Managing the physical asset for the property owner is a key to superior presentation and optimal function because it preserves—and sometimes improves—the condition and value of the property. Regular cleaning and repairs are necessary to keep tenants and residents comfortable and to ensure safety. Maintaining curb appeal and appearance are two of the easiest things to do, yet they are so often overlooked. The following lists the benefits of a comprehensive maintenance program:
Safety is also a critical issue. If an injury occurs because of neglected maintenance, the financial repercussions could be severe, even with liability insurance in place. Regular maintenance and repair reduces potential hazards and provides a safe environment for residents, on-site staff, prospective tenants, visitors, businesses, customers, and employees.
When a new or an experienced real estate manager takes over a new property, learning what systems are present and where they are located will be the first step in the maintenance program. For example, site plans should list the following locations (including but not limited to):
Although the list can be endless, merely documenting the existence of the various systems will save time and resources. Both large and small properties benefit from visual aids and lists, especially when employees change or when new vendors arrive on site to service the property. Such lists also help the maintenance process operate more smoothly and efficiently.
Once the inventory of systems is established, maintenance falls into the following five categories:
Regulatory compliance sometimes demands specific maintenance procedures and related activities. For example, some locales require fire drills that include evacuating all tenants and property staff from the building twice a year. Elevators, boilers, required postings, material safety data sheets (MSDS), and smoke alarms are just a few areas that are regulated by some form of government authority (more details are explained later in this chapter).
Inspections and monitoring of some equipment may be necessary to safeguard the environment from potentially hazardous emissions; this is more likely for industrial than other types of properties. Maintenance for regulatory compliance is not necessarily separate from the listed maintenance categories—most regulatory compliance activities fall into the preventive or the corrective maintenance categories. Establishing and enforcing strict standards for custodial and preventive maintenance can significantly reduce corrective and deferred maintenance, enhance value, and safeguard the health and safety of residents and tenants.
In the effort to minimize monthly operating expenses, owners sometimes unwisely have cleaning and maintenance work done only when absolutely necessary or in an emergency. On any property, it is inevitable that some deferred maintenance is evident, but too much will eventually result in excessive, costly repairs as well as a loss of value. For example, not heeding the manufacturer’s recommendations for maintaining a motor may temporarily delay the expense of a service call or replacement parts. However, excessive wear on the motor from lack of maintenance can lead to temporary loss of service from the motor and perhaps premature replacement, which will eventually cost much more than timely maintenance. Neglecting day-to-day maintenance significantly shortens the life span of major appliances and other real estate components such as HVAC equipment, furnaces, and roofs; the useful life of such equipment could be 15–25 years, but it could be significantly less if neglected.
Because of budget constraints, some deferred maintenance might have to be tolerated. When this occurs, list the deferred maintenance in order of priority and incorporate it into the list of routine maintenance procedures. That way, the staff can gradually reduce the list of deferred projects while they keep pace with ongoing maintenance. However, when deferred maintenance is a major factor in an owner’s lack of cash flow, disclosing these items and suggesting a systematic program for repair—whether such repair can be funded with a property’s cash flow or with an owner contribution—can serve multiple purposes and have positive results. These include increased tenancy, which increases cash flow; increased cash flow produces more income with which to continue these repairs, and the cycle continues until the asset is functioning as it should. It’s important for real estate managers to be honest with the property owners, regardless of whether funding is available to correct deficiencies. For instance, newer real estate managers may hesitate to report to their owners that the roof needs to be replaced. However, not disclosing such a need can lead to drastic consequences—it’s also contrary to the IREM Code of Professional Ethics.
Planning is the first step in any maintenance operation. This starts with a list of every component that requires maintenance, the type of maintenance required, how often each procedure is to be done, and how much time is required for a procedure. To develop this list, the condition of all functional components of the property should be surveyed. From the list, schedules for inspections and routine service should be developed. Inspection checklists contain some of the following points:
A keen sense of communication with maintenance personnel is vital to ensure they maintain work schedules and handle emergency work orders promptly. Since most cell phones include a digital camera and capabilities to text message, store contact information, and send/receive e-mails, maintenance personnel can download work orders to their phones by e-mail or from a web browser, and they can photographically document equipment repairs or damage in a unit. Service providers are increasingly becoming more sophisticated as well. For instance, some roof maintenance contractors allow customers to access the contractor’s database to view actual satellite images of the customer’s roof, and see all of the locations of each repair that occurred that month or year. Having such capabilities allows access to information on specific service reports showing exactly what was repaired, how much it cost, and any recommendations for future repairs. Asking service providers for information about their technological equipment and resources will help learn new ways to improve the management of the clients’ investments.
