Property owners are often too burdened with other responsibilities, or too remote, to manage their property. When that property is a commercial or residential rental property, property owners also have legal duties to their tenants. These property owners can pass on many of their management duties to a property manager. While this may not necessarily relieve the property owner of his or her responsibility to fulfill these legal duties, it does give the property owner a way to ensure that they are performed well. Here are brief explanations of three types of property management:
Residential Property Management
Residential property management, or residential management, is an agreement between a property owner and a management company to manage residential rental properties. This property could be a home, duplex, townhouse, condominium, apartment, or other property that is rented to a tenant as a residence. While residential management agreements define the management company’s exact responsibilities, these responsibilities typically fall into two categories: dealing with tenants and fulfilling the property owner’s duty to provide a safe, habitable residence.
In the first category, a residential management company is typically responsible for listing vacant properties, processing rental applications and screening tenants, and collecting tenant signatures on rental agreements. Once the property has been rented, a residential management company bills tenants, collects rent, and deals with late or unpaid rent, including evictions. The residential management company is also responsible for overseeing tenant move-out and re-listing the property for rent at the end of the lease.
In the second category, a residential management company is typically responsible for fulfilling tenant repair requests as well as preventative maintenance to keep the rental property in a safe and habitable condition. Residential property management is also responsible for maintenance of common areas, such as parking lots, swimming pools, and fitness centers. These are often selling points with tenants, with about 60% of property managers saying in an Apartment Guide survey that swimming pools and fitness centers are among the top three most desired amenities for their tenants.
Commercial Property Management
Commercial property management is similar to residential property management, but where residential management is for residences, commercial management is for business space. The commercial property can take the form of warehouses, offices, retail stores, restaurants, paid parking lots, or any other form of business rental. Again, commercial management is responsible for dealing with tenants throughout the process from listing and leasing the property to supervising move-ins and move-outs. Commercial management is also responsible for collecting rent and dealing with late or unpaid rent.
The biggest difference between residential and commercial management is often not the types of responsibilities, but the scope of responsibilities. For example, when managing a commercial building, commercial management may be responsible for extensive fire and security measures, such as fire drills, lobby security guards, and after hours key card building access, to ensure the safety of tenants and their customers. Similarly, commercial management may be responsible for much more extensive maintenance than residential management, such as maintenance and repair of lobbies, elevators, stairwells, hallways, parking lots, and other common areas.
Commercial and residential property management is appropriate when a property owner is unable, or does not wish, to provide hands-on management of rental property. This most often occurs when the property owner has multiple properties or multiple tenants, such as an apartment complex, office building, or shopping mall, or lives in a location remote from the rental property. However, even when the property owner lives nearby, an experienced property management company can often offer experience, expertise, and infrastructure, such as contacts with repair companies, that the property owner lacks.
Homeowner Association Management
The third type of property management is homeowner association (or HOA) management. This type of property management is different in that the association management company is hired by a community’s homeowner association rather than a landlord. The HOA is composed of property owners in a community and, thus, the association management is answerable to owner-residents rather than tenant-residents. Since the HOA is not responsible for the maintenance and repair of residences, association management’s responsibility is often limited to maintenance and repair of common areas. Association management is also responsible for collecting homeowner fees and assisting the HOA in fulfilling its legal responsibilities such as holding meetings, enforcing HOA rules, and processing complaints.
Knowing the basics of these types of property management is key to understanding what types of services a certain company provides. If you’re looking for the best in HOA Management, contact Pioneer Real Estate today.