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Property Management Mastermind Show

#159: Why Your Property Needs PetScreening Ft. John Bradford

Dec 27, 2022 by Brad Larsen

If a dog is man’s best friend, PetScreening is your property manager’s best friend. Whether you have tenants with pets or not, implementing the PetScreening service will make your property management world much easier! This episode features John Bradford, the CEO of PetScreening, and dives into the need for quality pet policy and management for your properties. 

Connect with John and the rest of the PetScreening team at https://www.petscreening.com/

Connect with Brad's team at www.rentwerx.com!

BRAD: Everybody. On today's episode, I've got John Bradford from Pet Screening. He's going to be giving us the update on what's going on in the pet screening world. You've got to listen.

ANNCR: Welcome to the Property Management Mastermind show with your host, Brad Larson. Brad owns one of the fastest growing property management companies in San Antonio, Texas. This podcast is for property managers By property managers, you'll hear from industry leading professionals on best practices, new ideas, success stories and lessons learned. This is your opportunity to learn about the latest industry buzz surrounding property management, as well as tips and strategies to.

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BRAD: Welcome, everybody, to another edition of the Property Management Mastermind podcast. I'm your host, Brad Larson. Now today's guest I have a repeat guest on and he is one of the best ones I'm going to talk about. He is he is a model citizen in the in the property management world. His name is John Bradford and he's coming at us with pet screening. And pet screening is a great product. We use it here at Rent Works and I highly recommend it. So what we're going to talk about today is introducing Mr. John and he's going to talk to us about who he is, what he's doing with the pet screening. And of course, you've got to understand he's one of us. And so I want him to start off with that. So John, please give us a few minutes of your time and tell us who you are.

JOHN: Yeah. Hey, Brad, first of all, thanks for having me back as a repeat guest. So it's been a while and congratulations to you and all your success on the show as well. So, you know, you're right. I love to tell people that pet screening was started by a property manager for property managers. So I, I started a property management company. I got a real estate license in 2003. So almost 20 years ago, I started buying investment properties for myself as a hobby, kind of as investment vehicles. And then other people that I knew asked me to do the same for them, but only if I agreed to manage them. And so I started a company called Park Avenue Properties, which is based out of Charlotte, North Carolina, and grew that company to kind of a sizable single family residential property management shop. We manage not only single-family residential assets for what I would characterize as, you know, professional investors who have other jobs. And these would be the IBM ers, the the Ingersoll Rand people just who want to use money and buy assets. But also we were doing it for some of the large REITs. That whole institutional space was just getting off the ground and we were there to help a lot of them do their management before they eventually internalized. So yeah, I've done property management for a long time. I have all my designations through Naropa. I was on the Naropa board for, I think, I don't know, seven or eight years, it seems like. So I truly understand property management and even to this day I still am a property manager. And I, even though Park Avenue has now become a part of a different organization, I still am an investor in that company, so I still very much have a property management hat and still own my own rentals, by the way.

BRAD: So sizable. That's very modest, John. I mean, you guys had a pretty big organization, so if I'm going to twist your arm a little bit, tell us the numbers you were at when you did decide to move to Pure.

JOHN: Yeah. So I think when we sold, we were just right at, I don't know, 1400 doors are the height of the company during the institutional stuff. We were several. We were I think about 3000 and change, you know, but we had maybe 19 employees running that we were in a handful of cities and we're in Charlotte, North Carolina, which is a border city to South Carolina. So it was very easy for us to go across the border. So we are managing some assets outside of the Charlotte market. And and really the only reason I decided to sort of hook on to something different was frankly because, you know, we need more horsepower for us to really grow the way we wanted to. We were looking for a vehicle to help us get to those heights. And so when an opportunity came along, I jumped on it, but I wasn't necessarily ready to exit, which is why I put my money where my mouth is. So I'm actually an investor and limited partner in that company.

BRAD: Yeah, that's pretty neat. So that's a really cool exit. I mean, we could spend we could spend all kinds of time unraveling that because you built it up, you sold it, you've come full circle and then you reinvested in the acquirer. I mean, that's that's kind of like saying, yeah, I mean, I believe in you guys so much that I'm going to put money exactly back into the organization that you just left. Really cool stuff. And so I'm sure one of the your decision points and that was so you could turn around and focus more effort on pet screening because it's done really well so far. It's taken off the ground, but there's probably a lot more spaces that you can get into. This is where we want to take the conversation. Next is we want to hear more about what pet screening is up to, because just in the green room where you mentioned that you've gotten all kinds of updates just in the last couple of years and more for us to talk about. And I actually had to cut you off. I'm like, wait, wait, wait, Save all the magic for the episode, man, because this is really you were going down that track and I wanted to just kind of open it up to you and let's hear what you got going on with pet screening.