Inspection Reports. Scheduling inspections and cleaning is crucial. Some building components (lobbies, corridors) require daily cleaning or maintenance, while other components (fan motors) need only periodic maintenance to function optimally. However, areas like the rooftop may only require annual (or semiannual) inspection. Assemble these considerations in a master maintenance chart and use them to establish a regular and efficient pattern of inspection, cleaning, and repair. An inspection report (Exhibit 10.1) usually lists all of the major components of a property (e.g., grounds, foundations, exterior walls, electrical system), with numerous sub-entries under each major component. For example, transformers, circuit breakers, fuse boxes, wiring, wall plugs, light switches, and light fixtures might be subentries under “electrical system.” Space is provided to record the condition of the component, specific work to be done, an estimate of the cost of the work, and timing of re-inspection or whether an item is targeted for repairs in future budgets.
For residential properties, laundry rooms, recreational facilities, or other amenities would be added items for inspection along with appropriate subentries. A separate form will be used for inspection of apartment interiors, including individual rooms as items and appliances and fixtures as subentries. An office building form would include restrooms and other employee (or public) facilities—light wells or atriums, equipment rooms, fire escapes, and office interiors. Most real estate managers use separate forms for the building exterior and interior since it is just as important that they inspect the exterior as frequently as they inspect the interior common areas. A separate janitorial survey may be used to review the level of cleanliness of entrances, public areas, lobbies, restrooms, and their components. Inspections of vacancies can be recorded on a form that also serves as a work order to prepare the space for leasing renewal. Inspection of a shopping center includes examination of the surrounding area and access to the property, along with parking lots, signage, and vacant and occupied stores. Take note that not all inspections are completed by maintenance techs. In some organizations, inspection work orders are created to be performed by leasing and/or management staff as a way of documenting that the area was inspected—even when a formal report may not be required.
Maintenance Schedules. Inspection reports are coordinated with a maintenance schedule to ensure timely follow-up. The maintenance schedule (Exhibit 10.2) usually lists specific tasks and their frequencies. It may also provide spaces for assignment of specific personnel and a specific time of the week, month, or year for completion of the task. Preventive maintenance of equipment is usually addressed on a separate schedule that lists each piece of equipment and its location on the property, with columns for each month of the year so the maintenance supervisor can indicate how often work is to be done.
The organization of inspection reports and maintenance schedules depends on the design of the structure and its surroundings, the individual components that require service, and the availability of personnel qualified to do the work. The maintenance supervisor must integrate all of these factors into a logical and efficient program for maintaining the property. Certain types of software can expedite the scheduling process while also documenting specific maintenance activities and helping maintain adequate inventory of parts and supplies. Detailed budgets that document such services, their timing, and cost can be downloaded as spreadsheets and disseminated in multiple forms to fit the specific needs of any property type.
Establishing effective schedules may take time and experimentation, especially for an older property whose service records are incomplete. However, a new property should have a complete set of owner’s manuals and manufacturer’s recommendations that can facilitate development of an equipment maintenance program. In an effort to be paperless, it would be wise to bookmark or save the locations of manuals and important electronic documents for easy access.
Consider the specific timing of some maintenance activities—groundskeeping and custodial maintenance in particular—so residents or commercial tenants will be aware that the work is being done. In fact, such tasks become part of a tenant retention program. Seeing ongoing property maintenance gives tenants a sense of added value for their rent dollars, i.e., visible is valuable. On the other hand, some tenants and even residents prefer that these tasks be completed in silence, so to speak, to minimize inconvenience and noise issues.
Custodial maintenance (or janitorial maintenance/housekeeping) is the process of keeping the building clean for residents, commercial tenants, prospective tenants, and visitors. This element of custodial maintenance is most noticeable because it directly relates to residents’ or tenants’ sight and smell; it is the simplest form of corrective maintenance. The typical daily or weekly tasks also establish a pattern for inspecting every part of the building, which over time will help in avoiding deferred maintenance by discovering a need for more extensive corrective maintenance. Whether the task is performed by an employee or outside service providers, the mere frequency of the visits can help be the “eyes” on site when the real estate manager is away from the property.
