone has been perfectly behaved all year long.

And well, no, having, having attended several commission meetings in 2024 already, I can tell you. Oh, interesting. That is not the case.

In what capacity were you attending?

So interestingly enough, just from a research, I've written my own 3-hour core law and 3-hour ethics courses that are required, as you know, by everybody licensed in Ohio. And so for research purposes often, but then also in my current, in my current role with a particular brokerage, and because of our size, we seem to have, have a few complaints filed against agents, so I have followed those along.

Where could I take your, uh, or maybe I can ask you after the fact if you don't want to promote a specific provider, but where could I take your courses?

Actually, in September I am scheduled to do a virtual offering of the core ethics because it's also, um, an AR requirement year, and I'm approved for both state and NAR. So in September, there should be an offering coming up with Ohio REALTORS.

Wonderful. I wanted to ask you a question about if you think broadly about the role of the Ohio Division of Real Estate and divisions of real estate in general, regulatory bodies, Um, how do you think about the role of government to protect consumers in that capacity versus kind of letting the free market do its thing and chase out the bad actors over time? So for example, if there was a widget manufacturer that manufactured faulty widgets, eventually people would stop buying them and they would go out of business. Now in real estate, because those transactions are so large and so infrequent and so important for consumers, there's some level of regulation there. And I think reasonable people can disagree on what the appropriate level of regulation should be. And I guess I was just curious, having seen many different states, how they do it, and having watched the industry for so many years, like what's your perception on that?

That, that is an interesting question in and of itself. So, you know, we are bound by fiduciary duties as licensees first and foremost, and I will always believe that if there is evidence of a licensee having neglected or purposefully willfully ignored his or her fiduciary duties to a consumer, that should be disciplined at the highest level. There is a reason why those of us who belong to realtor boards have systems in place in those boards to deal with some of the, the less impactful consumer issues. There, there has to be, for the, for the consumer, for arguably the largest life's investment they will ever make, there has to be some accountability. And so that, that is why commissions exist. Over even just the 55 jurisdictions in the United States, I would say that there is a a great variance between what those commission bodies, those commissions, believe is appropriate for a consumer who has been harmed financially. And it's a full spectrum. The good news is that regardless— well, and I'll only speak to Ohio because I'm not— I'm pretty sure that every state has due process that then includes appeals to courts of law, but at least in Ohio, a consumer and/or a licensee have the right of appeal to courts of law clear up to and including the Ohio Supreme Court. So, and we've had cases go that high, some on principle, some I think folks have been chasing outcomes that I would never have given them reason to think that they were going to see. But regardless, that is their choice. That is their choice. That's their right. That's our due process system. And I know that's a really long way of saying it is so varied across the board, and because it also changes with the individuals who sit on, who are appointed to, and who serve on those commissions. And thankfully, it's, you know, it's never just one person sitting in judgment. It is that group. So, and I will just add, because I think it's so, so important to make the point, too many consumers, too many people in the public believe that our real estate commissions are there to protect licensees. Yeah, they are there to protect consumers first and foremost.

Yep. I make that point often when chatting with my peers and even the team here at my company. I guess I have one more question for you. On the topic of fiduciary duties and responsibilities to the public, I think the acronym, if I'm remembering it right, is OLD CAR. Very good. Obedience, loyalty, um, disclosure, um, accounting is the A, um, care, care, reporting. Yes. So, um, I recently came across that again after it had been a few years since I thought about it. I'm very familiar with the, at least in Ohio, I'm very familiar with the specific sort of details around property management regulations and requirements about trust accounts and all these things. But when I came across that old CAR acronym again, I got to thinking again about this fiduciary relationship, this principal-agent relationship we have with our property owners. And I'm wondering from your perspective, as a professional property manager, what are some of the areas that we may be forgetting or overlooking our fiduciary duties? Like, what are some things that may not be explicitly spelled out in the statutes or in the codes But nevertheless, that we should be keeping top of mind as we think about, you know, what's interesting about this property management relationship is it's so long-term. Yes, it's so long. I have clients that have been with us for 8 or 9 years. And so it's easy to sort of forget about this fiduciary relationship. You know, in a transaction like with a realtor selling a house, it's sort of in your face and you have this temporary thing and then you have your next client and But in property management, you get into this sort of monthly cadence and you're kind of doing the same thing over and over. So anyway, that's just a long way of asking about this nature of a fiduciary relationship. How should we be thinking about this? That, that separates us from just another merchant in the marketplace.

