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What Is an Absentee Owner?

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  • Written By: Lainie Petersen
  • Edited By: Melissa Wiley
  • Last Modified Date: 26 November 2016
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    2003-2016
    Conjecture Corporation
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An absentee owner is someone who owns a business or piece of property but who turns over the management of the business or real estate to a third party. In the case of absentee owners of real estate, such landlords typically do not even live in the same community as their buildings and may rely entirely on a professional property manager or property management firm to make all decisions regarding tenants, repairs, and maintenance. Similarly, an absentee owner of a business may purchase a business primarily as an investment but have little if anything to do with its day-to-day operations.

In some communities, a significant portion of the local real estate is owned by private individuals who rent homes and units to tenants. In some cases, a landlord will simply rent out a home or unit on the property where he lives and take responsibility for finding and screening tenants, collecting rents, and ensuring that the building is in good repair. Some individuals, however, find this to be a lot of work and may not even wish to live in the area where their property stands. In such cases, they may choose to live in a community that is far removed from those in which they own property and allow a business or individual to assume the normal duties of landlording. In some cases, a landlord may not even know or have any contact with her tenants.

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It is also possible for a person to be an absentee owner of a business. In such cases, the owner may have inherited the business, put up the money to start the business, or perhaps even worked as a hands-on owner for many years before retiring or pursuing other ventures. The business absentee owner may rely on a single manager, executives, or even a franchise company to oversee the business and ensure its profitability. Some business owners have so many business interests that they are simply unable to engage in hands-on management and may have the finances to afford to hire high-quality employees who can be trusted to make good business decisions in consultation with the business owner's accountants and attorneys.

One of the drawbacks of absentee ownership is that an owner of a business or rental property may not be aware of problems until a tenant, worker, or patron suffers negative consequences as a result of employee or management neglect. In particular, the absentee owners of rental property are often criticized for contributing to the decline of communities, as they have no real stake in the community and may allow the quality of their buildings and their tenants to deteriorate over time. As a result, in some areas an absentee owner must provide local government agencies with information about how he can be located so that he can be held accountable for the behavior of those who manage his investments.

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