By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

I once lived in a house in downtown San Jose that was next to an abandoned “historic” house. The house was only abandoned because it was “historic.” The city had an ordinance that prevented the owner from demolishing the building and rebuilding it, or selling it. Because the house was built before a certain time, the city ordinance prohibited him from doing anything with the property other than fixing it up. Rather than doing that, in protest, he did nothing with the property. And I mean nothing, other than board it up.

Mistake! You see it was downtown San Jose. It was right in the middle of urban, night time activities. The abandoned home soon became a sort of an attractive spot for the seedier and less fortunate souls. We frequently had to call the police. There were the typical late night guests, drinking, broken glass, and other non-printable activities going on in there. After enough of these visits, the neighbors reported the landlord to the city, and hearings were held. Fines were levied. Landlords got mad. Fences were put up.

Pulling the restrictive ordinance and the obstinacy of the landlord out of the equation, the landlord had a duty to know what was going on at his property. He should have inspected it, even if he did not have tenants.

What kinds of things can happen, from a legal perspective, if you do not inspect and repair? What will happen if the property falls into disrepair under your watch? Well, you can be sued for breach of contract. But if it gets really bad, you can be sued for a tort, too. How about for emotional distressed caused by an uninhabitable residence? For unfair business practices?

At least in California you can. Consider the facts in a case we cited in a recent post:

“Regarding the condition of the subject premises, appellant alleged that: ‘On or about October 8, 1974, to the present, numerous defective and dangerous conditions were in existence, including, but not limited to leaking of sewage from the bathroom plumbing; defective and dangerous electrical wiring; structural weaknesses in the walls; deteriorated flooring; falling ceiling; leaking roof; dilapidated doors; broken windows; and other unsafe and dangerous conditions. These defective conditions were unknown to plaintiff at the time she moved in to the premises, but as she continued to live on the premises, she became increasingly aware of them.” (Italics added.)

Also attached to the complaint was a copy of the Kern County Health Department’s notice to vacate and demolish the subject premises, which listed the following violations among others: heavy cockroach infestation, broken interior walls, broken deteriorated flooring on front porch, falling ceiling, deteriorated, overfused electrical wiring, lack of proper plumbing connection to sewage system in bathroom, sewage under bathroom floor, leaking roof, broken windows, and fire hazard.”*

Pretty bad, no doubt. But this particular landlord was sued not only for rent, but for the intentional infliction of emotional distress the tenant suffered. She repeatedly asked for repairs and informed the landlord of these problems. He did nothing. She informed him again. He did nothing. She did what all smart people do in such circumstances. She talked to a lawyer and sued.

At first it did not look good. The trial court limited her to breach of implied warranty of habitability, and limited her damages to rent payment. The appellate court disagreed, and allowed her to sue for all manner of civil wrongs related to the landlord’s alleged intentional neglect.

And although it’s not a discussion for this post, most insurance policies do not cover damages caused by intentional conduct. So not only was this landlord being sued, his insurance company might not have paid for any award against him.

So remember. If a tenant asks for a repair, don’t ignore. Inspect.

*Stoiber v. Honeychuck, 101 Cal. App. 3d 903, 912 (1980)

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in these blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Linda Day Harrison, theBrokerList, Chicago, IL

Walk around your office and various departments. Ask folks what tasks they absolutely hate to do or what seems pointless. You will gain a ton of insight about your processes and procedures. Find out why you do that task. Make sure you dig down deep and study the what-ifs of each task.

For instance, each time we do a batch of “X,” a paper printout is generated. The paper is then put into a bin and we file it by property. Every single company, building, and system is different so this example is just an illustration. The point is to ask, “What is the value of this task?” If you file this print-out by property, what is the value of that print-out, and how many times is it referenced or utilized? Why are you printing it at all, can the printing function be turned off? How long is the data retained? There are many questions to ask, but the most important point here is, somebody just needs to ask.

