The Lease Administrative Survival Guide
As a property owner, are you getting what you are entitled to from your lease agreements? Many leases call for payments to be made to the landlord that sometimes go unnoticed, such as utility reimbursements or additional maintenance fees, particularly when these payments relate to self-managed properties. CAM (Common Area Maintenance) and rent increases may be overlooked and can be efficiently monitored by lease administration professionals.
Some years ago, I was stunned to find in reviewing financial documents and leases for a prospective managed property, that the majority of leases in the building calling for annual CPI (Consumer Price Index) increases to the CAM fees were overlooked. This oversight cost the owner several hundred dollars per month for each lease.
It is vital for property owners to have their leases reviewed by property managers or lease administrators to be sure they are receiving the monies they are entitled to per the terms of the lease agreement.
Many self-managed properties are being maintained without some form of property management software. This type of software has the capability to keep track of additional fees and increases that have been agreed to by the tenant and landlord, as they occur. The collection and management of them is only a matter of proper administration.
Listed below are some helpful steps to assist you through the leasing administration process:
- Read and understand the lease. Do you fully comprehend the terms of your lease agreements? Ask a professional for help. Terms like CPI, CAM, and OE, to name a few, could be confusing to someone who does not work with these terms on a daily basis.
- Scheduled rent/payment increases. Would you prefer to eliminate the worry of lease fee increases being overlooked? A software program can assist in scheduling and monitoring the increases as they occur.
- Seek professional assistance to administer the fees and be the liaison between tenant and landlord. Do you need assistance when dealing with your tenants? Your schedule could be hectic and lease administration may become problematic and time consuming. Property managers and lease administrators can provide services that allow a property owner to remain anonymous, yet still have their rent and fee increases addressed.
Lease administration can be tedious and stressful. It is not the most engaging aspect of property management, but oftentimes can be one of the most important. Proper leasing administration can mean the difference between a "cash flowing" property of having a property that simply breaks even.