Property Management Services
What to Expect From Your Property Manager
Location, rent and amenities probably were the deciding factors when it came time to lease a space to house your business. But before you sign that lease contract and begin arranging for movers, it's prudent to learn about the person who'll be the conduit between you and the owner, the "go-between" source for questions, complaints and comments.
That person is the property manager.
Depending on the building, the property manager may be housed in an office on premise, or at a remote location. In any case, the role of the property manager basically is twofold: manage the owner's investment so it generates a profit, and fulfill contractual obligations to the tenants.
Keep in mind that the property manager works for the owner, but he or she is there to serve you - the tenant, the source of income from the real estate investment. (Within smaller real estate holdings, the owner will manage the property.) A successful property manager will have the ability to interact effectively with people, or as one commercial real estate veteran put it: "Believe that he or she has to renew each tenant lease every day."
Experience certainly is a plus, but a professional or company new to the industry may compensate any lack of experience through aggressive management or thorough attention to detail. Some managers hold a professional designation, such as the Certified Property Manager (CPM), Real Property Administrator (RPA) or Certified Shopping Center Manager (CSM). You also should ask how much experience the manager has in the type of property you plan on leasing.
With ultimate responsibility for well-being of the building and its tenant base, the manager in most cases does not perform the day-to-day tasks like janitorial work, but rather supervises outside contractors.
Expect the manager for an office or retail property to take on the following responsibilities:
- Lease Negotiations - Many managers take on the role of agent in charge of hammering out a lease agreement between you and the owner, as well as any renewals. Regardless of who is representing the owner, you should enlist a qualified attorney before signing a lease.
- Rent Collection - The collection of rent, including a daily record of how the proceeds were deposited, is a basic function of the manager. You'll hear from the manager if the rent is late.
- Maintenance - You won't see many managers pushing a broom or changing light bulbs, unless there's an emergency. However, the manager is responsible for screening, hiring and supervising the job done by outside contractors and custodians. Address common area maintenance or upgrade work concerns with the manager, not the workers themselves.
- Security and Safety - As with outside maintenance workers, it's the managers job the make sure the space you rent has adequate security program in place and meets federal, state and local safe workplace regulations. Based on the type of property, security may range from uniformed guards on premise to insuring door locks are working.
Trouble in Paradise: When You and the Property Manager Butt Heads
Say you plan to schedule a meeting with the property manager of your office building. You want to know what can be done if you can't meet the monthly rent. Or, you plan to ask for modifications to a common area. Or, want to dispute an unexpected charge for snow removal.
A good manager - one concerned about the tenant's interests and the owner's investment -- will likely remark: "Let's see what's written into the lease," then proceed according to the stipulations within the document. In most cases, commercial tenants who fall behind on rent, ask for favors or challenge predetermined lease covenants have very little recourse. A lease essentially is a legally binding agreement signed by an officer of the company. Tenants must live up to the terms or risk being in default.
Property managers operate under the theory that they must work at renewing every tenant's lease every day. Property managers also are stewards of the owner's investment and will take whatever steps the agreement will allow to ensure the investment remains profitable.
On the other hand, you do have some recourse if management fails to hold up its end of the contract: costly and time-consuming litigation. Professional property managers, however, build their reputations on service, and the reputable ones rarely balk on providing tenants services outlined in the lease.
Understanding the financial ramifications of all clauses within a lease is essential to avoiding problems down the line. All leases are negotiable, but the negotiations stop once you sign on the dotted line. A well-written lease will be void of gray areas.
It bears repeating, but always retain an attorney experienced in commercial properties before agreeing to a lease. And, be cautious of overly aggressive leasing agents who are more focused on closing the deal than explaining complex triple-net formulas for rent increases or seasonal charges for common area maintenance. (A net lease requires that the tenant must pay a share of taxes, insurance, maintenance and other operating expenses along with a fixed rental amount.) Disputes can arise when unanticipated invoices arrive from the management office for expenses not related to rent.
Collection of rent, unexpected operational charges and challenges to signage covenants are among the most common reasons for landlord-tenant conflicts.
Efficient rent collection and recording procedures outline the rental due date, the date rent is considered delinquent and a schedule of late penalties/charges that conform to local laws. If you fail to deliver the full rent within the prescribed timeframe, expect the manager to initiate eviction proceedings, which more than likely will end with a writ of eviction from the local circuit court.
Additional charges for maintenance, tax increases and related costs cannot be challenged if specified in the lease agreement. Problems surface if the tenant did not comprehend or expect these expenses. Signage regulations (especially involving lighted signs) often are written to conform to local building codes, which make them difficult to challenge by the tenant.