Tracking and naming files and logs is very time consuming so you should ask yourself and your team a few questions. Is it meaningful? How often do you reference the information? What happens to the information after one month, one year, etc.? In one case we had a supervisor instruct the staff to pull down a report, save it to a file, and create a name for the file each time a certain event occurred. On top of that step, the supervisor created an Excel spreadsheet to document the occurrence, and listed it out by date. They did this each time. While doing my weekly walk (remember PMBWA?), I asked a team member what they were working on. They let me know about this logging task and how they felt about it. Once we discussed this with the supervisor and assured her that this data entry and log was not warranted, we were able to stop this process. There were cheers heard throughout this department as people were so glad to find out this busy work was going to stop. It turned out to be a task that took 4 employees approximately 10 minutes every single day to accomplish. That task was eliminated which reduced the waste of data entry labor, server storage, and management oversight to the tune of $5,000 in inefficiency. If we couple that with several other tasks we found and eliminated, we were able to add more properties without adding staff, which is the name of the game. It is not that we ever want to eliminate our personnel and talent, but we want to focus on how we can help them, and the company, grow without adding to our team!

In property management there are many important things we do, but we do not have time to do execute all of these tasks. You need to find the essential work (responding to customers, marketing properties, attending educational seminars, etc.) and get rid of the busy work! If we feel we do not have time for those essential tasks, are we filling our days with too much busy work? Is the owner or accounting making wasteful demands of our time? If outside demands start to add up, you may have to ask the property owner if they really need all these reports, or if they would rather have their property 100% occupied?

I am not saying that this solves all of your efficiency problems, but eliminating wasted busy work is a start! It is amazing how much you will find out about your operation by finding out what people hate to do most. In exchange, replace the task with more important functions that will bring in more rent, fill the property, make it safer, or increase its value. That should be the focus, not the mundane tasks!

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

I enjoyed philosophy classes in college. I enjoyed thinking about such questions, as: If a tree falls in the forest and no one hears it, does it make a sound? I enjoyed even more Bart Simpson’s reply to the question: What is the sound of one hand clapping? (He immediately held up his one hand and patted his fingers against his palm, making a muted clapping sound).

My enjoyment of these questions has found a natural outlet in the law. The law ostensibly provides you with an answer, whether it be found in a book, or in a code section, or recommended by experts. So it is one of those questions today that is our focus: If a tenant hurts himself in an apartment and the landlord did not know about the condition which caused the injury, was the landlord at fault?

As is always the case, the answer in law is perfectly clear: it depends. There is a duty to inspect premises when the property is given to the tenant. Landlords are in the best position to assess the relative safety of the property before the tenant takes control, so they should inspect and repair as needed. The inspection should comport with general negligence principles – i.e. be “reasonable” and make it “reasonably safe.” *

Yes, but how do we know if it is reasonable? Well that answer is clear and simple and straightforward: it depends. It depends on the facts of your case! In California:

“The burden of reducing or avoiding the risk and the likelihood of injury will affect the determination of what constitutes a reasonable inspection. The landlord’s obligation is only to do what is reasonable under the circumstances. The landlord need not take extraordinary measures or make unreasonable expenditures of time and money in trying to discover hazards unless the circumstances so warrant.”**

Clear as mud, right? So we fall back on common sense. If you are intimately familiar with the property you are about to rent – having lived there for five years – your duty to inspect probably is not great. You know what works, what does not, what is likely to injure (hopefully not much), and what is not. You know where the cracks in the slab in the garage are. In contrast, if you are not familiar with the property, you ought to conduct a more thorough inspection. If you just bought the property and have not had extensive time with it, you might consider a more thorough inspection. You might document what you find and give it to the tenant in writing, or repair as required.

Obviously, as we’ve discussed previously, if the inspection uncovers something dangerous, you ought to repair the condition before giving possession to the tenant. But if there is an open and obvious condition that is itself a warning to and is patent to the tenant that it is dangerous, the landlord might not be liable for any resultant injuries.

And further, if one possesses legal title but does not yet have control – that key word in our liability analysis – they cannot be held liable for injuries. If they have no opportunity to inspect and/or repair, their liability is usually precluded.

*Swanberg v. O’Mectin, 157 CA3d 325 (1984)

**Mora v. Baker Commodities, Inc., 210 Cal. App.3d 771, 782 (1989)

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in these blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia

I’m sure you are beginning to understand the vital importance of an operational due diligence being conducted prior to your offer to purchase a rent roll becoming unconditional. Once that contract is unconditional you are bound to proceed with the purchase regardless of how inferior the business is that you are purchasing. Yes, I understand that in most purchases there is a retention period, usually three months (again, this is a time period I do not agree with) whereby you have the opportunity to not pay for any managements that you may lose in this period. But, under normal rent roll contracts it’s fairly standard that a percentage of the purchase amount is usually withheld in a solicitor’s trust account and is released when the retention period has expired. Some agents believe this period is their safe guard. Well, I’m here to tell you that you must not be lulled into a false sense of security and, with that said, I feel another article is worthy of this subject.