JOHN: Yeah, so I mean, pet screening, right? I told you this was an idea by a property manager for property managers. And, you know, we have grown tremendously. We are we have 27 full time developers now and we have 70, I think the latest count, 73 employees in our office. So we're flirting with right at a little over 100 total people dedicated to the organization. We are, you know, we've we've come along saying we've come a long way, baby. You know, we've had a lot of fun When I started pet screening, Brad, interestingly enough, you know, the product today, we haven't had to do any pivoting because the product that I wanted to create is exactly what we created. I'd say the only large difference that we've added since I launched the product was that we were really just screening pets and assistance, animal service, animals, essays, etc. And I really wasn't focused on people that don't have pets. But the problem is a lot. Of your non pet owners actually create a lot of the problems because they go and get pets and that you don't know about. Or more importantly, they have visitors who come over every weekend and spend the night and then those visitors bring their pets. So we added a sort of what we call a no pet profile, so a no pet product. So now pet screening, when I say now, this has been for the last four of our six years. The first two years we did not have the no pet profile. But for the last four years, we now have a no pet profile which gets every one on the record.

JOHN: Even if you don't have a pet that you understand not having a pet, there are still pet policies you must follow, such as no pet fostering, no pet visiting, no pet visitors. All of those things which are incredibly important to the liability of a property manager. And so that's been something that we didn't add out of the gate, but we've added it since then and it has been a tremendous success. We have property managers, Brad, you know, that have actually told us they're avoiding lawsuits because there was a dog bite by a resident that said they had no pet, but yet they had one. And when they were able to produce the fact that a no pet profile, they were able to get themselves excused from the lawsuit. So we know this has been tremendous value for our customers, which has been really fun to see, because this idea, Brad came from another property manager. The Nopet profile came from another property manager saying, John, we love your product, we love the Pats, we love the assistance animal part. But I really have problems with people that I know said they don't have a pet, but I see them walking them on site. This is a multifamily one of our multifamily clients and she's like, How do we stop the people that we see them walking their dog? But yet we know they told us they didn't have a dog. How do we address that? And that's how this idea was born, which has been a lot of fun.

BRAD: So that's like part of the process. Now as far as anything, when they do the application, the no pet process can be interjected right into your regular application processing, and that could be with any of the softwares or outside of it either way. But it's something that you can put in front of any applicant, Am I correct?

JOHN: Yeah, you're right. In fact, what we say is every single applicant you have, we'll go through pet screening period, because every applicant is either going to have no pet, they're going to have a pet, or they're going to seek a reasonable accommodation for an animal. They fit one of those three lanes. And of course, you know, we don't we don't charge people without pets, any kind of money. There's no cost. So it's free for them to do it if they have no pet, but they still need to do it to get them on the record acknowledging that they understand your policies. And so, yes, it's a simplified way of doing business with us because now every single applicant should go through pet screening even if they don't have a pet.

BRAD: Because then it'll also inform them, okay, here's here's the ramifications of getting a pet. I mean, it's not the end of the world. Inform the property manager you can sign a pet addendum or whatever it's going to be in that particular area and state. Maybe you pay a pet fee, maybe pay a pet application, but there's things that can be just put out there because a lot of them, especially in apartments, you know, they can be right out of college and they're thinking about getting a pet. Right. And so now they know, okay, if I get a pet, it's fine. I just got to go through steps one, two and three and everything is fine.

JOHN: Yeah, we have several. I mean, it happens all the time. People will move in with the no pet profile because they don't have a pet, to your point. But six months into their residency, they all of a sudden want to go get a pet. All they do is they make sure it's okay with their property manager. Then they log back into pet screening. They convert their nopat profile to now a pet profile. They go through our screening process, they pay the nominal fee because now there's a pet that's being screened, so they pay us a nominal fee for that. And then the property manager gets the results of that. And now the property manager, to your point, can do a lease addenda and start charging pet fees or pet rents or whatever it is that property manager has worked out with them.

BRAD: What have you seen? What have you seen to be one of the biggest concerns with property management companies? Is it the Isa's? Is it the no pet profile stuff? I mean, what are you seeing out there as one of their biggest challenges and concerns?

JOHN: I think there's two that rise to the top. I mean, one is the continued complexities around assistance, animals and housing. People conflate it with the ADA and public accommodations all the time. You know, they they still accept paperwork that certificates and registrations that frankly really don't, you know, are not required. They don't meet they don't don't mean anything and the context of housing. But the property managers don't know any better. So once they start using pet screening, they sort of alleviate all that. And we we take the wheel from their hands. So that still continues to be a very, very popular reason as to why people use our services. The other one is really around revenue and breed restrictions, or maybe I should just say pet restrictions in general. You know, we now, because of our FIDO score, which we trademark kind of clever Fido score, you know, we provide a Fido score on every single pet. And the reality is property managers can now be more pet inclusive, meaning they're willing to maybe take those remove those restrictions, whether it be weight, age or maybe even breed, and then just use the FIDO score to make better decisions, whether it be an acceptance decision or a denial decision, or maybe just how much they're going to charge, whether it be a pet nonrefundable fee or a pet. Deposit or even just monthly pet rent. They use that FIDO score and we're seeing more property managers make significant revenue by being consistent and standardized in how they approach all pets across all their properties. I mean, Brad, we have organizations that are in 21 states that use our service so they don't have to worry about, well, how do I do it in this day versus this day? They can just be more consistent. And a lot of our friends that you and I know more and more people are going into other states and they're crossing state lines and, you know, they're they want something to be able to be standardized across their entire portfolio. And that's what pet screening brings to the table.

