In commercial real estate, the property management handover is critical to the future stability of the property and the associated property management procedures. This is where the new real estate agent has to be very careful in obtaining the necessary information from the previous property owner or property manager as the case may be.
It is not unusual for previous property managers and property owners to be uninterested or uncooperative in the property handover process. This can be for a variety of reasons but they will certainly frustrate the ongoing operation of the property. The new property manager has to be very diligent and focused in the property handover process. This means that you need a property handover system to suit your business and your client.
Every property is unique and therefore the management handover should be treated accordingly. However the following is a list of topics to cover in the property handover procedure. The list can be added to given the nature of the property and the client.
Typical property management handover system:
- Inspect the property and review the precinct in which it is located. Look for any environmental and or boundary matters that can impact occupancy.
- Understand the history of the property financially and physically over the last few years. Have there been any problems and challenges that impact the property?
- See if you can get a history of lease changes, and a history of financial performance over at least 2 years.
- Get a tenancy schedule that can be reviewed against the existing leases. Expect that the tenancy schedule you are given is not accurate and requires complete review.
- Check all lease documentation fully before meeting with the tenants on the property
- Identify any vacant tenancies that need to be leased
- Look for any leases that will soon be coming to their expiry dates
- Identifying any of tenants that are in default or have matters that are in dispute
- Review the income and expenditure for the property currently and historically.
- Understand the outgoings as they relate to the current function of the building.
- Meet with the tenants and see what concerns or issues that may have in occupancy
- Meet with the contractor’s to the building and see if there are any current outstanding matters of maintenance.
- Talk with the landlord regards any matters relating to reporting, property performance, property lifecycle, tenant negotiations, leasing strategies, marketing methods, and communication.
If the handover process is done well, it saves a great amount of time later when questions arise. There is nothing more frustrating than when the landlord or tenant asks questions about the property and you have not got the answers.