This post focuses on what I refer to as the “critical factors” that need to be investigated when conducting an operational due diligence. These critical factors are:

• Average management fee
• Average distance to property ratio
• Average weekly rent
• Management splits (percentage of houses and apartments)
• Number of owners against properties under management and how many are multi owners (including details of each owner’s actual number of properties)
• Percentage of fixed term leases
• Monthly disbursement methods and timing
• Arrears management

In each of these factors we are seeking information that tells a story. It tells a story of risk factors and that’s exactly what operational due diligence is all about. What risks are you facing if proceeding with the purchase of this rent roll? How could it affect your current business operations?

I could write an article on each critical factor as each show a different set of possible risks or benefits to your current business operations. This post will focus on the average management fee.

The management fee is the determining factor that places the dollar value on your business. The value is normally multiplied by what I refer to as the “market multiplier” – the annual management fees multiplied by the current market value multiplier. Just by virtue of the fact your business is valued on your income generated through management fees, it is critical that management fee income is protected and never discounted.

When conducting operational due diligence it is not uncommon to find the management fee varies by as much as 4 to 5% in most rent rolls. Whilst this may be justified at the time to win business (new managements) the overall impact on your business value is disproportionate as it decreases the dollar asset value of your business, the business value in comparison to market average, and also the income generated from the management.

For example, if the current market value multiplier is around $3.00 per dollar income. Due to the fact that the operational due diligence uncovers significant management fee discounting and a high variation of management fees being charged, the value is much lower than market average based on risk factor and ongoing management. In turn, this affects the value of your current business. All of these factors MUST be considered.

As mentioned, whilst conducting operational due diligence I look for stories about the rent roll. These critical factors in question tell me a story about the current managing agency. Have they have built this rent roll fast, to then sell it off, or do they not back their business up with a high performance and knowledgeable team, or do they discount to get the business and therefore there have no client loyalty, or simply all of these? So, is this business worth what the current market value multiplier determines? The answer is no. In this case the advice is – offer a lesser amount than the current market value multiplier.

It is all too common for rent roll purchasers to pay far above the real value of the business because an operational due diligence has not been conducted. The amounts we are talking about can be hundreds of thousands of dollars. Would you buy any other business on face value? Would you invest hundreds of thousands of dollars without first investing a few thousand dollars to have an operational due diligence carried out? I would think not.

So, I hope you understand the vital importance of an operational due diligence being conducted prior to your offer to purchase a rent roll becoming unconditional. Don’t you agree it makes more sense to research the business you are considering investing in before making the decision to invest?

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

Even after our little spigot fiasco, my father and I are speaking again. In fact, it did not take long. We both bonded over the fact that later that night, my wife and I walked out of the George Clooney movie, The Descendants. My wife and I both were bored out of our minds and had little empathy for a guy who owned all of Hawaii. I mean, really? I’m supposed to feel sorry for this guy?! Dad, being generally anti-Hollywood, applauded our decision to vacate the movie theater in favor of the bar next door.

We got to talking, and we agreed that in the future, it would be best if I not ask him to do repairs on our house. It’s not really something I should delegate to him. We decided on the McCarthy “non-delegable duty of repairs” rule – I must do my own repairs.

By operation of law in California, a landlord also has a non-delegable duty regarding repairs. If the negligent – grossly negligent one might argue – repairs my father attempted were on a tenant’s dwelling that I rented out, I still would be liable for any injuries it caused. So if the tenant got hurt from this negligent repair, they could still sue me.

A landlord cannot escape liability for his repair duties by having someone else do the repairs. This duty to repair is “non-delegable.” Thus when a landlord hires a plumber, or other handyman to do a repair, if the plumber or handyman does not do it correctly, and an injury results, the landlord is still liable. Some examples of cases which held the duty to repair as non-delegable, and exposed the landlord to liability include:

• Sink in a school bathroom
• Water heater
• Roof
• Elevators
• Proper waxing of floors

Thus when a landlord hires a subcontractor in California to perform repairs on these or other fixtures, but does not repair them correctly, liability will attach for any later injuries.

