Critical lease dates are those dates that apply to important facts and events in any managed property. When you manage complex properties with many tenants, the critical dates activity becomes more complex and active. In all reality, if you miss a critical date, you can miss a really important issue in the managed property and the tenants lease. Some of those dates may not be ‘retrievable’ if the date has passed.
There would be quite a few property managers out there that know what I am saying here. Many of them would have missed a critical date and then struggled with the issue of rectification. Landlord and tenant relations get very strained when you miss a date or event in a lease. The property manager also looks quite ‘inefficient’ and ‘unprofessional’.
So just how can you deal with this problem? You should review every property lease and every tenant lease in great detail to extract the dates that are important and that must be actioned at some time over the lease term or tenant occupation. Those dates are then entered into a reliable diary system to ‘flag’ the event for you well in advance.
As with all computer software solutions in commercial property management, if you put ‘rubbish’ in, you will get ‘rubbish’ out. Accuracy in data collation and entry of critical dates is really important. When you take over a new property management landlord, or property, the extra time spent at the time of property handover in data review and collation is very valuable. Over time you will thereby keep matters under control and fewer problems will occur.
Here are some items that can be important in your establishment of a critical dates reporting system:
- Understand the timing and method of all rent reviews. They will have lead times and trigger dates. They will also have processes that must occur as part of them being actioned. All of this information will be in the leases.
- An option for a further lease term may exist in some leases. That being the case, work at least 9 to 12 months out from the option dates so you can identify if the tenant wants to stay in the property. The exercise of the lease option is likely to involve a market rent review and that process will require preparation and actioning in accordance with the lease.
- Any lease is likely to have other special dates for unique things to occur. For example they may be insurance renewal, calculation and charging of property outgoings, refurbishment requirements, and safety reports or certificates. All of these matters should be found in the lease and entered into a reliable diary system of recall.
- A lease expiry date will be a trigger for action in marketing the premises to other tenants. Let’s say that a tenant is not going to be renewing their lease and you have been advised of that fact in advance; on that basis the marketing of the upcoming vacancy should occur.
Good lease management involves a good critical dates monitoring system. Develop something that works for you and make sure that you stay ahead of all of the dates that are entered into your system. This process also helps when a property manager leaves your business and some other property manager has to take over the property.