BRAD: Yeah, two points on that. So I'd like you to explain the FIDO score. But to your other point is the the property management company entrepreneurs, they're expanding across state lines big time. And for example, pure your organization that you're working with now that acquired your business, they are dealing in I don't know how many states at this point. They've been one of the fastest growing entities I've ever seen. Yes, but if you don't believe me, get on the Facebook and say you own a small company in Florida or you name the state in Rhode Island or wherever, and say, I want to sell my company and watch all these people from out of state, just like barrage that person and say, I'll buy it. I live in Arizona, but I'll be gladly pay whatever you want to own your management company in Rhode Island. That's right. And so that's been that's been a funny phenomena. But circling back, I want you to explain the Fido score, because that's really in essence, I mean, it's kind of a genius thing and it takes a lot of the pressure off of the management company in classifying that particular pet. I want you to explain that.

JOHN: Yeah. So, I mean, for years it was this tool called like rent yield and you could fine tune your rents. Well, this is really just fine tuning your pricing as it relates to pets. And of course, you know, different states have different rules around what you can or cannot do. So notwithstanding the rules you have in your state, we we don't make that pricing decision for you. We just give you a tool to be able to do that. And I'll give you an example. So our Fido score, everyone knows Google's reputation management is 1 to 5 stars. Everybody knows that. So rather than reinventing a scoring metric we do, we use the same type of methodology. We're one, two, five paws. So a five possible score is similar to like a five star score and like reputation management, that would be a pet and a pet owner together that have what we would characterize as the lowest risk. And if you have a one, the lowest score we offer is a one poor score and a one poor score. Brad doesn't necessarily mean the answer is no, because that's the property manager's decision to make. We pet screening does not even say yes or no. We never say that. We just want to show you there's more risk. And the risk isn't just about, is this dog going to bite someone because no one has a crystal ball and not even pet screening can predict what if a dog is going to buy.

JOHN: In fact, Brad, all dogs buy it. We hear more complaints from Chihuahuas biting maintenance people than we do The other list of breeds that you traditionally people worry about. However, we look at what we call housing related risk. And I'll pick on my dog. I have an Australian shepherd. Australian Shepherds are working dogs, they're energetic, they bark, they run, they can be have some anxiety where they want to get behind you and nip you on your behind because they're trying to hurt you. And so, you know, that type of dog is going to have a Fido score that probably is not as favourable as a dog, that has a characteristic that is lazy and sleeps all day, just to kind of use a simple example. And so a German excuse me, an Australian shepherd needs to be walked. It needs to be, you know, when you come home you've got to go take it outside because of this pent up energy. So the housing related risk for a Australian shepherd, for example, is going to be much different than the housing related risk for a Shih Tzu that is just known to kind of be a little sweet, fluffy dog that just pretty much rest and sleeps all day and maybe occasionally chases a tennis ball if you throw one. And so that's what the Fido score is all about, but it's just not about the pet. Brad We're looking at pet owners as well. Pet owners and how they behave with their animals is incredibly, incredibly important.

JOHN: And I'll give you an example. A lot of cat owners do not vaccinate their cats regularly. And you and I may go, well, Och, what's wrong with that? Well, if you're renting from someone and you have a cat and you've decided not to vaccinate them and a maintenance person comes in and that cat scratches or bites them and that does happen. I have a cat that's a biter. He literally attacks people when they come visit. It's the craziest cat you ever met. But these cats do exist. And if a cat bites you, cats have more bacteria in their mouth and even dogs. Well, now you have an unvaccinated cat bite. So now the cat, if it gets reported, would have to be quarantined. There's going to be health bills for shots. So our Fido score for a cat is looking for things such as is the cat even vaccinated. And and and we even ask the pet owner, a cat owner do you vaccinate your cat regularly? And you would be surprised how many people say no. And then we say, why? And they say, well, my cat's an indoor cat. And it's never it never goes outside. And, you know, just really don't have a reason to. Well, we don't necessarily say that's a bad policy for them, but it is more risk for the property manager and our FIDO score. Win, adjust and point that out accordingly.

