When you take over another commercial property from another property manager, or perhaps even a landlord, it is really important to ensure that you capture all of the right information that has an impact on the property today and into the future.
Any errors that are made in the property management handover process can impact the property significantly into the future, and make your job significantly harder as a property manager. Unfortunately the previous records relating to the property may not be complete or accurate. Your questioning process needs to identify this challenge and work through the issues that it provides.
So here are some tips that relate to the handover strategy and your systems.
- Ask for complete and accurate financial records relating to the income and the expenditure activity in the property over the last 12 months. You will need a detailed breakdown of the income and expenditure records for the financial year to date. This will be essential when it comes to reconciling the property at the end of financial year. The integrity and accuracy of those records should be questioned and checked.
- It is always desirable to get records of previous property reconciliations and budgets for the two or three years prior to your appointment. This will help you in budget analysis and creation in the forthcoming financial period. When you create a budget, keep detailed records of your assumptions and findings. This is best done on a spreadsheet that is archived for future use in other financial years. All of your assumptions will be critical to your budget tracking process throughout the year. Simple things can be forgotten and complicate the overall property performance.
- Get copies of all lease documentation that apply to the current tenants and the tenancy mix. Those documents should be checked against the current rental invoices as they apply to the property. Copies of correspondence relating to previous rent reviews and options should be obtained.
- Look for situations of rental rebate, incentive, or discount. Some of these things can exist for a number of years under an original lease agreement. If that is the case, they will need to be merged into the new income budget for the property.
- Meet with the tenants as quickly as possible during the handover process. The meeting is a personal process to be undertaken by the property manager, and will remove any uncertainty from the ongoing relationship with tenants. They should understand who you are and how to contact you if any property matters occur from the date of handover.
- Every property is unique and special when it comes to maintenance matters. It is wise to meet with the maintenance contractor’s for the property as soon as possible after the date of handover. These contractors’ can tell you of the events to look for when it comes to property performance, repairs, and break down. They will also give you a summation of expected future property performance within their specialty of plant and equipment.
- When taking on any new property, give special care and focus to the subject of essential services compliance to the current building codes. Some properties will have issues of compliance that will need to be addressed. Also look for any orders or notices relating to property occupancy or usage. Failure to address any of these items can see the property lose its ability to function as a property investment.
- It should also be said that the terms and conditions of each particular lease should be checked to see if any matters of occupancy remaining outstanding or need to be policed. Obligations can exist on either the tenant or the landlord in a variety of ways.
So these are some other main things to look at when it comes to a commercial or retail property management handover. You can develop a checklist of the process which will keep you focused on task and allow you to maintain accuracy in any new property management portfolio. Always keep notes of the handover process so that any misunderstandings or omissions can be proven at a later date.
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