Commercial Property Management – Checklists for Property Management Handovers
As a commercial property manager, you will frequently be involved with property management handovers. When you are on the receiving end of the process, you will understand just how important the information gathering process can be.It is not unusual to get a level of reluctance on the part of the previous property manager or landlord to cooperate through the handover process. When they are losing a property to another agent, they are really not greatly interested in telling you everything. For this reason attention to detail in the handover process is very important. If you are at the receiving end of the handover you will have to be very careful that you collect all the right detail and ask all the right questions.The simple fact of a property management handover is that you must achieve full awareness and accurate details of all the property elements and activities. Without these facts you can make mistakes and create errors.The larger and more complex the property to be managed and taken through the handover, the greater the variety of issues that potentially can be involved; so be prepared to ask the right questions and gather the right information.Here is a simple checklist of some of the major issues involved in the property handover.Get a copy of all plans associated with the property title, improvements, surveys, and tenancies. These will be invaluable when it comes to managing the property into the future.
Get details of contractors appointed to the property and the maintenance duties that they undertake.
Any fit out plans associated with the individual leases should also be provided to you. All fit outs should have been approved through the previous property owner and those works should comply with the current building codes. This says that the tenant should have achieved approval for construction prior to the fit out work commencing.
As built drawings associated with the building will give you details of design factors associated with the improvements within the property at the time of construction. The as built drawings will normally be for electrical, hydraulic, mechanical, air conditioning, lighting, and structural issues.
Particular rules and regulations will apply to the function and occupancy of the building. The local building codes and planning regulations will stipulate what those rules and regulations are. It pays to visit the local council offices to ensure that you have awareness of any rights restrictions and obligations that apply to the property.
The essential services to the property will have to be managed within building safety codes and compliances. Your property contractors should provide some assistance here.
Look for unusual property matters such as those associated with energy, heritage, environmental, and statutory charges or notices. Visit the local building authority to check for any outstanding matters here.
Copy of all lease documentation will be important to the ongoing occupancy in the building. Those leases will have particular critical dates relating to rent reviews, options, lease expiries, and other particular lease obligations. When you get a copy of the lease documentation, it pays to go through all leases comprehensively to collect and understand the critical dates. These dates should be entered into some form of a diary system to alert you at the right time in the future to take the right action.
The leases should be checked against the current rent invoices. The rent invoices should be accurate for and with regard to the terms and conditions of each of the leases. On this basis you need to check and cross reference the rental invoices and charges raised. Look for not only rental matters but also outgoings charges and any other charges that can be raised against the tenancy.
Are all tenants on current leases that have been correctly enforced? It’s a smart question to explore early at the time of property handover.
Any matters of arrears or breach of lease should be flagged to you for continued appropriate action. Copies of existing correspondence in these matters should also be provided to you. Problem tenants should be flagged for action and attention.
The outgoings charges and recovery strategy within the property will be supported by the lease structures and dates. Some tenants will be contributing towards building outgoings as part of their monthly or weekly rent charges. You will need to understand just how the process has been handled in the past and get the current status of recoveries from the various tenants today.
A history of outgoings reconciliations and payments over the last few years will help you with future budgets and tenant lease reconciliations. Outgoings impact the net income and property price and should be respected on that basis.There are other matters relating to the handover process that should be added to these we have detailed above. The best way to approach the handover of a property is to use a checklist specifically taking into account all the factors of the property type and the local area.