BRAD: So one of the things I want to bring into the conversation is telling people how we've implemented the FIDO score. So when we send someone through the pet screening model and we get a paw back from them, this is Rent works in San Antonio and Austin. We manage about 100 homes. And so when we get that poor score back, we equate that to a certain pet fee. And a fee is a I hate to even use the term nonrefundable, but that is the definition of a fee. It doesn't come back to the person paying it. And so where I'm going with that is with the poor score, you can scale those fees accordingly. So a five paw would be a lesser fee and then right up the staircase, you know, a little bit higher fee for every single poor score. So your one poor score could be your highest fee, your five poor score could be your lowest fee. You guys get it? I'm not going to mention numbers in this podcast because I don't want to go there, but you get it. You just elevate it like a staircase. That's right. And so the way you make your owners whole, this is what we've done because we've implemented a owner pet guarantee. So you can call it an animal guarantee, you could call it some sort of animal warranty. You make the owner's whole and you keep the pet fee. And so the owner is looking at whatever guarantee you're offering them. That could be, you know, one figure or it could be four figures, whatever. You insert the numbers in your head, that's actually a better deal for them than taking on that small fee or taking on that small deposit, which is another legal landmine, taking on another deposit to refund out back with your security deposit, because if you get those too jumbled now, an attorney is going to beat you up even further to say you're mixing and matching and you don't even know what your accounting is.

BRAD: And so, you know, we encourage people to necessarily try to get away from security deposits, at least I do, in what we're doing and to get away from pet deposits. So I wanted to bring that up because darn it, the pets, the FIDO score, the PET score is a great way to put that decision at arm's length from a management company. It is. And so I think I think that's good for rent works and that's good for the industry. Just say, look, they've got an algorithm built in. This is a nationwide company. They're in all these different states, all the different markets. They've got a team of attorneys that have gone through this 1000 times, and this is their decision. Your your score comes up with as a three poor score. And so then that's assessed a certain monthly fee. But there's interesting enough as you bring up the non pet profile ones and you know that's that's something that's not out there very well and it's kind of newer to me. I might have heard about it. It just didn't resonate as much as, you know, in this conversation now. And that's a really interesting way that you take somebody through that process to potentially educate them, say, hey, if you do get a pet, this is what it's going to be. This one is going to cost either the ramifications and it can be done. So that's really neat stuff.

JOHN: Yeah, there's two things I want to add about the Fido score. We have a zero poor score that we we leave that to the property manager. We never score anything below one, but we understand property managers still have some rules that they have. So if for some reason, Brad, you know, we'll say you're coming. Let's say you said we don't allow German shepherds. I'll just pick that as a breed. You could actually set German Shepherds to a zero poor score. And when a German shepherd comes through, we're going to alert you that it's a zero paw. Now, that zero paw could be a denial criteria or maybe a zero paw is just another $100 fee that you're going to charge on. That zero paw is just another indicator. But pet screening, as a company, we don't score anything zero out of the box, but we give you the flexibility to create a zero score on age, weight or breed. Those are the three things you can score a zero on. And then the other thing we've added in the last two years, because we're talking about some new additions, is we now have this thing called our Fido score calculator. So a property manager can actually come in, set up our tool once and only once, and they can go through each score and pre determine what are the fees for pet rent, for pet deposits if they do deposits or nonrefundable fees, we give you all three lanes. Once you set those numbers and save them, then pet screening will actually return the pricing back to the customer so that you guys don't have to do it.

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BRAD: Now, one thing I want to talk about on the risk mitigation stuff for any sort of a restricted breed. Yes. And so this is what we do. I don't know if this is right, wrong or other. I think it's been working for us for years and years, but we have a restricted breed list. And if one of those animals are on there, we make them pay a higher fee, of course. But then we also demand that they go out and get pet insurance. So maybe this is something you can comment on. Maybe you're more of an expert than me on it. We make them go get it. I know that's kind of like a rotten way to do it, but we can't recommend an insurance company to go get pet insurance through because it could be 20 bucks to 200 bucks a month. We don't know. And so we make them Google it and then bring us back in some sort of pet insurance policy. And I don't know if that's the greatest method or not. I mean, what are your thoughts on it?

JOHN: Yeah, well, I will tell you. I mean, you know, it's your shop and you get to make the rules. And as long as we're talking about pets here, if they have a type of household pet and it falls into your list of breeds that you want more risk mitigation and you say, hey, you must deliver back to me an insurance policy. I mean, it's your rules and you still selling. You hold the gold, you make the rules, and so you're making the rules. And so that is an effective way to help cover yourself if you if you most certainly want to you know, if we're talking about an assistance animal, you would not want to require them to go get insurance. And I know that's not what you're talking about. We're talking about pets here. So that's Fair Game. And that's a great example of using. You could set all of maybe you've already done this, but let's say I know there's multiple breeds you probably have, but let's say it's a pit bull, a German shepherd. In a while we use those three breeds. You could go into pet screening, you could set all three of those breeds down to zero as a zero paw. And then in the Fido calculator, you could set all three of those at your highest fees possible, whatever you decide. And then you could also follow up with them and require them to have insurance if that's what you chose to do, you know, So that's but you would have to set those three breeds to the zero score. And what happens is when you get the score back, zero sets off a very bright sort of red bar. So that sort of pops out So your team knows, Oh, oh, we've got a red bar here. That means it's one of our three breeds. Therefore we know we're going to require an insurance policy.