I would also ascribe to the C in old car, communication. Sometimes, as you said, there's a cadence that you fall into. You get not, not lackadaisical necessarily, but comfortable.

Comfortable.

And I would say that your owners aren't— they're going to be susceptible to those things too. I mean, it's not every owner that is like calling you and/or emailing or, you know, saying, what about this? What about that? It could be too easy to fall into a rhythm of either lackadaisical or non-communication. I think that that's key because it continues to ensure the relationship is— well, and I just thought of something else along those lines, but it ensures the relationship is headed in the right direction, staying on the right track, and that you are not missing any nonverbals from your owners. And the thing that I just thought of was, it's just me and I know that everybody does it, I despise text communications. Specifically for this reason, because there's too much wiggle room for interpretation. There's too much, um, you know, on the slide as far as not being concise and clear. So, you know, I think that there are oftentimes when I say, you know, besides the duty of care, I think there's a duty of communication, and it ought to be a little more frequent than perhaps monthly or quarterly. It scares me when there's a property management, either individual or firm, only communicating with their owners on the quarterly basis, I'm like, okay, yeah, that leaves 3 extra, you know, 2 and a half extra months of, of, oh, this could go wrong, or I've misunderstood that, or this or the other thing. So, and, and that accounting, the accounting for everything, even if, even if your, your owners aren't necessarily seeming to be involved, or, um, and I'll use air quotes again, care too much about the accounting that they're getting from— oh, they will care, you know, they will care. And it might be at the worst possible time when not, not you. I'm talking in general, obviously, because I know you do everything according to Hoyle. Um, so I've seen way too many cases where we've said, okay, so what happened to these security deposits? And what happened to these requests for you know, repair or replacement. Where are the— where are the receipts? Where are— where's the proof that the work was done? And I mean, and it drags on for not weeks, but months. And then suddenly, an owner is like, well, wait a minute. I think I just spent $10,000 on widgets. That aren't even in my properties.

Yeah, that, that cadence of communication. And, you know, you're right, it is easy to fall into just habits. Just like you said, not lackadaisical, but just, yeah, we've had this owner for 5 years, monthly statement, lease it up. Lease renewals. And it's easy to forget as property managers that the way I think of it is like our actions out in the world, we are— it's like the owner has taken a shard of their power and given it to us temporarily to go, and they've empowered us to act on their behalf out in the world in dealing with residents and dealing with vendors and dealing with accounting, which is a serious thing. It's a serious responsibility, and it's quite different than selling widgets. You know, my customers who purchase widgets, they— I don't have this fiduciary relationship. They have not entrusted me to act in their best interest. Now, that doesn't mean I get to rip them off either. But in property management, especially when you have a lot of clients, like we have around almost 300 property owners, that's a lot of little shards of agency that we now hold in our hands and have to balance against, you know, tenant, landlord-tenant law and other regulatory agencies like HUD. And it's a lot. And I implore property managers to to take that seriously. And then I'm saying this as much as a reminder to myself.

So, but I absolutely love the fact that you hit on what I was going to follow up on, and that is in your clients', your owner's best interest, not in your own. And there, I think there are, there's room for improvement in that area. Because it's such a rote relationship so often. You know, new management agreement— hey, is there anything that you would want to change? Is there anything that you can think of that would, you know, better protect your interests? What about this? What about that? Be more of an advocate for your owner, um, at those points in time as well.

Absolutely.

And I love the shards of authority analogy. Yeah, because they can come back to stab you.

Yep. Well, thank you so much, Anne. This was a wonderful conversation. I really appreciate you coming on the show today. For folks who may want to follow along with what you're up to these days or just keep up with Ohio licensing law or anything along those lines, what are some— how can they do that if they wanted to keep up with you?

Oh, well, absolutely. I am on Facebook and on Instagram, OH Real SUP-T, and and Anne Pettit on Facebook. So, yeah, absolutely. And to follow along with, with any changes, the Ohio Division of Real Estate and Professional Licensing has a fantastic website, and I would highly, highly recommend that you sign up for their newsletter. It's, it's free, it's electronic, And all you have to do is provide an email address and then make sure that it doesn't go to your junk.

All right, thanks so much, Anne.

This was great. Thank you so much. It was really great to see you, Peter.

If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website peterlohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.