The landlord certainly can seek redress from the subcontractor. If the plumber messes up the repair and injury results, when the landlord gets sued, he can sue the plumber (full employment of attorneys act, its true).

In many cases, the contract between the landlord and the independent contractor should cover such instances. It should spell out – expressly – who is responsible for what and that the independent contractor will be responsible to hold the landlord harmless from any suits. We’ll talk about contractual provisions with respect to some of these duties in later posts.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

Well, hello there and happy 2012 to you all. It has been a little bit of time since we have had a chance to chat. I will beg your forgiveness for being pre-occupied with year end duties, and a jury trial in Visalia, California that preoccupied my time and has prevented me from indulging in the blogging world. Now that I am able to focus, I want to talk to you about every one’s favorite topic – repairs – from everyone’s favorite perspective – a lawyer.

But before I do, I’ll share with you how I spent my New Year’s Eve. It’s a story that pretty much exemplifies why it is important to have a good handyman at your disposal. And why it is important that you not rely on your father to do repairs at your home or your leased property.

As is the case with a lot of you, my parents came to see their grandchildren for Christmas. They did not come to see me or my lovely wife. They wanted to see my kids while they are still cute, and say and do precious things. I recognize this and accept it. My little brother will soon benefit from this phenomenon. For the first time, my parents will actually go to see him in the cesspool (I mean lovely city) that is Los Angeles*.

As payback for this parental neglect, I frequently use the visits as the opportunity to enlist my father in helping me with home repair. This time, I had a leaking external water spigot in the back yard that was opening the spigot – if you will – on my water bill. So I asked dear old Dad to assist, knowing (but always forgetting) how he does these things.

He waited until December 31, 2011 to start. He waited until 4 p.m. in the afternoon to start. He had a 7 p.m. dinner appointment with friends. After assessing the situation, he decided that we may as well replace the spigot in the driveway because it was the same vintage and bound to fail soon, too. So off to Orchard Supply we went and purchased our replacement parts. We successfully installed the new spigot in the back yard in about 10 minutes.

The driveway spigot proved more challenging. We could not get it off. Not easily anyways. We did manage to get some of it off – the rest remained rusted and in place. The problem with only getting part of the spigot off and not all of it was, in this case, that there was no way to stop the water from escaping. Unless we turned the water off. So we did.

Not a big deal. Except that we did not have the tools to get the rest of it off. Except that OSH was closing. Except that Dad was going to a dinner party in about 20 minutes. Except that OSH was closed on New Year’s Day. Except that we have three little ones that need frequent bathing. Except that we needed to be able to flush the toilets. Etc. So Dad goes under the subfloor looking for a close out valve for this particular water line. Mom is at the doorway wondering when she is going to the dinner party. My wife is wondering what is going on. Dad swears like its 1984 and he’s working on the VW bus. Then throws his hands up and says, “I have to go to the dinner party.”

Lucky for me, my neighbor, who is a handyman, was home and looking for some extra cash. An hour and a $150 later, problem solved. Negligent repair made non-negligent. Water on. Kids clean. Toilets flushable. McCarthy residence, habitable.

And so it is, too, your landlord’s responsibility to make your property “habitable” by competent repairs. A landlord’s failure to maintain and repair the dwelling he has rented you entitles you to, in some cases in California, refrain from paying rent related to the dilapidated condition of the dwelling**. If the failure to repair interferes with the tenant’s ability to live in the dwelling, they may be free from rent obligations until the situation is corrected***.

So clearly, the lesson of this blog post is: do not let your father do repairs at your house or any rental properties.

*He’s actually in Redondo Beach, which is cool. And where John Travolta’s character in Pulp Fiction resides.

** Stoiber v. Honeychuck, 101 CA3d 903 (1980)

***Green v. Superior Court, 10 Cal.3d 151 (1974).

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA

It was just a few months ago when the tenants were in the office signing the one year lease agreement. The leasing agent followed the office procedures and made sure to review the lease terms and obligations prior to asking for binding signatures. Then with the swipe of a pen the property was considered off the market and occupied for the year.

