Chapter 17 Property Management A property manager is also a people manager and relationships are important. This manager may be checking a property’s plans for adequate fire planning, for upgrading the HVAC system, or for a remodeling project.

2 ©2013 Kaplan, Inc. 17 Property Management Learning objectives –Identify the basic elements of a management agreement –Describe a property manager’s functions –Explain the role of environmental regulations and the Americans with Disabilities Act in the property manager’s job –Distinguish the various types of risk management

3 ©2013 Kaplan, Inc. 17 Property Management In Georgia, a property manager must hold a real estate license Property Manager’s Responsibilities: Achieve objectives of the property owners Generate income for the owners Preserve or increase the value of the investment property

4 ©2013 Kaplan, Inc. 17 Property Management Property managers generally work for a property management company. As such, they: Search for new opportunities Specialized in property types

5 ©2013 Kaplan, Inc. 17 Property Management New Opportunities Community Association Management Housing for elderly Manufactured housing Resort housing Concierge services Asset Management Corporate properties Leasing Agents

6 ©2013 Kaplan, Inc. 17 Property Management Professional Associations BOMA & BOMI CAI IREM ICSC NAA NARPM NAHB

7 ©2013 Kaplan, Inc. 17 Property Management Elements of a management agreement in Georgia: –Identify the property –Terms and conditions under which property will be managed –Terms and conditions under which property broker will remit property income and statements to the owner –Specify payments of property-related expense –Specify amount of fee or commission –Specify where security deposits, prepaid rents, or commissions will be –Effective date of agreement and termination –Terms and conditions for termination of agreement –Signatures of broker and owner or their authorized agent

8 ©2013 Kaplan, Inc. 17 Property Management Manager’s responsibilities –Financial reports Operating budget Cash flow report, Income and expenses, profit and loss Budget comparison –Renting the property –Marketing –Selecting tenants –Collecting rents –Maintaining good tenant relations –Maintaining the property – prevention and correction

9 ©2013 Kaplan, Inc. 17 Property Management Manager’s responsibilities –Maintaining the property Preventive Repair or corrective Routine Construction Tenant improvements (commercial or industrial)

10 ©2013 Kaplan, Inc. 17 Property Management Federal laws affecting property management –The Americans with Disabilities Act –Equal Credit Opportunity Act (ECOA) –Fair Housing Act

11 ©2013 Kaplan, Inc. 17 Property Management

12 ©2013 Kaplan, Inc. 17 Property Management Risk management –Tenant safety and security –Risk management techniques Avoid risk by removing the source Control risk by preparing for the emergency before it happens Transfer risk to another party – insurance Retain risk by deciding its occurence is small

13 ©2013 Kaplan, Inc. 17 Property Management Risk management –Tenant Insurance protects tenant’s personal property against loss –Commercial Insurance (apartments, shopping centers, offices, warehouse, etc. Fire and hazard Flood Consequential loss, use, and occupancy Contents and personal property Liability Casualty Surety bonds Multiperil policies

14 ©2013 Kaplan, Inc. 17 Property Management Risk management –Claims –Handling environmental concerns

15 ©2013 Kaplan, Inc. 17 Property Management Georgia Community Association Management (CAM) –Definition of CAM –CAM structure and powers –Fidelity bond or insurance for CAM