Property Management in the Perspective of a Landlord - Case Study Example

Property Management in the perspective of a landlord A Property Manager require much awareness that managing property needs step by step approach through the overall planning process, which includes establishing the vision of development, stock taking of resources, managing the natural resources, setting key goals, drawing the ideal plan using an overlay, setting priorities, costing, developing an action calendar, and monitoring and reviewing the plan progresses in each stage. Striking appropriate balance between landlord and tenant is a difficult issue, and at a very basic level all landlord and tenant relationships reflect a division of interests, or a split in ownership. However, “the reforms of recent years—enfranchisement rights, control of management costs, transfer of management to leaseholders, and the introduction of common hold—all stem from this concern that the division of interest in the residential lease hold relationship is no longer appropriate” (Bright, Susan 2006.). There is bright future for every landlord to expand their activity and convert the property to a profitable one. Overview and special management problems: The background of the case under review is as follows. The client, a local property company, having fairly good resources, owns 9 out of 12 properties comprising a terrace of three storey shops and living accommodation, in a reasonably popular older residential area. Two competing blocks near this property, which is in better condition, find it difficult to attract retail tenants. Each unit of the property has ground floor retail shop and poor quality residential accommodation on the other two floors. The units are under 10-year full repairing and insuring tenancies. Of the nine shops in ground floor only 7 are engaged in commercial activity on monthly tenancies, whereas one is used as residential purpose and other is void. In 3 cases shops and living accommodations are let as a single unit, and first and second floor accommodations of 6 properties have weekly tenancy. One property is in poor condition, another tenant has vacated part of her unit and permitted another person to occupy and make payment to her, and third tenant has decided to vacate. Access to the living accommodation is primary through the shops. The lease will expire within next 4 years, but all pf the business tenants have the legal right to renew their tenancies. A critical analysis of the case reveals that an old residential unit has been converted to commercial-cum-dwelling units, as it shows access to living accommodation is primarily through shops. An overview of the general problem is from the short-term tenancy to the property. The shops let on monthly and residential accommodation let on weekly basis of tenancy shows poor property management in a premise having 10 year lease. Though the tenancy is on full repairing and insuring lease the condition of property is very poor, which implies the tenants are least bothered to comply with lease terms and conditions. Letting another person to occupy the vacant portion and collecting rent by a particular tenant also throws light on the inefficiency on the part of property manager. Making independent access to each dwelling unit and maintaining order and cleanliness in the premises will be the special management problem. Routine management tasks The tenants have no right to complain against the poor upkeep of the building as it is their responsibility according to the lease terms to undertake repairing and insuring. Major problem encountered in day to day affairs will be in the area of collecting rent from short term-tenants and from those who sub-let and collect rent themselves. If the subletting is done without the written approval of the landlord it should be stopped forthwith, and if possible eviction notice served to them. “Tenants should not cause or permit the premises to be occupied or used in breach of any statutory restriction or in breach of any requirements of or for planning consent or in breach of any Houses in Multiple Occupation(HMO) regulation scheme from time to time in force.” (Bright, Susan 2006.) Possibilities for development We should remember that Private Rented Sector has an important role to play in helping to alleviate homelessness. Short-term renting, particularly residential leases, are grant of property interest like a consumer contract. Providing affordable, desirable property for the upward population under Short Assured Tenancy will attract inward investment and allow continued diversification. Thus, there is much potential to improve this older housing block to a short term renting. At present, condition of the property is very disappointing as neither the landlord nor the tenants are paying attention to its maintenance or repair. Before arriving at any strategy to make the property economically viable we should take into consideration the reasons why the two adjacent buildings, which are in good condition, are not attracting tenants. From the basic information it is clear that the area has not developed from an old residential locality in to a commercially important spot. This conclusion is supported from the approach of the owner, with considerable resources, not venturing to repair or maintain the building. Thus, routine management task will arise from collecting rent from short term tenants and shoppers to setting right the day to day affairs of the property. To put the functioning of the property in right track tenancy right is to be evaluated to ascertain actual tenants with 10 year lease hold rights and identify sub tenants. Government rules provide that “a default or violation of an obligation of tenancy of lease agreement would enable the landlord to bring a breach of lease action to terminate the tenancy. If the landlord wishes to oppose the grant of a new tenancy, form 2 in Schedule 2 to the Landlord and Tenant Act 1954, Part 2 (Notices) Regulations 2004, should be filed.” (Statutory instrument 2004). Those tenants who are not adhering to lease agreement terms and conditions should be served notice to comply with it and failing which to evict the place. The owner has a better chance to vacate the tenants, as majority might be running their tenancy for the sixth year and evicting them before competing seventh year term will naturally deprive their individual lease-hold rights. The failure of the tenants to follow the repair or insurance terms is very much evident from the present condition, and violation of the lease terms could be used against them. Acting at the earliest will be more profitable to the owners. Strategies for future investment management Perhaps the day to day management of the 3 other units in the premises, which are not owned by this company should be used as a yard stick to asses and plan medium strategy. With strict monitoring of the tenants and applying lease terms and conditions to the strictest form, it will be possible to overhaul present situation. As a long term strategy, modification of the building requires planning and engaging construction managers, preparing basing alteration plan and approval from local authority. It is obligatory on landlord to adhere to Building Code of the area and list in detail the building standard material and costs necessary to make the premises suitable for occupancy, and also have certificate of occupancy from the local government agency or building department. Where the landlord leases separate portions of his property to different tenants and reserves under his control the passage way and stairways, and other parts of the property for common use of all tenants, he must then exercise ordinary care and diligence to maintain the retained portion in a reasonably safe condition. When the owner has parted with his control, the tenant has the burden of the proper up keeping of the premises in the absence of an agreement to the contrary. Hence, in the present case under review it will be feasible to convert the property to short-term dwelling units. At the same time small business tenants, who make a significant contribution to the economy, need better protection, and new lease terms should be framed and executed for securing future of the property. Works cited Bright, Susan (Edr). Landlord and Tenant Law: Past, Present and Future. New York: Falcon Chambers (Hart Publishing). 2006. The Landlord and Tenant Act 1954, Part 2 (Notices) Regulation 2004. Statutory Instrument 2004 No 1005. Crown. 6 Apr. 2004. 7 Dec. 2007 . Read More