So, it can be somewhat frustrating when two months later you receive the dreaded call from the tenants stating that for some unforeseen reason they need to move out of the property earlier than expected, consequently breaking their lease agreement. As a property management expert, and owner of San Diego Premier Property Management, I’ve had the opportunity to prepare, execute, and negotiate lease agreements for the better part of a decade, and I can say with all honesty that this scenario happens on a regular basis to the most qualified of tenants.

Whether the breach occurs one month or six months into the one year lease agreement it is important to understand that the lease agreement, and the terms agreed upon and signed by both parties constitute a legally binding contract that when breached can carry monetary and legal consequences toward the tenant. With that said, the situation doesn’t have to escalate to a legal issue since it can be mitigated to the benefit of both parties. If the lease has an opt out clause then advise the tenants of the cost associated with that clause and make arrangements to cancel the existing lease agreement in writing. If not then I suggest reminding the tenants that they are legally responsible for the loss of rental proceeds for the remainder of the lease term until the property is re-rented. However, with their willingness and cooperation to assist in finding a replacement tenant they could minimize any potential out of pocket cost and help find a solution that limits rental losses in exchange for an early lease termination.

If the tenant agrees to assist with finding a replacement occupant there are many things they can do that will minimize or completely avoid out of pocket expenses for both parties. Having the existing tenant pay for advertising and marketing of the property (craigslist, newspaper, etc), conduct daily showings, allow easy access for potential applicants, and keep the unit spotless for showings are all ways they can assist with re-renting the property. If the existing tenant is successful in finding a new applicant which meets all of your office criteria and written rental requirements then a solution may have been found.

There is no guarantee for success in this situation but offering the tenants an option that includes paying for advertising and marketing, keeping the property spotless, and even conducting showings with potential applicants might make for a winning solution that minimizes rental proceed losses and allows the tenant to move on without incurring costly fees and blemishes on their credit and rental history.

By Linda Day Harrison, theBrokerList, Chicago, IL

Today more than ever, many people do not have traditional sources of employment income. With the job market shrinking, many of us are working for ourselves and are creating jobs by starting businesses and new ventures. With that being said, how does a self-employed individual purchase a residential or commercial location with the stringent financing requirements currently in place?

Simple! Look at properties with owner-financing. What is owner-financing? Owner-financing is when the seller of a property is in a position to act in the capacity of a lender. The seller accepts a down-payment and an agreement for repayment.

The advantages are tremendous and can be a win-win for both parties. Advantages include:

1. More favorable rates and terms.
2. Easier qualification process.
3. Able to sell a property in a depressed market.
4. Seller can get a much higher return than other vehicles such as a CD.
5. Seller can receive a substantial down payment.
6. Tenant can now become an owner.
7. Less closing costs.

Now like anything, there are many pros and cons depending on each seller and buyer’s tax consequences and personal financial situation, including whether or not the property is held free and clear. Owner-financing should definitely be a serious avenue to consider when selling a property and when evaluating your lease vs. purchase decision on residential or commercial property.

An attorney is needed to assist in the process and as a buyer, you should still do your homework, via a due diligence period. Whether buying or selling, always evaluate the pros and cons of owner-financing and its impact on your next real estate opportunity.

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia

Sadly, when carrying out due diligences many agents buying a rent roll are not sure what they are looking for. This lack of understanding means most pay a hasty glance over files and computer reports. On the surface they all look fine, but it’s a bit like an iceberg, we need to understand what looms below.

We are all in the industry because we are good sales people. Ultimately, isn’t this industry all about our ability to sell? Yes, we promote the best features and benefits of our products and services, but as selling specialists we also need to understand that whilst it looks good on the surface, there may be landmines below. I’m not saying don’t buy rent rolls, just be aware of what it is you are purchasing.

So, the first thing is to understand due diligence. There are two kinds of due diligence – financial and operational.

When purchasing rent rolls, financial due diligence is undertaken by a valuer. In many instances, the valuer is engaged by the bank to conduct an evaluation of the business prior to lending. If you are not borrowing for the business, I recommend a financial due diligence be conducted nonetheless.

Operational due diligence is the second type. This is just as critical as the financial due diligence. Not having an operational due diligence prepared would be like buying shares in a company that is on the verge of bankruptcy and hoping a healthy bottom line and large profit are miraculously going to be uncovered so you make a mint (not going to happen!). Buying a rent roll and believing that all is just as they say it is, is usually not the case. There are risks and with these risks the stakes are high!

