Friday, June 8, 2012

Commercial Property Managers - How to Manage Maintenance Contracts

electrical tools
Create Maintenance Management Systems for Commercial and Retail Property

As a commercial property manager, one of your regular daily tasks will be the administration of maintenance activities.  Here are some tips for that from our Commercial Property Management Newsletter.

In a single property with a single tenant, this may not be overly taxing or difficult.  However, when you start working on and managing larger properties with many more tenants, the maintenance process becomes very important to the function of the property and the comfort of the tenants.

Essentially you get a lot busier; you need systems to help you.  Maintenance management is one of those systems.

The maintenance process within a property can be split up into the following:

  • Simple maintenance tasks that are non-critical and can be responded to over a number of days.
  • Maintenance tasks that are time critical and will create further damage if they are not repaired within a few hours.
  • Maintenance events and emergency situations where people can be injured or life can be threatened.

Each of these situations will require specific control and response.  It is up to the property manager and landlord to ensure that the circumstances of the event are fully understood and that the correct response is implemented as soon as possible.

A Common Problem

It is interesting to note that many property managers do not spend enough time at their managed properties as part of a regular inspection process.  Some less experienced property managers will only visit the property on an ‘as required’ basis.  Experience says that you can get into real problems when either of these situations is let continue.

Both of these situations create significant risk of property failure, personal risk, and injury to the public or the tenants within the property.  It is not unusual for a property manager to be jailed for negligence when it comes to errors in judgment and service when managing the property.  The Landlord and their Insurance Company will look to the actions and records of a property manager when something goes wrong in a managed property.

To successfully manage an industrial, retail, or office property there will be a number of considerations to review and incorporate into a property maintenance management plan.  The property manager or landlord to the property should implement a system on this basis.

Here are some ideas to get the process going:

  1. Understand the critical parts of the property that can threaten the property performance and operation.  Essentially you need to know the things that can stop the property from operating and assess their threat to you and or the landlord’s investment.
  2. Identify the special needs of each and every tenant given the services and amenities within the property.  What would happen to these tenants if the services and amenities were disrupted?
  3. In addition to the tenants within the tenancy mix, there will be customers to the property each and every day.  In a retail property this factor is even more pronounced.  Look at what these customers do within the property and how they move through it.  Do they exert pressures on the services and amenities and how can you manage the process?  What maintenance will need to be adjusted to control the customer movements and pressures on the property?
  4. Talk to the maintenance contractors within the property to understand the factors of wear and tear related to the essential services and the existing property performance.  There will be differences between ordinary repairs and maintenance, and any major capital expense activity in the replacement of plant and machinery.  There is also a difference between preventative maintenance and break down maintenance.  How do you handle these things?
  5. It pays to consider some form of critical response strategy for situations of major maintenance failure within the building.  Maintenance problems can impact on the tenants, landlords, and customers within the property, and each of these factors need to be managed.  This strategy can be merged into the emergency response plan for the tenants within the property.
  6. Speak to the local emergency services to ensure that you understand their interaction with the property when something needs their attention or involvement.
  7. Talk to the landlord’s insurance company to involve them in the emergency response procedures and the risk management plans created for the property.  Ultimately they will be involved in any risk management solution and claims that can occur from major property failure.

Lastly a comment should be made regards your response in times of property failure and difficulty.  Exactly what system do you have now to follow when the building is under difficulty and pressure of maintenance failure?  Without a sound and strong response system, you are exposing yourself to the potential of litigation from the client, and other third party claims.

This list is not finite, and you can add other factors subject to your property type and location.  Importantly the maintenance management process should be systemized and agreed between the property manager, landlord, and the insurance company covering the risk factors for the landlord.

Need some more help in Commercial Property Management?  Join our Newsletter right here.