Quantifying the level of traffic that passes through each section of the building will also help to schedule custodial maintenance. Some areas of the building may require hourly attention—others may require only an occasional spot inspection. Nevertheless, the custodial maintenance schedule should list all rooms and sections of the common areas in the building so they will be inspected regularly and kept clean. This list should include equipment rooms and supply closets, which might seem unusual because they are hidden from the public, but a well-organized supply room saves staff time when seeking parts and supplies and helps protect stored materials. Maintaining an orderly supply room also reminds staff of the wide-ranging importance of cleanliness throughout the property. The following sections describe some of the areas of a property that require frequent custodial, as well as corrective, maintenance.
Walks, Driveways, Parking Areas, and Grounds. The schedule of custodial maintenance duties for the property grounds depends partly on the time of year. In winter, all driveways, parking lots, and sidewalks must be free of ice and snow. Doormats must be inspected and cleaned regularly. In the spring, especially after the snow melts, the grounds should be cleared of litter that accumulated beneath the snow. In the summer, keeping the lawn mowed and weeded and taking care of flower beds will add greatly to the curb appeal of the property. The staff should look for serious cracks in the concrete or asphalt pavement and patch them if necessary; at the same time, they should remove weeds growing in these gaps and pick up any litter around the area. Bushes, shrubs, and trees should be watered and pruned regularly, and they should be replaced if they are dead or dying.
Exterior Walls and Components. The level of traffic around the outside of a property and the exterior finish of the building determine the frequency of custodial maintenance. In addition to cleaning dirt from the outside walls of the building, staff should regularly clean signs, light fixtures, touch up paint on interior and exterior areas, and fix all surface finishes; all of this aids in maintaining the overall aesthetic of the property exterior. Flowers, signage, and benches help “freshen” the look of the property—all evidence of having attention to detail and pride in managing the property.
Windows and Casings. Cleaning all of the windows and window casings of a building may or may not be done routinely depending on their location. Being in a high traffic area, windows in the lobby should be washed daily because they become the dirtiest and they are the first windows seen by everyone; they also reveal much about the overall cleanliness of the establishment. The interior and exterior of other windows may require cleaning semiannually or annually. Trained window washers will usually be contracted to clean window exteriors for high-rise buildings.
Interior Walls. Some interior walls may require frequent painting or cleaning, which can be time consuming and costly. To avoid that, maintenance staff should choose paint with a satin or semi-gloss finish, which is ideal for walls that need to be cleaned regularly. However, a satin finish should not be used where there are wall imperfections because it will make the imperfections more apparent. An eggshell finish is the most popular paint option—even though it lacks the shine and easy-to-clean surface of a gloss finish because it masks imperfections in the wall and is the easiest to apply in a single coat.
Elevators, Lobbies, and Other Common Areas. Elevators and lobbies require daily cleaning. Brass, mirrors, or other metallic surfaces need regular polishing, and floors need periodic refinishing. Corridors require the same level of attention, especially in high-traffic areas. Buildings that have lobby information desks have the advantage of personnel in attendance to keep those areas free of litter or report their condition to the appropriate personnel.
Amenities. People are attracted to amenities such as swimming pools and fitness centers. At the minimum, these areas require daily attention because of health, safety, and sanitation requirements. Most real estate managers contract for swimming pool maintenance because they must be vacuumed frequently, and chlorination or other chemical treatment levels must be monitored. Periodic testing of water samples may be required by law. If the facility supplies towels, staff must collect and wash them. Locker rooms and showers must be cleaned and disinfected frequently. Since these areas can be high-injury zones, frequent safety inspections and correction of faulty equipment, slippery surfaces, and other components are critical to preventing liability to the owner and/or the real estate management company.
Corrective maintenance is required for the following reasons:
Parking lot lighting is a perfect example of needed corrective maintenance. Over time, older light fixtures lose their ability to illuminate to the proper specifications. Correcting to the proper illumination for safety reasons would require that the fixture or the bulb be replaced—possibly to an even more energy-efficient compact fluorescent fixture or bulb.