So, what are we looking for in an operational due diligence? We are seeking information on what I refer to as the “critical data” – critical numbers, critical factors, and critical measurements. For example, historical information about the business processes, and client loyalty such as the average number of years a client has had their property managed by the selling agency.

When conducting the due diligence the true story about the business unfolds. How much should you really pay for managements that have been secured within the past 12 months? Why pay top dollar for clients who, by this stage, are generally not loyal to the selling agency?

By conducting due diligence we are seeking information on the history of the longevity of the current properties under management. This information is essential to understanding the risk factor in relation to retention of the purchased managements. Why? It is important to understand why these clients have engaged the services of the current agency to manage their property. Did they go through a thorough selection process? They may have interviewed the buying agency and decided against them. How likely are they to transfer across if this is the case? The client may be annoyed that they have signed up their management with the selling agency. Or they may feel deceived that they were not advised that selling was an option in the near future.

When purchasing a rent roll, the due diligence needs to have information in relation to the history of the average number of years the properties have been under management along with a breakdown of the percentage of number of years managed. If the highest percentage is in the 12 months or less percentile then the risk factor is high. Remembering though that operational due diligence provides information on risk factor and is not a valuation. In saying that though, following your due diligence you are in a position to re-evaluate your current offer and either collapse the offer if the risks are too high or decide the initial offer is far too much.

It is important to remember that a due diligence is carried out as part of the conditions of the contract to purchase. The purpose of the due diligence is to provide factual information as to whether the purchase is a sound investment. Due diligence forms part of the conditions of the contract and needs to be finalized within a certain time period. This means that just like a property purchase that is subject to a building inspection, if the due diligence uncovers areas of concern you have the option to crash the contract. Likewise, taking into consideration the information that the building inspection has uncovered, you could renegotiate another price. A due diligence on a rent roll is no different.

I look forward to uncovering more of the story behind the operational due diligence in upcoming blog posts. In the meantime, if you are considering purchasing a rent roll, don’t get caught up in the hype of purchasing as quickly as possible or the need to buy out your “opposition”. Tread carefully, diligently, and at a pace that you set and not the broker selling the rent roll to ensure you avoid the landmines!

By Linda Day Harrison, theBrokerList, Chicago, IL

If you like to read great business books and gobble up terms that help managers get the job done, there is one I want you to never forget, MBWA! Not only is it effective and powerful, but it is also good for your health! Here are variations on its commonly known names:

The Acronym: MBWA
Management by Walking Around
Management by Wandering Around
Management by Walking About
Manage by Walking Around

My own version and personal favorite is – Property Management by Walking Around (PMBWA). It is not easy because you have to push yourself away from the desk. Get out and just start walking around. Do nothing but walk. That is all you have to do. Start at the top, the bottom, the outside, the inside, or any part you would like. If you push yourself away from the office you will be out there in the thick of things. Walk around the parking lots, mechanical rooms, corridors, vacant spaces, other departments of the company, but just walk. Or as a former, very successful boss of mine said, “Get out there in look ‘em in the eye!”

While you are walking ask questions, talk to people, make inquiries, and introduce yourself to strangers. Ask technicians what they are working on and ask contractors what project or task they are performing for the property? Do not have a plan or carry anything with you but your smartphone. If you must take a note, just use the camera feature, call yourself and leave a voicemail, or a record a message. Do not carry notepads or anything else at all, because the notepad might make you think you need to find things to write down. It can also be a intimidating if you’re taking notes during a conversation with a colleague that is supposed to be casual. Let your mind be free and just walk. Wherever you go, information will be gleaned. There is insight to be had from the properties you manage, as well as your own property. It is talking to you, you just have to listen.

It is not easy, but consider doing PMBWA regularly. Nobody expects a property manager to just walk around with no plan, direction, or destination! It will puzzle your staff, intrigue your customers, and create interest from your contractors. Remember, this is NOT a building inspection. You are managing your property just by walking around. It sounds unbelievable, but I bet you that you will learn so much and find out so many things that it will spark enthusiasm, excitement, or bring resolution to a matter you have contemplated or been challenged by.

Try it and let us know how it worked for you!