CREJ

Page 12 — Property Management Quarterly — April 2020 www.crej.com Perspective P roperty management is fraught with “rattlesnakes” scattered throughout every property type, mostly hid- den and lurking behind closed doors. These nuisances can be easily found if you are fully alert, looking and listening for them in order to avoid them rising up and biting you, causing perma- nent damage to one’s career – your financial soul! n The No.1 commandment of prop- erty management: Behold, get thee out of your office, put on walking shoes, (I prefer golf shoes) and walk your properties looking for these poisonous rattlers, which are hidden in the rough, in the details – coiled, ready to strike you. And never forget, baby rattlers are akin to the daily details that eas- ily can drop through the cracks. A great property manager must have tried-and-true methods to track the endless daily details, that if not recorded in your files, will slither away into a crack. It is really good for your personal and financial health to do daily surveillance. Always remember that rattlers often are hidden in your tenant spaces. Regularly talk and walk with your tenants as you peruse their spaces, with your eyes wide open, ears finely tuned. Your tenant(s) may already have been bitten. If you notice your ten- ant is struggling financially, or if they have lost key employees, their fear will show on their faces and demeanor. Fear is very palpable and readily noticeable to the atten- tive property man- ager. n The No. 2 commandment of property manage- ment: Beware of rattlers hidden nicely within your insurance and ser- vice contracts. Do you understand each provision of the various legal agreements that are lurking all around you? Failure to understand our accountability and the real consequences for our noncompliance is deadly. I am talk- ing about real liability, painful law- suits, even possible loss of employ- ment and the literal dismantling of your career in property manage- ment. n The No. 3 commandment of prop- erty management: Thou shalt never overlook the details that will surely come back to bite you and bite you and bite you. Lurking Rattlers Beware of these 14 lurking rat- tlers: 1. Failure to report general liability/third-party claims – you open yourself and ownership for potential huge liability. Clearly understand liability and property insurance are mutually exclusive categories. The liability insurance property covers the insured’s liabil- ity to others for losses and injury. Commercial property insurance, on the other hand, covers direct losses to the insured’s real estate and per- sonal property. 2. You or your owner underin- sured the replacement value of the building – if there is a loss, there is potential for penalties in the loss payout of the carrier, and not enough limits to cover the loss. 3. Allowing a contractor onto the property without proper insurance coverage and licensing. 4. Not understanding lease provi- sions – failure to thoroughly read every lease provision. For example, we have literally found coiled, ready-to-strike rattlers hidden in Paragraph 27Y Miscellaneous Provi- sions of several office leases in one building. The owners were petrified when we brought Paragraph 27Y to their attention when we were abstracting the leases. 5. Stepping into the shoes of your tenant – failure to read the lease, understand the tenants’ and land- lord’s responsibilities and then tak- ing on liability that was not yours in the first place – per the lease agreement. 6. Sitting on your hands and failing to take action when you are required or have been put on notice of an incident at your prop- erty. Failure to meet deadlines, timely notice to your owners and insurance carriers is a huge mis- take. 7. Hazardous substances – failure to aggressively address a release or threatened release of a hazard- ous substance. Beware of joint and several liability for necessary cost of cleanup and natural resource damages. 8. First right of refusals – failure to closely monitor deadlines and trigger dates. 9. Failure to service the heating, ventilation and air-conditioning units, cooling towers, boilers, prop- er water treatment – avoid Legion- naires Disease. 10. Failure to inspect and repair cracks, fissures and uneven surfac- es throughout the property. 11. Failure to properly maintain life-safety systems. 12. Failure to document, docu- ment, document in preparation for potential lawsuits. 13. Failure to change locks when there is a change of tenant or staff- ing. 14. Failure to keep current on your continuing education licens- ing requirements with the Colo- rado Real Estate Commission. The annual updates are good and nec- essary. s Beware of ‘rattlesnakes’ lurking at your properties Kade Sessions President, Sessions Group LLC There are a variety of concerns lurking at every property that a manager should be expecting.