Filling a pothole in a parking lot is another example of corrective maintenance. A deficiency is being corrected that is present either due to lack of proper preventive maintenance or because of specific incidents that need immediate attention. Routine inspections of inherent functionality problems may uncover other components that need correction.
Ensuring reliable functional performance and extending the useful life of building components defines preventive maintenance. For comfort, safety, and efficiency, all parts of the building must be regularly inspected and maintained. The number of maintenance personnel and their levels of skill and training will indicate how much of this work outside contractors should do. For reasons of safety, equipment availability, licensing requirements, and special skills involved, contractors should perform some types of preventive maintenance. The following sections discuss some components of properties that require regular preventive maintenance.
Walks, Driveways, Parking Areas, and Grounds. Most sidewalks, driveways, and parking lots are finished with asphalt, brick, or concrete. The effects of traffic, vibration, water freezing in winter, and extreme heat in summer cause these materials to crack. Regular patching or resurfacing will extend the life of these surfaces significantly, prolonging the need to replace them entirely. Parking lots have to be re-striped periodically to mark parking stalls and fire lanes. Landscaping that has been neglected may have to be redesigned to be more aesthetically pleasing. Lawns may require reseeding or sod replacement in the spring to restore areas where grass has died.
As an extension of preventive maintenance, grounds should be inspected especially during or immediately after high winds, severe thunderstorms, or heavy and prolonged rains. During storms, shrubs are easily uprooted, branches can be torn from trees, and signage and property lighting can be damaged; such issues require prompt attention to avoid potential hazards to people and vehicles.
Foundations. Building foundations should be inspected periodically for evidence of water penetration, settlement, cracks, and other signs of deterioration. To prevent further deterioration, staff should correct problems when they are discovered. When problems are severe, professional engineers should be consulted.
Exterior Walls. Preventive maintenance of exterior walls depends on the construction or finishing material. Because of repeated freezing and thawing, cracks can develop in the mortar of brick walls, and tuck-pointing—the periodic replacement of mortar—becomes necessary. It is recommended that brick exteriors also be sealed routinely to ensure water tightness. Painted exterior walls should be examined for cracked or peeling paint—occasional touch-ups will protect a painted surface, but complete repainting will eventually be necessary. Wood surfaces should be inspected for splintering, decay, and insect damage caused by termites, carpenter ants, etc. It is often possible to replace portions of a wood surface without completely refacing the building. To prevent re-infestation, a professional contractor must exterminate insects before repair work begins. Concrete walls must be checked for cracks or chipping. Glass curtain walls should be examined for stability and to detect cracks or other damage.
Roof. A roof endures extremes of heat, cold, and moisture. Over the years, an owner may have a building reroofed many times. Severe weather may weaken areas of the roof, necessitating occasional patching. The surface of the roof should be routinely inspected for wear. Roof inspections should be at least annual, and a qualified roofing contractor should usually accompany the manager. A thermal scan may help identify problems that are not visible to the naked eye—areas of heat loss due to absent, inadequate, or wet insulation.
Antennas and satellite dishes may be installed on the roof to provide communications and television services. These require little or no ongoing maintenance, but suggesting that the contractors who install these items use the owner’s roofer—to ensure roof penetrations are roofed-in and sealed properly—may be a wise policy to enforce. Installers must take care not to compromise the integrity of the roof system at any time. These areas should be carefully checked when inspecting the roof. If the roof system has a current warranty, any work performed on the roof by others must be completed in a manner that will not void the warranty.
Roofing Alternatives. Two major alternatives for roofing surfaces can lower costs and save energy: (1) reflective roofs and (2) green roofs.
Reflective Roofs. Reflective roofs generally lower costs because they reduce roof surface temperatures by preventing the sun’s heat from transferring into the building; as a result, they help downsize air-conditioning equipment. In fact, a reflective roof can even extend the roof life by reducing the amount of thermal shock that occurs on the roof’s surface.
