Simple record keeping helps everyone stay on the same page
Third party property management can relieve building owners of the liability and stress of an in-house staff. However, the responsibility of servicing and maintaining property owned by someone else can be problematic. What happens when things go wrong and unanticipated problems start to get expensive?
Who is responsible for the breakdown of physical assets being managed and maintained by a third party?
Most buildings budget for maintenance, repairs, and eventual replacement of equipment. But untimely equipment failure is very expensive. Effective maintenance protects buildings from these immense, unexpected costs.
Ultimately, building owners seek outside management to ensure proper operations and avoid additional costs. They shouldn’t have to worry, but being left in the dark isn’t good either.
Good documentation is the key to this balance
Third-party property management companies should be able to give assurance that they have maintained the owner’s property per the contractual agreement between the parties. The management company and most importantly, the building owner, should be able to answer the following questions at any time:
- Was the equipment monitored?
- Was it serviced regularly?
- Who performed any service and when?
With regular documentation of maintenance and service, the management company can be confident their records absolve them from liability. Without a safeguard like this they could be held financially responsible when something goes wrong.
In a recent Dreamit Ventures podcast, Josh Shoemaker, Regional Director of Management Services at Newmark Knight Frank, describes a scenario where the third party management staff forgets to have a generator serviced, it fails, and their profit for the whole month is lost paying for the repair.
“[Third party companies] don’t make enough money to take on that kind of risk”
In the scenario he described, accessible documentation (or lack thereof) could have revealed that service wasn’t performed, and the company could have corrected the situation before a breakdown.
Shoemaker suggests that real-time assurance that inspections and maintenance are on schedule is the ultimate solution to protect a property manager from this risk. This may be true, but real-time status updates starts with on-site staff recording this information in a format that makes it simple to communicate.
While supporting our customers as a staff member at LogCheck, I’ve seen various types of building maintenance and service documentation systems at many different facilities. It’s clear that facilities with a robust documentation system and a culture of good documentation are often some of the best run facilities.
It is true that keeping good records is sometimes considered a burden that is taken for granted and systems can get ignored or abused. In a busy facility, it is easy to forget that documentation systems exists to protect the building and the tenants.
Good documentation is not without its challenges! But it’s worth the effort.
Whether you are protecting your investments or protecting your company from liability. A culture of documentation will only help foster a long beneficial relationship between owners and third party services.