We live in a globalized economy, and many of us want to expand our horizons on an international level. For example, according to a report by the National Realtors’ Association, foreign buyers investing in residential properties in the USA has built up to a dollar volume of $53.3 billion. At the same time, international property management has become quite complicated. Managers now have to grapple with and navigate through various legal and regulatory frameworks to operate successfully.
Different countries have different real estate laws which makes things even harder. Moreover, enforcement also varies from one nation to another. So in order to find success, managers need an in-depth understanding of these regulations.
The first step managers take when looking to manage such a vast portfolio is researching each country’s specific own property management laws and regulations. With this step they get a better sense of what it takes for owning, renting, and maintaining properties in that jurisdiction. They can then build on this by keeping up with frequent changes made which might affect their operations.
A Solid Legal Toolkit is Essential
If you’re a property management company trying to manage properties internationally then you’ll need a solid legal toolkit. This will give you the resources needed while tackling common obstacles efficiently. The toolkit itself should contain plenty of different strategies like access to legal experts in foreign countries, policies that work for any legal system across borders, and ongoing training to understand how international law works at its core.
Having this toolbox is not just about compliance. It helps grow trust within different markets and develop relationships with tenants and local authorities.
For example if a U.S manager wants to expand their properties or services into Canada they would use documents explaining all the differences between landlord-tenant laws there, such as the distinct provincial regulation around rental increases or evictions.
Using this knowledge local expertise, they could then alter lease agreements so they comply with Canadian law such as Ontario’s Residential Tenancies Act, which outlines very specific rules for residents who live there.
Understanding Laws In Different Countries
Overview of Legal Systems
On an international level, there are four main categories of law: civil law, common law, religious law, and customary law systems. Many nations operate using a mix of these, known as mixed legal systems. Civil Law is primary in Europe and Latin America where it relies on comprehensive statutes and codes. On the other side of things is Common Law which is used in the UK and its former colonies. Here, case laws and judicial decisions are what common law follows as its cornerstone.
The United States almost entirely follows common law just like the UK but there are some differences in tenant laws due to different legal traditions and statutes.
For instance, in the UK, eviction processes are typically governed by standardized rules such as the Protection from Eviction Act 1977, which requires landlords to provide tenants with a notice period and obtain a court order to proceed with an eviction legally. There is also a deposit protection scheme wherein tenants’ security deposits must be placed in a government-approved investment scheme.
In the United States, eviction procedures require proper notice and court proceedings. But the details of notice periods, grounds for eviction, and security deposit handling are set by state law rather than federal law causing things to fluctuate from one state to another. For instance California has stringent tenant protection laws with a clear delineation of just cause for evictions while Texas’ property laws are considered more landlord-friendly.
Comparison of Common Law and Civil Law Systems
Understanding the difference between common and civil law is paramount for property managers. When it comes to resolving disputes with property owner, case law is used in common law systems while statutes and codes are used in civil law systems.
Dissecting Mixed Legal Systems
These systems offer challenges that can be navigated when you understand how they work. Sometimes property managers may need to use a combination of statutory laws and case laws. The payoff comes with creating strategies that help your team and properties grow using the strengths of both methods.
Tenant Laws From All Over The World
Different places have different rules. This means that even though tenants don’t own the property, some countries grant them the power to negotiate on very lenient terms with their landlords. Property managers must know these terms so they can draft leases that abide by local market customs without putting their client’s interests at risk.
A lot of people look at Germany when talking about tenants being given more rights than landlords. When dealing with German real estate, you can expect to see:
- Eviction notices: a very long, multi-month process;
- Leases: as long as tenant’s desires (rent increases indefinitely capped);
- Rent hikes: only if landlord proves they’re not doing it just for money; and
- Long-term lease advantages: less taxed than short ones
Evictions And Disputes Internationally
Flexibility is key when it comes to the management and dealing with a range of legal frameworks. Property managers should create broad policies that fit many general principles, but can be tailored to the specific area they serve.
Dealing with Rapid Changes in Regulatory Landscapes
Regulatory landscapes are constantly changing due to political shifts or ground-breaking market events. Managers need to stay up-to-date on these changes and know how they’ll affect things so that policies can be adapted accordingly – quickly.
Making it Out of Legal Mazes
Anyone who has been in property management long enough knows how challenging it can be to manage various locations under different laws. However, where there’s a will, there’s a way — as proven by those owners who’ve managed to overcome great hurdles while doing so.
Advanced Preparation and Continuous Learning
Being ready ahead of time makes everything easier. Even if you’re not in international property management, it’s always good to update your knowledge. Managers should always foresee what new laws are coming up so that they don’t hit them out of nowhere further down the line where they won’t be able handle them properly.
True, it is difficult to keep track of international developments in the hustle and bustle of daily life. Many property managers run a business along with a separate full time job. There are many podcasts, courses and resources offered by companies that provide services related to international property management too. These free resources are an excellent place start learning. Good luck!