Green Roofs. The other alternative is green roofs, which are basically extensions of an existing roof that require high-quality water proofing, root repellent, and drainage systems to support systems for growing plants. There are two types of green roofs: (1) intensive roofs, which are thicker and can support a wider variety of plants but are heavier and require more maintenance, and (2) extensive roofs, which are covered in a light layer of vegetation and are lighter than an intensive green roof. The following are a few general advantages of green roofs:
The Environmental Protection Agency (EPA) estimates that green roofs can save up to 25 percent of the building’s annual energy costs, and the Federal Energy Management Program (FEMP) has found that green roofs also double the roof’s life expectancy—equating to a savings of $8 to $10 per square foot. Obviously, the decision to establish a roofing alternative will be discussed with the owner during the management agreement and planning process to examine the maintenance involved in more detail. (The management plan and agreement are explained in Chapter 5.)
Gutters and Downspouts. Many buildings have exposed gutters and downspouts. These prevent the accumulation of water on the roof and protect the exterior walls from excessive water flow. Gutters usually have to be replaced as often as the roof. They should be inspected frequently, especially after heavy rains, and they must be kept clear of leaves and other accumulating debris. Some residential buildings have gutter guards and rain barrels at the end of their drain spouts, and others may have rain gardens. However, regular inspection is always important as a preventive measure.
Windows and Casings. In addition to cleaning, windows require maintenance of their moving parts and frames. The maintenance staff may have to install separate storm windows in the autumn and remove them in the spring. When windows need replacing, double-paned windows should be investigated because they may serve as their own storm windows; such windows are more applicable to residential properties. They are energy efficient in all seasons and require less maintenance. Governmental rebates may even be available for replacing windows, installing insulation, and adding other energy-saving upgrades on residential and commercial buildings. Any such inducements that might benefit an owner in cost-saving measures, tax rebates, or both. Newer office buildings usually have windows that do not open, and older buildings are often retrofitted to prevent the opening of windows to prevent injury in the case of high-rise buildings.
Elevators. Contract for elevator maintenance and work with the contractor to develop the system that is most efficient for handling the volume of traffic in the building. A typical elevator inspection form includes information on door opening/closing speed, alarms in the cabs, acceleration/deceleration, and the general smoothness of the ride. The elevator contractor will provide preventive maintenance such as lubricating parts, inspecting cables, and cleaning the rails. Inspections and testing by governmental authorities will be required on a regular and ongoing basis. Placards for emergency contacts and telephone, intercom systems, or emergency alarms (depending upon the type of elevator system) must be present and in good working order at all times.
Strategies can be made to protect the building’s elevators from improper use. While not specifically preventive maintenance, such strategies can minimize damage and prolong an elevator’s life. To discourage use of passenger elevators for freight, and vice versa, the freight elevator should be separate from those for passengers. However, in buildings that lack a freight elevator, passenger elevators must serve as freight elevators. The risk of damage to passenger elevators used for freight warrants a creative approach. One possibility is to reserve one of the passenger elevators for freight use and make it accessible only to appropriate personnel who have a key. When using that practice, pads should be provided for the elevator walls and designate a particular time of day when the elevators may be used for moving freight. This will avert disruption during periods of peak traffic. Another possibility is to load furniture on the top of the elevator cab rather than inside. The ability to do this depends on the system in place (elevator cab construction, door controls, etc.).
Stairways. No matter how they are constructed, stairways require close attention because they are frequently the site of accidents involving injuries. The most common challenge is keeping stairways free of debris. Step surfaces show wear over time, and this alone can be a potential hazard because the surface (tread) is no longer smooth or level. Stairs should be inspected for any loose or deteriorating steps. Stair edges should be clearly marked if it is difficult to distinguish the surfaces of successive steps. All stairwells should have adequate lighting for emergencies as well as for normal use; they should have handrails that are easy to grasp and are securely fastened to the wall or staircase. Stairway maintenance also includes fire escapes, which must be kept free of debris to serve as escape routes during emergencies. Inspections to ensure that the fire escapes are working properly should occur regularly.
Heating, Ventilation, and Air-Conditioning (HVAC) Equipment. Controlling the climate in buildings is an ongoing challenge. In addition to controlling temperature, HVAC equipment regulates humidity, supplies fresh air to the building, and removes stale air. Regulating all of these conditions requires a system of controls and precise monitoring of each room or floor in the building. A malfunction or error in programming this equipment can cause tenants extreme discomfort. Maintenance staff may be trained to clean and replace filters, lubricate portions of the mechanical equipment, or monitor thermostat settings. However, most real estate managers usually contract maintenance and repair of HVAC equipment unless the size of a property justifies the skilled labor needed for that work. Local ordinances may require licensing of boiler operators. Heating and air-conditioning systems usually require special maintenance for start-up and shutdown when the seasons change. It is important to note that the HVAC system of most buildings will be one of the most expensive components. Therefore, regular preventive maintenance will prolong the system’s life, lessen the need for costly repairs, and save dollars in the long run.
