When you work in commercial real estate property management or shopping centre management, you will know the importance of a good property handover from other clients or agents. If you are on the receiving end of the handover you really must be careful and prepared for the event.
The handover process is the only time that you can gather the existing information about the property and its performance. Unless you ask the right questions you will not get the facts that you need. Some months later you could be struggling with tenant and landlord issues because property information is lacking in some way.
Here are some key facts to have as part of the handover process.
- Get all the current files for the property. That will include lease transactions, disputes, maintenance, and all property issues. Review the files and understand what they contain; look for any missing information.
- Review the leases for all the tenants and enter the detail into the property management system that you use. Be very careful here as any mistakes or omissions will come back to ‘haunt’ you later. Get all of the critical dates from the leases and put them into your system of management.
- Get tenant contact information verified. There is nothing more frustrating than not being able to contact a tenant when issues arise. As part of the handover process, meet with the tenants in the property as soon as practical, but don’t take too long to do so. Let them know who you are and how to find you. Make a positive connection will your tenants from the earliest possible time.
- Understand the arrears that currently exist and find out exactly what the arrangements are regards payment or recovery.
- Income detail should tally with the leases. On that basis you should check the tenancy schedule, the rent invoices, and the leases to make sure they all tally and cross reference.
- Expenditure detail for the year to date will allow you to continue the budget year. All expenditure should be split into cost categories that are relevant to the leases and the outgoings recovery process.
- Outgoings history for the property and the recovery from all tenants will be needed at some stage and before the end of financial year as you prepare for outgoings reconciliation. Make sure that the numbers you are given are accurate and sufficiently detailed for that later reconciliation process. Get copies of all expenditure invoices for the current year. Pay particular attention to the municipal rates as they will be a significant part of the expenditure commitment by the client.
- An up to date tenancy schedule should be provided. Check it against the leases.
- Maintenance records including the maintenance contractors, and details of all essential services contracts should be sourced. The maintenance in the property has to continue correctly and legally to provide a safe property for occupation.
- Risk and liability should be questioned in case there is something that threatens the property performance, the tenants, or the public. Make sure that you have the right insurances active on the property from take up.
This list is a good start to get a property handover process established. You can add to the list, and you should create a checklist to keep you on task. Over time you will find many benefits from doing things this way.