Check Out the Property Management First

 

We will bet our next six month's rent on the fact that less than 5%—maybe make that 2%—of all tenants ever check out the property management before signing a lease. Certainly, we have had tenants who ask who the property manager is, but few (if any), really check out the quality of service or even get to meet their building manager before entering into a three to five year marriage.

 

Who is your contact person? In most cases, tenants rarely meet landlords, let alone property managers. Usually, your broker (do not use the landlord's broker to represent you) will negotiate the transaction with the landlord's broker. Deal points will be agreed upon and the lawyers or brokers will hash out the lease language for final approval. You love the space and the building, but have you ever met anyone who works for the building other than the building architect who helped you pick out color samples or design your TI's?

 

Why interview the property manager?

 

The property manager is the main (probably the only) contact you have with the landlord after you move in. Most likely you will never see either your broker or the landlord's broker until it is time to renew or move. When it comes to day-to-day problems—lights not working, problems with neighbors, or even general lease issues—the property manager is the person you go to for resolution.

 

In addition, when it comes time to renew, property managers often act as the contact person. As part of their contract, they usually get 2-3% commission on any renewals. (Note: that's one reason they often try not to pay your representative on renewals, because it's money out of their pocket.) To them, it appears to be "easy money" at that. All they have to do is present the owner's offer based on the last deal and give the tenant a "take it or leave it" ultimatum. Heaven forbid the tenant has a representative who forces them to actually negotiate.

 

We typically keep a file on property managers based either on our dealings with them or the dealings of our clients. If it is a new building, we try to contact property management as soon as possible to let them know who our client is and how they, as property managers, can help them. We also let them know our role as our client's "in-house" real estate department. While most have never heard of a broker actually helping tenants or being in contact with them after the leases are signed, most are appreciative that we can offer help if problems arise.

 

While most are positive, one property manager we recall was so adversarial to tenants that word quickly spread by way of not only the brokerage community, but also by the tenants in her buildings. As a result, rarely did a tenant who had representation sign a lease in any building this manager controlled afterwards. Needless to say, ownership finally figured it out and you can fill in the end of that story.