Electrical Network and Plumbing. As demand for electrical service grows, it must be monitored to determine if the capacity in the building can meet that demand. In particular, prospective commercial tenants should be asked about their electrical requirements to determine whether the building can accommodate them. An existing building can often be retrofitted for the electrical and network cabling required for computers and their adjunct equipment. However, that may be a major undertaking that warrants retrofitting the entire building, rather than only one tenant’s leased space.
The maintenance supervisor should regularly inspect all electrical wiring and all electrically operated pumps and motors. All property staff should know the location of transformers on, or near, the property, the location of the transformer identification number, and the contact information of the electric utility company. The main shutoff switch should be identified, and employees should know its location in the building and the circumstances that warrant disconnecting the property from its power supply. Licensed personnel should make any changes in the wiring and appropriately document those changes.
Plumbing should be inspected regularly. Work required to clear drains, repair leaks, and otherwise maintain the integrity of the system should be done immediately. Residential properties usually have more plumbing fixtures than any other property type. Consequently, they have the most plumbing problems. To minimize service calls and reduce the amount of toxic drain cleaner released into the environment, residents should learn responsible and proper use of plumbing fixtures. It would be wise to give commercial tenants information to use to educate their employees about proper garbage disposal—and what not to put into sinks or toilets. The main water shutoff valve should be clearly identified, and employees should know its location in the building and the circumstances that warrant its use.1
Gas Lines. Only trained personnel from the gas company should perform the maintenance of gas lines. Maintenance staff should be alerted in case there are gas leaks, and to report them to the proper authorities while initiating appropriate emergency procedures. If the property is equipped with a primary shutoff valve and the gas company provides instructions on how to use it, that information should be conveyed to the employees.
Co-generation Equipment. Maintenance staff may be responsible for certain routine tasks on properties that produce electricity using a co-generation plant—also referred to as combined heat and power (CHP) plant—which uses a heat engine or a power station to simultaneously generate both electricity and useful heat. This is one of the most common forms of energy recycling; however, authorized contractors must perform most preventive and corrective maintenance. These systems can include wind power, solar power, and other energy-producing sources; if present, such systems require maintenance by qualified personnel or contractors.
Fire Prevention and Safety Equipment. To minimize the threat to life and property from fire, everyone in the building should be informed about fire safety procedures, make sure that the associated equipment is functioning properly, and verify that all equipment meets local fire codes. All fire exits and fire doors should be marked clearly and kept free of obstructions. Proper operation of fire doors, alarm systems, fire escapes, fire extinguishers, and interior sprinkler systems should be verified at least once a year. Certificates of inspection may be required, and maintenance may have to be contracted.
Most jurisdictions require the installation of smoke alarms. Batteries must be checked and replaced in smoke detectors that are not connected to a central system. Some jurisdictions even require supervised fire drills, especially for multistory office buildings. Regardless of requirements, routine drills should be provided for all property personnel, residents, and commercial tenants detailing the way to summon the fire department and to evacuate the building.
An outside service must recharge and tag fire extinguishers as prescribed by the manufacturer. In the United States, fire extinguishers are classified by the extinguishing material they contain.
Thousands of buildings catch fire every year, and thousands of people lose their lives in those fires. Real estate managers must know how to minimize the risk of fire and, in the event of a fire, how to properly react to minimize injuries and property damage.
The extinguishers should be placed by class according to the combustibles nearby.
Most real estate managers commonly install type ABC (dry chemical) extinguishers because they are effective against all types of fires. Fire-suppression systems in computer rooms may contain halogenated compounds (Halon) that are similar in action to carbon dioxide (CO2) gas.
