10 Steps to Better Manage Crime Risk in Apartment Portfolios

By Jay Harris

      Criminal behavior on one of your apartment properties can harm community livability, reduce your property's value, or worse yet, leave you liable for damages. But with a little planning, you can implement a crime safety program that will reduce your risk substantially and make your residents much safer at the same time. New and effective crime reduction programs that apartment owners nationwide are implementing include physical security, landscaping and design, resident and employee screening, effective partnerships with law enforcement, and resident safety awareness programming. The results are beneficial to properties, even those without a history of crime on the property. The rules are also changing. Changes in statue have made new screening tools available, new case law has made it easier to evict some residents who house criminals, and business developments offer crime-free programs that can reduce liability risk. To help put your options in perspective against this background, here are 10 points apartment owners may want to consider as they review their existing property portfolio and procedures manual.

1. Screening residents and employees.
      Manager/owners are finding benefits in screening residents and employees for prior criminal history, although resident screening is probably still practiced by a minority of owners. Though courts generally do not require resident screening, some owner/managers promote criminal background checks as a benefit of living in a particular community, while making clear that the checks are not a guarantee of security. Some apartment companies that do not do resident background checks do screen prospective employees, especially employees given access to residences. Employers have been sued successfully for "negligent hiring" and "negligent retention" where no background check was done before an employee was hired and that employee subsequently committed a crime. The quality and speed of availability of criminal history information is rapidly increasing. Private companies are upgrading the technology that delivers criminal history information, and soon they expect to deliver a product that will permit real-time availability of crime history data. Already, in-state criminal history information is available in two days or less in many states. However, many owners and managers find searches for out-of-area criminal history information to be prohibitively expensive, and thus, where they are done, background checks often consist of a search of local area or state records only. Though we're not there yet, we are perhaps a year or so away from having a searchable, national database for cost-effective, national criminal background checks.
      Thanks to the Quality Housing and Work Responsibility Act (QHWRA), owners of Sec. 8-assisted properties and those with Sec. 8 residents can now go through their local public housing authority to access the national Crime Information Center (the federal law enforcement crime history database) in order to screen prospective residents.

2. Educating residents about their responsibilities.
      Resident education programs are an increasingly popular way to communicate to residents how to avoid higher-risk situation. Often taught in conjunction with local law enforcement officers, these education programs address how to think about personal safety, how to use safety features on doors and windows, and community safety policies. In some cases, defendants' resident education programs are an effective defense against plaintiffs' arguments that a crime victim who was a resident believed that the apartment owner had the sole responsibility to provide security on the property. As a result, owner/managers should check with their liability insurance provider to see if resident education programs lower liability insurance costs. "Safety Begins With You," a pamphlet available from the National Multi0Housing Council and the National Apartment Association, has been distributed by apartment firms to make thousands of residents more aware of their safety responsibilities.

4. Understanding the state's legal standard.
      Traditionally, an owner/manager owes the duty to his residents to exercise ordinary care to maintain areas over which he has control in a reasonably safe condition, rather than the duty to act as a policeman or an insurer. In other words, as a general rule, an owner/manager does not have a duty to protect a resident from a criminal act by a third person. As of this writing, courts have generally not found apartment manager liable for failing to undertake a background check of residents. But the scope and nature of security precautions that a court expects an owner to take vary significantly from state to state. Companies should remain informed about the legal standard for premises security that applies in the state they operate in.

5. Implementing a design audit.
      By evaluating a property for potential areas of crime, a company ensures that outdated design features and overgrown landscaping do not needlessly create opportunities for crime. Even newer properties build in the late 1980s and early 1990s can benefit from design audits that suggest improved security features. Depending on the circumstances of the individual property, the local crime rate, and business competition in that market, some combination of perimeter gating, revised entrance/exit points, video security monitoring, electronic key entry systems, and parking and exterior lighting security features may enhance property values and lower insurance costs.

6. Reviewing emergency response and community relations programs.
      Good portfolio risk management programs address the property in the context of the community around it. First, what emergency response program - including resident relations, media interaction, and employee protection - is in place today to respond to various crime scenarios on or around the property? Has this emergency response program been applied in hypothetical scenarios that might impact the property, such as cases of employee violence, eviction-related violence, domestic relation/retraining order situations, and well-publicized, near-the-property violence? Finally, what proactive community outreach steps are being taken now to build relationships with law enforcement in case they are needed later?

9. Evicting problematic residents.
      Some federal courts have recently upheld the right of a housing authority to evict public housing residents whose guests or family members have committed crimes on the property, even if the evicted resident was unaware of the criminal activity or was unable to prevent the guest/family member from committing the crime. This result may be useful to conventional-market apartment managers who are seeking to evict residents whose guests and family members may be committing crimes.

10. Understanding new property owner protections from asset forfeiture.
      In April, President Clinton signed into law important bipartisan legislation that would clarify the "innocent owner" defense for property owners in defending civil asset forfeiture claims against the federal government. For the first time, the government must carry the burden of proof in an action to recover, say, an apartment home or property that has been the focus of drug activity.
      Property owners who notify law enforcement of illegal activities on the property and take steps to revoke permission for illegal actors to use the property will qualify for the innocent owner defense. The owner/manager is not obliged to take any steps, however, that would subject him or her to harm. Under existing law, law enforcement officials use an owner's notification to law enforcement of the illegal activity as grounds for forfeiture, on the argument that the owner was aware of the criminal activity but had not taken adequate steps to end it. This new law will clarify the steps an apartment owner can take to manager crime risks in the portfolio and may improve communication between owner and law enforcement about drug and other illegal activity.