When you take over the management of a commercial or retail property today, the information that you gather from the outgoing property manager or landlord will be critical to the establishment and future success of your property management processes.
Information is Critical
Property
Lack of information in the handover process means problems and potential errors in the future. On that basis you should have a specialised handover process that you can implement on and with the handover of every property type within your local area. A checklist will help your activities as you bring in the new property to the management portfolio.
Here are some ideas to incorporate into your handover checklist:
- Get complete and comprehensive details of all leases and licensed occupied areas within the property. You will need to check these against the tenants physically in occupancy and the rental invoices that are raised for tenancy payment. Everything has to cross relate accurately.
- Copies of lease documents should be checked against the original documentation. Also look for side agreements for any extension or variance documentation relating to the original lease.
- Copies of correspondence relating to existing tenancy matters should be handed to you. Ask for this specifically and drill down on the details of each matter.
- Get copies of the current rental invoices and cross reference these to the tenancy schedules for the property. It is not unusual to come across in errors in the tenancy schedule or the rental invoices.
- The tenancy schedule should be checked against the actual leases and other occupancy papers and the signed documentation between the landlord and tenant.
- Check all outgoings charges and expenses that are applied to the tenancies within the managed property. The charging process should be shown on the rental invoices; you will need to check this amount and the process of recover that is adopted. It is not unusual to see errors in the outgoings recovery with tenants in managed properties. The process of checking will involve you getting copies of the current outgoings budget and the recent outgoings reconciliation.
- The arrears that apply to the property and any tenancies should be identified as part of the handover. They are sometimes discharged at the time of settlement, although the question should be raised in case you are taking over the ongoing pursuit of the arrears with any existing tenants. If that is the case you will need copies of all previous correspondence and claims.
- Current vacant tenancies within the premises may be the subject of lease negotiation. You will need copies of the lease offers that are or have been made and the status of the existing negotiations.
- Details of the maintenance issues within the building will be required. The essential services within the building will be critical maintenance contracts to identify early in the Handover. Any threats to the stability and function of essential services should be identified and addressed immediately. The maintenance contractors for the building will understand the function of the existing plant and machinery; get details of these contractors and then set up meetings as quickly as possible.
- Ask about any orders or notices that apply to the property or any part thereof. Check out any encumbrances, rights of way, or easements that apply to property usage.
So these are some of the main items that apply to the property management handover process. There will always be more issues and items to look at although these items listed above are the big ones to immediately get under control.
Commercial Property Management - Checklist for Property Management Handovers
If you want some more tips and ideas to help your commercial real estate agency and convert more opportunity into listings and commissions, you can get a free eBook of tips and tools at http://www.commercial-realestate-training.com
John Highman is an experienced Commercial Real Estate Agent, International Speaker, and Sales Coach.