Pest Control. An ongoing concern among real estate managers is the control of insect pests and other vermin. Most properties contract for a regular extermination service, and many states require licensed pest control operators. The frequency of the exterminator’s visits depends on the severity of infestation, the season, and the locale. Cockroaches are ubiquitous and particularly difficult to exterminate. Other troublesome insects are termites, carpenter ants, and fire ants. Because these insects burrow into foundations and wooden beams, they may be noticed only after they have done extensive damage. Larger rodents such as rats can infiltrate sewer lines and nest in walls, causing numerous other problems and damage as well.
To eliminate an infestation, fumigation may be necessary. However, if only one leased space is fumigated or sprayed after a tenant has vacated, the pests may not die—they may merely relocate to adjoining spaces. To ensure complete extermination, the exterminator should spray the entire building, or a large section of it, at one time. Properties whose tenants include restaurants or food stores are especially prone to vermin infestations. However, local health departments require most food stores and restaurants to spray periodically for pests.
Since mice, rats, and cockroaches thrive in unsanitary conditions, the most effective way to exterminate them is to remove their food sources. Residents and tenants should be informed about the proper frequency and method for disposing of garbage on the premises. If no place is available outside the building to maintain dumpsters, garbage must be stored inside the building. The garbage room (or storage area) should be inspected regularly—cracks in the walls and other types of damage provide conduits for pests to spread throughout the building. To control odors and inhibit bacterial and fungal growth, routine cleaning and disinfection of the garbage room are mandatory. The garbage room should be insulated from heat, especially if the room is near the furnace or boiler. Good lighting and painted walls encourage tenants to keep the room clean and facilitate the detection of insects on the walls. Regardless of where garbage is stored, a program to sort trash for recycling may also help control pests by concentrating the organic garbage in fewer containers; recycling of paper, glass, metals, and plastics is mandatory in some states.
Bed Bugs. Beginning in the late 1990s, particularly in the United States, bed bugs made a startling resurgence. Although the exact cause is not known, experts suspect the resurgence is associated with increased resistance of bed bugs to available pesticides, greater international and domestic travel, and the basic lack of knowledge regarding control of bed bugs due to their prolonged absence.2 With this increase of bed bug infestations, several states introduced legislation to mitigate this pest. The law in some states requires real estate managers to disclose existing or past problems with the bugs as well as address how to remedy the problem with the pests and who will pay for it.
Property owners are required to pay for the extermination of bed bugs if detected. However, if tenants and residents do not cooperate with the extermination efforts, they could be held responsible for subsequent treatment costs. In other states, real estate managers of larger apartment buildings are required to provide pamphlets to tenants detailing preventive methods and other information on bed bugs. Bed bug infestations are required to be exterminated as soon as they’re discovered—if immediate action is not taken, fines up to $300 per infested bedroom and/or $1,000 per infested common area could be enacted.3
Wildlife. Insects are not the only pests that cause disturbances. In many areas, squirrels, bats, birds, and other wildlife can also become “pests” and can cause serious damage to the outsides of buildings. Campus-style commercial and residential properties are particularly vulnerable. In certain situations, animals can also be hazardous to people—through scratches, bites, and disease transmission. As the habitats available for animals diminish, encounters with wildlife increase. Federal and state laws protect most wildlife species and their management; therefore, proactive measures should be taken to eliminate food sources and discourage habitats that attract animals. If certain issues exist, seek advice from wildlife rehabilitators, other wildlife experts, or animal control on additional ways to deter wildlife.
Deferred maintenance is the practice of postponing maintenance activities such as repairs on real property (or infrastructure) and personal property (or machinery) in order to save costs, meet budget funding levels, or realign available budget monies. The failure to perform needed repairs could lead to asset deterioration and ultimately asset impairment. Generally, a policy of continued deferred maintenance may result in higher costs, asset failure, and in some cases, health and safety implications. Real estate managers who take over the management of a property sometimes find that deferred maintenance exists, and a plan should immediately be put in place for a resolution.
Regulations enforced by local, state, and federal governments establish minimum standards for the safety of employees and building occupants and affect many maintenance procedures. Laws governing minimum standards change frequently, therefore it’s important to stay abreast of new laws and court interpretations. In addition, properties must comply with current environmental regulations, and compliance with maintenance practices relates to the safety, health, and well-being of tenants.