BRAD: So you're in the space, I mean, quite a bit. You're like the one expert in the pet screening world. Have you seen any really good insurance solutions for pets?

JOHN: So, you know, there are folks who seem to be starting to want to offer some pet liability. You know, our friends over at Second Nature, I think they have a policy now that has some pet liability. There's two insurance insurances we're talking about. One, we're talking about the rent, the liability for the the renter themselves. And then you have pet health insurance, which is for the well being of the pet. So this is all about the liability. You know, there are a handful of products. I'm like you. We don't get into endorsing any of them because we don't want to be picking winners and losers amongst the insurance. But I do know that there are a handful out there that seem to be working. And second, nature has one that kind of comes to mind. I don't know the name of it. I can't think of it at the moment, but they're out.

BRAD: There, which I did. I bet that's tied into their their tenant liability policy. I think it is. So I mean, we have the master tenant liability policy and the second nature, you know, they're doing the same type of situation. I think what they're putting together is a pretty good program as well. And on top of that, I think they probably have baked in a little bit of pet liability insurance and it might be limited, but that stuff can add up pretty quick. Man, you got an approved pet in a home and that approved pet does something bad like what you mentioned, you know, cat scratch or somebody a dog bites somebody and it can get ugly. I mean.

JOHN: It can you.

BRAD: Can get.

JOHN: Expensive.

BRAD: You can get sued for anything at any time. It's a crazy world we live in.

JOHN: You're exactly right, Brad. And that is why, frankly, companies that use pet screening, you know, we can't stop anyone from being sued. But the fact that you have people on the record acknowledging your policies, you know, that no pet example, you know, they have to acknowledge it, that if they ever get a pet, that they must tell you about it in writing. So if they go get a pet and they don't do that, and then that dog goes and bite someone, number one, you don't even know they probably have the dog. And you can show that because you had a no pet profile. And number two, they acknowledge that they knew the rule was they had to tell you about it and they didn't. And so that removes a lot of liability from you. And then the owner that you work for, right. There's an owner that's hired you to represent them. So that kind of helps them as well. So that brings more value back to your owners as a property manager. And we have some property managers that lead with when you use our management services, we're going to help you make sure you don't get these fake essays. We're going to make sure that we get everybody on the record. They don't necessarily talk about pet screening, but they're using that as part of their business development pitch.

BRAD: All right. Let's talk about the essays. I always go down that because you probably have all kinds of stuff to tell us about, you know, updates and challenges and legal battles and horror stories. I mean, I just want to open it up to you is tell us everything you know that you can you can tolerate talking about. I know it's probably going to be a four hour podcast, but.

JOHN: Well. Well, you know, what I'll just say is this. I mean, look, there is no reason a property manager should be doing this on their own, not with pet screening here. I mean, we're we're a free solution to property managers. As long as your pet friendly, you got to be pet friendly. You don't allow pets. I can't help you because we've got to make revenue somewhere. But if you allow pets, we can take the heartache and the challenges off of your plate as it relates to assistance. Animals. If you go at it alone, there's nothing wrong with that either. It's just, you know, you've got to understand what you're doing. And I will tell you that there's a lot of confusion out there between service animals and support. Animals, like an essay is a type of support animal. There's two different review processes, processes for each one of those. So you have to kind of know if it's a service animal, what am I allowed to ask and do versus a support animal? If you use pet screening, we handle all of that for you and we handle it for you in all 50 states. So if you are one of those companies that have assets in multiple states, it's just another thing off your plate. And, you know, we have you know, we have what I would characterize as a solid relationship with HUD.

JOHN: Our chief legal counsel provided a white paper to HUD based on their their document that came out in 2020. I think we're the only organization actually, I wrote a white paper. We had HUD review it with us to make sure that we were exactly on task here. We have reviewed over 280,000 reasonable accommodation requests. That's today. And that's a huge number. I mean, 280,000. And of those brand of those 280,000, only about 110,000 of them actually met the standard. So that means 180,000 of them did not meet the standard, which means the property manager can treat them as a pet, which means you can charge pet fees if you decide to take that particular pet. This is an incredible, incredible set of results that we're delivering for the industry. We're not only are we a free service to you, but we help you make sure that people who meet the standard actually pass that test and meet the standard and then people that don't meet the standard. We're the ones that tell them that they don't meet the standard and you don't have to do that. And then you can move ahead with a pet and a business as usual fashion. And I mean, we have so many examples of fraud that we find then not always as a fraud, right? A lot of times, honestly, it's just people don't have sufficient paperwork to meet the standard and they choose not to go finish the process and they'll just convert it to a pet and move on, which is absolutely fine.

