1. Managing Lease Lecture 3 By
Department of Construction & Real Estate Management
Faculty of Technology Management
(Session /2013)
10/11/2018

2. Lecture outlines Managing leases Managing leases negotiations
Managing tenant relations
Managing reports and insurance
Managing office administration
10/11/2018

3. Managing leases negotiations
Discuss the role the PM plays in negotiating lease. The processes are:
Qualifying a tenant
Visitor registration
Special needs
Lease application
Evaluation of data
Identity
Fair housing
Rental history
Financial status
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4. Managing leases negotiations
Negotiating the terms
Controlling the process
Cooperating brokers
Role of attorneys
Security deposits
Concessions
When to grant concessions
Rent schedules and rebates
Free rent
Length of lease period
Tenant alternatives
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5. Managing leases negotiations
Signing the agreement
Prospect hesitancy
Is this the best space available at the price?
Do the concessions meet my needs?
Should I act immediately?
Closing techniques
Follow up
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6. Managing tenant relations
The success of PMs greatly depends on their ability to maintain good relations with tenants.
Dissatisfied tenants will lead to:
High tenant turnover
Space vacancy
Increase cost of promotion and marketing
Good communication system is vital for the effective PM.
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7. Managing tenant relations
Establishing landlord-tenant relationship
Move-in inspections
Servicing the lease
Clear understanding of lease terms
Manager’s personal efforts
Meeting with tenant
Newsletters
Handling maintenance requests
Requests in writing
Speedy response
Excessive demands
Role of maintenance personnel
Commercial and industrial variations
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8. Managing tenant relations
Rent collection
When to pay
Encourage prompts payments
Late fees
Billing notices
Lease renewals
The value of stable tenants
Bargaining factors
The length of the new lease term
The extent of repairs, alterations or redecorating to be done
The amount of rent to be paid
Concessions
Rental rate
Proper notice
competition
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9. Managing tenant relations
Rental increase
Fact of life
Avoid tenant protest
Increase services
Terminating the tenancy
Required notice
Exit interview (feedback form before moving out)
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10. Managing tenant relations
Fair housing compliance (giving notice termination upon expiring lease term)
Inspection of the premises
Return of the security deposit
Retention for damages
Last month’s rent
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11. Managing tenant relations
Terminating the tenancy in court
Reasons for eviction (breach of contract)
Notice before eviction suit
Eviction suit (process of eviction and repossession of property)
Process of eviction suit must be served on the tenants
Actual removal (e.g. secure court order until the tenant physically remove from the property)
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12. Group Discussion (L3-2)
Sayid Bajrai manages a 75-unit apartment complex. One of his primary functions is to manage tenant relations. In one week, Sayid had to deal with 3 unpleasant tenant situations. One tenant, A, has been late with her payment. For the last three months, A has paid the rent only after receiving the landlord’s official ‘pay or quit the premises’ eviction notice. This month, A is late again.
A second tenant, B has repeatedly requests for various services and repairs, most of which have not been the landlord’s responsibility. B just told Sayid that he wants his apartment repainted. When Sayid told him that the landlord was not obligated to repaint the apartment in the middle of his one-year tenancy, he became very upset and threatened to start a tenant revolt.
The third tenant, C, who has been a model tenant for 5 years, just told Sayid that he would not be renewing his leases when it expires in 2 months. When Sayid asked him the reason of terminating the lease, he replied that he was uncomfortable with present management policies.
10/11/2018

13. Group Discussion (L3-2) Questions
What can Sayid do to solve the rent delinquency problem with A?
What can Sayid do to head off the threatened tenant revolt
How should Sayid respond to C’s statement about present management policies?
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14. Managing report and insurance
Operating reports
Financial report
Budget comparison statement
Income and expense report
Income
Vacant rental units
Support space (storage, offices)
Vacant space under major repair
Expenses
Wages paid to building personnel
General operating expenses
Maintenance expenses
Administrative costs
Profit & loss account
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15. Managing report and insurance
Operating budget
Estimate conservatively
Prepare explanation
Examine discrepancies
Allow for an evaluation of management of skills
Cash flow statement for tax purpose
Determining profitability
Tax records
Risk management and insurance
Type of insurance
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16. Managing the office administration
Establishing the management office
Location and layout
Office design
Files
Leases
Correspondence
Work order bids
Financial files
Permanent files
Equipment
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17. Managing the office administration
Computers and PM
Hardware & software
Staffing the management office
PM executive
Property supervisor (field manager)
On-site manager and building personnel
Purchasing agent
Office manager (controller)
Cashier –bookkeeper
Clerical personnel
Branch officers
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18. Managing the office administration
Determining management expenses
Direct cost
Indirect cost
Calculating the management fees
Per-unit cost method
Adjustment to perunit fee
Percentage rate
Management pricing worksheet
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19. References
Evans, M, (2007), Opportunities in Property Management Careers, McGrawHill.
Kyle, R, (2000), Property Management, 6th Edition, Dearborn.
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