Property and Planning Studies - Case Study Example

Property and planning studies Property, as a concept is a social instrument, used to define a reservoir or flow of benefits, and is held as an investment asset and as an operation asset. As investment asset, like any other asset, property is expected to earn a rate of return on capital employed for the holder and appreciate in value. In the present case, under consideration, neither the property owner nor the tenant has adhered to the normal rules of tenancy and maintenance of the property. An overview of the general and special management problems it presents. The property is situated in an industrial area near dockside, next to main road that serves various industrial properties of varying ages and standards. The building in the property, a warehouse, is very old and is close to collapse, which requires immediate attention and repair. The compound wall is also in a dilapidated condition. The yard is not surfaced properly and partially flooded, was rented off under a five year repairing lease to a car wind glass repairing service, and is not being maintained properly. The property is now being used for rough car parking and for unlawful dumping of rubbish. This unauthorized parking and dumping of waste will become a habit and will damage the property altogether. Taking all these in to account it seems that at present property is as if neglected by the owner. The case depicts neither a Build-To-Suit nor As-Is-Condition lease, as tenure of the lease is for 5 years, not a long term, at the same time the tenant was prepared to maintain and repair the premises even though the state of affairs of the premises was not good. If the landlord rented out the property on the agreement of As-Is-Condition the tenant should not complain or threaten to share maintenance costs. It is important to consider the interests of the tenant as well as the land lord rationally, in this specific case. The impression of neglect itself needs to be changed by starting routine maintenance work and attention should be paid to secure the property by erecting compound wall. Otherwise more intruders will come up and misuse the property just like unlawful dumping noted already. It needs urgent maintenance work to maintain the property in a good working condition, and then appropriate mid term strategies can be chalked out to develop the property for the future utility. Major routine management tasks anticipated and outline to deal with them. As a property manager, first and foremost, the property has to be secured with compound wall, so that there is no encroachment. Maintenance work has to be done at the earliest so that the warehouse may not collapse; causing great loss to the landlord. The adjacent covered yard and work shop being used by a vehicle windscreen replacement firm, on lease, aught to carry out their work according to the provisions in the lease agreement. As the tenant was supposed to attend the maintenance work by his own the landlord needs to look in to the matter regarding security of his property, seriously. Warning by the tenant to leave the premises unless the landlord is ready to share the cost of repair work, has to taken care of, if he is profitable to the landlord. Another important thing needs to have attention is accumulation of flood water. As the property is situated near a dockside area, there is a lot of chance for flooding in the future. . In short, should protect the property by building a strong and appropriate boundary wall with gate in order to stop dumping the rubbish and encroachment, work must be undertaken to repair the warehouse, workshop, and covered yard. Possibilities of development and planning implications Property is undergoing ruin due to the attack of flood, lack of maintenance and proper attention, but it does not mean that there is no scope for development. First, it is a part of industrial area which is developing in a fast track and more over it is located in a dockside area, which even enhances the value of property and the property can be developed in a profitable way. If developed and maintained in a professional way, to meet the needs for booming industries coming up, will draw good chunk of profit. Second, the landowner himself can setup an industry or a service agency, and make good fortune out of this seemingly discarded property. Third, if not interested in any of the two options mentioned above, the landlord can still make profit by some small scale developmental work to the warehouse and covered yard and convert it to a riverside motel, and improving the facility of car parking will definitely attract more people, and source of income for the landlord. Two medium term strategies which can deal with future investment management and development for this property Objective of the property management is to maximize the value of the property and have to assess the financial value of the future flow of benefits that a property can produce. The function of the property manager is to plan strategically, take decisions, implement those decisions and then take responsibility for the consequences, whether or not those consequences are intended. It is evident that the landlord is not interested in the upkeep of the property and the tenant is preparing to vacate the premises because of non-cooperation from the owner and out of frustration. In the absence of clear insight into the lease terms and conditions it is difficult to suggest any alternative to the present issue. However, both tenant and owner should be aware that a lease agreement constitutes the entire agreement between the parties and sets forth their basic legal rights. Its terms should be clear with lease commencement and end date, purpose or use of premises, ground rent, escalation clause, first refusal right, leasehold improvements, operating cost escalation clause, renewal option, etc. As such, it is obligatory on their part to comply with the lease agreement terms. The medium and long term strategies are 1) to secure the property from encroachment, and evicting the tenant amicably and 2) overhauling the building transforming it into commercial use. Protecting the property from encroachment and preventing flood water logging is paramount on the part of a potential real-estate owner, and it is prime responsibility of the property manager to attend it. Investing in such a prime locality will definitely pay back, and plausibility of terminating the lease contract and evicting the tenant, vehicle wind screen replacement firm, should be ascertained, taking into consideration the legal aspects involved in it. Evicting the tenant is necessary, because it is the prime source promoting encroachment and defacement to the property, as vehicles are to be parked in the compound as a part of their service. Foreclosure of the lease may attract legal complications. Thus, an amicable settlement to the issue should be more appropriate and viable. As a property manager, a construction manager should be engaged for overhauling of the existing structure and transforming it into a property of commercial interest. It should be remembered that the “lower classes of buildings are progressively less desirable due to age, location or construction, and rents declines as the class of the property declines.” Thus, enhancing the property value with securing it from encroachment and converting the existing structure to a profitable institute will be the main agenda for future. These two strategies will pave for future development and investment strategies for the property. At the same time, remember that “every citizen is required to understand and follow fair housing laws and ethical practices generally, to create a more diverse, vibrant, and ultimately more profitable real estate market for every one. Excluding customers on the basis of their skin color or religion, serves only to limit the number of potential customers. In the real estate market it is just good business practice to treat everyone equally.” ( Galaty, Fillmore, W., Allaway, Wellington, J., and Kyle, Robert, C., 2002.) Reference Galaty, Fillmore, W., Allaway, Wellington, J., and Kyle, Robert, C., 2002. Modern Real Estate Practices (16th edition). Boston: Dearborn Read More