JOHN: That's good for the property manager because that person is moving ahead as a pet. But in no way is pet screening punitive because we'd never set out to be punitive. We just set out to say, Hey, here is the Fair Housing Act and the HUD guidelines, you must follow those. And if you follow those, this is no problem. And if you don't meet those or don't follow those, then you're not your reasonable accommodation cannot be granted. And that's not because pet screening made the rules. It's because pet screening is making sure that everyone understands the rules that have been set forth by these agencies and that they follow them. And that's really a very simple explanation of what we do. But it gets very complex. We get dog bite incidents that we have to investigate and we're looking at what was it a provoked incident or non provoked incident? Because that matters because you can decline a reasonable accommodation if the pet and the specific pet has proven to be dangerous to its immediate surroundings. But that would then lie the question or raise the question.

JOHN: Well, if it bit someone, why did it bite that person? It's different if a dog bit someone because someone was kicking it, well, that'd be protecting itself. It's different if the dog ran off its lease and went across the street and bit someone that would be an unprovoked entity. And we we are legal team gets into those details and the property manager can just wait on us to go do that, that that particular work. And that's just part of the types of things we do. And plus the biggest thing, Brad, is we call the health care providers. We contact every single health care provider to make sure the documentation is in fact authentic and that that person has that that provider has personal knowledge of their patient. You know, we don't inquire to what their disability is. That's none of our business. But we are making sure these health care providers do, in fact, issue the letters. And this is where we find a lot of fraud. We find providers that go, you know what? We issued that letter a decade ago and it has a date from last week. This letter has been altered. And so we're the ones that are running the front lines, all for our clients at no cost as long as your pet friendly.

BRAD: I think there's a little bit of pushback finally, that's being acknowledged in the essay The Emotional Service Animal World, They stopped allowing miniature donkeys on airplanes. And yeah, there had been some crazy stuff that we've seen. And a lot of times you post some of that stuff on social media, so we get to see these crazy stories. And so it's interesting to see that it's the pushback is becoming more prevalent. Our local attorney, they came out and did us a whole presentation. Robert Brown came out and presented to us like all the GSA updates and all the stuff about that. It's local, Texas based. So we got my team got to hear that. And yeah, I mean, there are situations where we may have to send over a letter to your team or even to him if it gets. Even worse. And they're going to look at some of these things. And we're seeing the pushback. And the pushback is winning. And you probably have 1000 stories, but is there one that's just super egregious that top of your head, you're thinking, oh, I can remember this. Oh, yeah, TSA applicant. And go from there. You're smiling. So let's hear it.

JOHN: Yeah. So this is well, this happens actually more more frequently than I than I would care to admit, but it does. So there used to be a a provider out of California and I won't name her, but she was very well known for issuing a ton of these letters, but she did follow the guidance. And even HUD, we had a conversation about her and even HUD sort of tongue in cheek said, we're familiar with this person, but she wasn't necessarily breaking the law. And she was she was a health care provider. She just happened to do a high number of these reviews. But even still, that doesn't make mean it's impermissible. Well, sadly, she's she's deceased. She passed away not not related to COVID, unrelated, but she's no longer with us. But we still get letters from her about twice a month. And so we go, there must be a seance going on. She's risen from the dead and wow. And so people are using and finding her letters online and altering them and still submitting them. And of course, we know that she's no longer with us, sadly. And so we know it's fraudulent and we see this a lot. It's really surprising that someone would be so bold to take a letter of a woman who's deceased and no longer is in practice, but try to pass it off as someone that is in practice.

JOHN: But what they don't know is that pet screening. You know, they don't know that what we do is we call the providers. Well, we are very well aware that this woman is no longer living, so there's no phone call to make. And so once we document that, that's pure fraud. I mean, it's actually a crime. Brad, you cannot you cannot take a medical document and alter it. It is a criminal misdemeanor, I would wager, probably in every single state. That's actually fraud. Be like writing a bad check. That's fraud. Now, we'll district attorney's pursue it. Probably not, which is sad, but I think if district attorneys did pursue it and made someone an example for if you committed fraud, then you should pay the price. Other people may stop doing it. But but that's something that we see over and over and over, just as an example, which, you know, kind of like, holy mackerel, people are bold. They are absolutely bold. But then there's examples where we find fraud. This is kind of interesting. I can think of one recently where we find fraud. We always give individuals the opportunity to appeal. Brad and HUD likes that. They love the fact that we always leave that door cracked open. Now because we find fraud, you would think, well, why would you ever let them appeal? Well, we call it fraud because the health care provider has told us that it's fraud.

JOHN: We have this in writing. But sometimes health care providers make mistakes. And so when people appeal, then they'll give us the reason why. And we had one recently where it was a partnership between two health care providers and they had changed software systems and one provider had issued the letter in the old system and keyed it in to the we'll call it System A, but they had pivoted away from A and now we're using system B and they said that it was frogs. They couldn't find it in their system. Well, no one went back to look at system A because they had now switched to system B, but that person came back and said, No, this is not fraud. I'm appealing. Here's why. And we were able to get the health care provider to go, Oh my God, they're right. They really are a patient. They really did come in and we reverse the decision. That is why we're so thoughtful and making sure that even if we say it's fraud, because the health care provider, it said provider set it. So we still give these individuals a chance to appeal it. And we listen to their appeal and we review their appeals and we think it's just yet another example of how pet screening takes a very high standard.

BRAD: Another thing we should talk about is the renewal process. So this is not just for applicants in the beginning. This is also something that should be implemented towards a renewal because it should be done every year. I want you to talk through some of that.

JOHN: Yes. So let's let's let's pick on the no pet folks. So people move in in January and come let's say come November, it's time for them to revisit their lease. Well, if you don't get them to go through the no pet renewal, which still is free, by the way, I mean, there's no cost to do the no pad and there's no cost to renew the no pad. But when they go to renew the No nopat, what if they do have what if they did get a pet in August, someone they found one on the side of the road or something? Well, now when they're doing that, no pet, we make them go back through the process. Re legally attest that what they're saying is true and it makes them think twice. And a lot of times they'll say I better surface this. So even if they choose to continue to hide that pet that they now have, at least every year, you would have that no pet profile on record showing how every year you're doing your diligence. Same thing with a pet. First of all, pets do eventually pass away. You know, pets are like children. They live typically 12 years on average. Bigger dogs often die sooner. Smaller dogs often live longer, just statistically speaking. But someone may move in with an 11 year old lab and in the fifth month, it may pass away.

JOHN: Well, what do they do, Brad? They go get a puppy, but they don't tell the property manager. So when they're at renewal time and let's say let's say the first dog's name was Cooper and let's say their puppy's name is Maggie. Well, the renewal is going to be for Cooper. And when they get to the renewal, they're going to say, well, Cooper is no longer living. It's now Maggie. Well, we don't let them change the name because it's a whole new dog. They would actually have to go through the process again. And a Fido score for a puppy is going to be much different than a Fido score for an 11 year dog. So that's another great example of why year after year, make them go through the renewals. If Cooper was still living in this example and now Cooper is 12 years old, no problem. We just ask them to Cooper bite anyone this year? Does Cooper still have his or her vaccinations? They're still relevant information every year that's pertinent and that renewal gets that back on the record. So having that renewal is incredibly important. And if it's a puppy, when they moved in and now in their second year, it's no longer a puppy, their Fido score actually improves.

JOHN: So now you might be able to take their pet rent down and that's a good thing for your resident. And that renewal would surface the fact that their score has changed. And so sometimes it works to the favor of the resident, as it should in some cases. And then, of course, assistance animals, you know, people who say they have these are for what we call non non obvious disabilities or not readily apparent disabilities. So, you know, you can look at me and say, well, he doesn't look like he has a disability, but you may not know that I went to I know you're a veteran, so thank you for your service. Some people have these mental trauma from going to war and they truly need these animals. Well, the whole purpose of going to therapy and counseling is to ameliorate the disability to get better. So year after year, it's okay to keep revisiting that reasonable accommodation request to make sure the need for the animal hasn't changed. Sometimes it has changed because they have received the therapy and counseling they need and now they no longer need the animal. So the renewal process is incredibly important for all three lanes.

BRAD: I agree on that because that renewal thing, it's you know, we go through these great lengths to assure these people are doing the right things with their pets. And it really all starts at like five or six layers higher than this, because you've heard the term of the end. The end user is going to pay for it. It's just going to get passed down to the consumer. Well, all this is because of a property manager somewhere being sued by an attorney. And the attorney goes on a contingency and he sue somebody over a dog bite. And next thing you know, there's $1,000,000 awarded and now it's all covered by insurance. So that just encourages more lawsuits. And the more lawsuits that are that are becoming commonplace, the more the insurance companies charge the consumer. And then it passes down to us just as protection, because everyone wants to come after a property management company and or an apartment complex because they have insurance. And so the insurance is the big target for attorneys on contingency, which is why we got to go through this stuff. Right. We're all I know there's some listeners out there thinking, God, I don't want to do any of that junk. I just want to. Oc You got Fluffy over there, okay? I trust you. I believe you. Okay, just sign here and get into my house and under a lease. But they're missing out on a big layer of protection that's going to no pun intended. It's going to come back and bite you. Yeah. So I would recommend you always want to go this this direction to applicants and also renewals. And don't forget about the renewals because people are thinking, yeah, applications, that's easy. You know, they've got to pay or they're not getting in. Right? But renewals is a little stickier sometimes they don't want to do that and you may have to like twist a few arms to get them to do this stuff at renewal.

JOHN: That's right. Well, and that's really I'll tell you, the people who are the who are the most protected are the folks that use our tool year after year for every single resident. Like there's no pet owners. There's no reason a no pet owner should re codify the record. They still have no pet at their renewal. It takes minutes to do. It's free. Same thing with assistance animal. You know who it costs? Money. It costs my company the money to review it again. But we're willing to do it again. The review for our property managers at no cost year after year after year, if that's what you want, which we recommend to make sure that it still meets the standards because people can get better. This idea that a letter from three years ago, unless it says it's a permanent disability or it's chronic, which chronic is another word for, you know, doesn't go away like Lyme disease is chronic. For example, you'll never get rid of Lyme disease. But short of those things, there's nothing wrong with just making sure they still qualify for that reasonable accommodation because eventually they could get better and now it's not a pet.

JOHN: And so the ones that I think are protecting themselves the most are truly taking our product seriously. And, you know, and we spend a fortune, you know, on our review teams reviewing animals on the years two and three where we, you know, we don't really get the benefit of it, but it's the right thing to do and we're happy to do it. But in exchange, we need you to make sure all those pets renew because we do make the revenue on the renewal, which helps us offset our expense for the reviews. But more importantly, you get the protection to make sure that dog is still vaccinated, to make sure it's even the same dog, to make sure that dog didn't go bite someone this year. All of those things are incredibly important and just make them do the work. We nudge them. We use electronic tools to remind them it's due short of them just ghosting us and ignoring us. They will know it's time to do it. But if the property manager isn't going to enforce it, well, of course they're not going. To do it, and then the property manager is missing a good opportunity.

BRAD: So you've got to talk just about the pricing model, too.

JOHN: Yes. Pricing. Really simple. If you are a property manager and your pet friendly, then this is there's no cost to you to sign up for pet screening. We we work with all your major software platforms so we can work with anyone, which is awesome. And it truly is a free service. Now if you're a if you have a high number of assistance animals and a low number of pets, well, we will have to have a conversation because we can't review all your animals and not get any pet business. That wouldn't make good business sense for us. So we keep an eye on the ratio of how many pets you have versus animals. But 99.9% of our customers never really fall into the category of having more animals than pets. Where we see that happen is on firms that are only using us for animals and ignoring their pets. And that's not fair to pet screening. So you really need to embrace our tool for everyone. And if you really embrace our tool for everyone, then the ratios will file exactly or fall exactly where they need to fall. And it's free for property managers. Now, how do we make money? Because we are a for profit company. We've got to make revenue somewhere. We charge a pet application fee. No pets are free assistance. Animals cost zero also. So the free for both of those, free for the property manager.

JOHN: We make our revenue by charging a $20 application fee per pet. And if that's if they use plaid and ACH and if they use credit card, we charge $25 and that's how we make our money, 20 to 25 bucks at a time. And it's pretty simple. And and the the consumer pays at the pet owner pays it, but we give them a tremendous amount of value back. You know, they can use this tool with their doggie day cares and veterinarians. We remind them when their veterinarian shots are about to expire and we're going to be rolling in in the new year, our new Fido Alert and Tabular, which is a Amber Alert system for pets and where we will send everyone a free dog tag. These tags are eight bucks at Chewy. So now they're going to be getting a free tag, which that would typically cost them $8 if you went to Wal Mart and the lobby, they have those engraving machines. They're $8. They're they're eight. They're more than $8 at pet stores and and online at Chewy, They're about I think they're truly $8. And we will send you a free tag by enrolling into Fido, alert and Tabular. And so we're going to be bringing even more value to all of your pet owners that are living in your properties.

BRAD: Well done, sir. How do we get in touch with you?

JOHN: Yeah. So, I mean, if you want to get touch with me, I'm easy. Jo Ann for John at pet screening com you can reach out to me if you just have a general inquiry and you are interested in learning more, you can send it to info info at pet screening dot com. But I mean Brad you know me, I'm a pretty hands on founder and CEO. So anyone here that emails me directly you will get a response and I will tag in the right people. You know we're very thankful and grateful to the industry for supporting us as much as they have. We are delivering an incredible service and it's our honor to do it. And all we ask is spread the good word. We grow by word of mouth. I mean, it really has been amazing. We're in about 3.8 million rental units across the country, all 50 states. It's unbelievable.

BRAD: Fantastic, fantastic business. Kudos to you for building it while you're kind. I really appreciate the conversation. You're absolutely great stuff. I'm hoping a lot of the property managers learn a couple of things. Even if they're already using your service. They learned a couple of things that they can implement and do better to make their service even work better for them and their business. So really appreciate you coming on, John. I look forward to seeing you at the Mastermind conference in Nashville. Get a march in 2023, go to PM CNN.com to learn more. And thanks for coming on.

JOHN: You bet. Thanks for having me. And thanks for all your good work for the industry.

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ANNCR: This has been a podcast episode by Property Management Productions dot com. Be sure to subscribe to our podcast, leave us feedback and come back for our next episode.

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About The Host

The Host of this Podcast is Brad Larsen from San Antonio, Texas. Brad is the founder and owner of RentWerx, one of the fastest growing residential Property Management companies in Texas that currently manages over 700 single family homes.