The Occupational Safety and Health Administration (OSHA) of the U.S. Department of Labor establishes job safety standards and is authorized to conduct inspections and to cite businesses for violations. OSHA standards should be made aware by real estate managers, especially those that apply to activities on the property. Unsafe work practices should be identified and employees should be provided with the proper equipment and knowledge for correct use. Appropriate and approved protective devices for equipment and personnel—shields on power saws, safety glasses, and rubber gloves, etc.—must be readily available.
Various chemicals and other materials used on site, such as cleaning products may include potentially combustible, flammable, or toxic substances. Personnel who work with such chemicals should be aware of the specific hazards and wear protective gloves and other appropriate equipment. Product labels identify the hazards and indicate how to treat persons who are exposed to the materials as well as how to dispose of the products and their containers properly. A material safety data sheet (MSDS) accompanies chemicals purchased in bulk in drums.
Temporary barriers or fencing should delineate construction and other work areas. The barriers should be clearly identified with signage, and they should be locked to prevent unauthorized persons from entering. Even such tasks as mopping and waxing lobby floors require clear delineation and signage to minimize the potential for slip- or trip-and-fall accidents. Even training employees on the proper use of ladders and how to bend and lift large items properly can help prevent accidents and injury.
Understanding proper ways to handle and dispose of wastes ensures safety, compliance with regulations, and preservation of the environment, yet waste disposal is only one aspect of environmental protection. Many materials once considered safe for use in buildings have been found to be harmful to humans. The U.S. EPA and state and local governments have enacted regulations to protect people and the environment. It’s important to know whether harmful materials are present on the property and whether they are potentially hazardous in their current state. The presence of hazardous materials can lower the property’s value, even if the materials do not pose a threat. Liability for leaving such materials in place or for removing them has received considerable attention.
The following lists some hazardous materials that can be found in buildings:
While indoor air quality (IAQ) problems can arise in any type of building, office buildings are the most susceptible. That is partially because their centralized HVAC systems serve such a large space and partially because they are built new or retrofitted as entirely enclosed systems (the windows cannot be opened), which results in poor air circulation. Contaminants, including volatile organic compounds (VOCs) and bacteria, can be distributed throughout the building, causing occupants to experience headaches, dizziness, drowsiness, nausea, and other symptoms of sick building syndrome (SBS). Legionnella bacteria, which can grow in fouled water-cooling towers, are the cause of Legionnaires’ disease (an often fatal respiratory infection). As yet, there is no federal regulation of IAQ, but ASHRAE established IAQ standards in the early 1990s that have since been formalized as Standard 62-1999; they continue to evolve. The standards specify minimum ventilation rates and IAQ that are acceptable to human occupants.
Mold or mold-like substances can exist in rental homes, condominiums, apartments, and commercial buildings. Water damage, leaks, improper ventilation, lack of proper temperatures, and other moisture intrusions or seepage are the primary sources of mold growth. Mold may adversely affect human health. However, it appears that the effect of mold on humans is short term rather than long term—removing the mold removes the effect. Not all mold that grows in buildings is “the toxic mold” that has sensationalized this subject. When mold is detected, actions to remediate the problem should be initiated promptly. A qualified contractor should remove the mold and repair the damaged area. Straightforward, informative communication with building occupants will help diminish the perception of mold hazards and minimize the risk of liability for the property’s owner and manager.
Many older buildings used to maintain their own fuel supply for their boilers, usually in storage tanks on the premises. The threat of contamination of groundwater by leaking underground storage tanks (LUSTs) has led to regulations requiring inspection and replacement of tanks that are still in use—those no longer in use may have to be removed. The presence of extra pipes may indicate a forgotten underground tank. If an abandoned tank is found on the premises, the alternatives for making it completely safe are to remove it or to fill it with cement. Always contact the local authorities regarding the legally correct procedure to use when dealing with environmental issues.
Not only are energy-saving features appealing to tenants, they can also function as a marketing tool to entice tenants who are concerned about the environmental performance of places where they live and work. Managing energy usage is an ongoing aspect of maintenance, and energy savings reduces operating costs and increases potential profit for the property. Energy conservation is a way to ensure comfort and reduce fuel consumption.
Basic Energy Conservation Programs. Some energy programs cost very little to implement. For example, a simple reminder to residents and commercial tenants to report leaky faucets can reduce wasted water and fuel, or implementing a policy for the cleaning staff to turn off the lights after cleaning a room can save an enormous amount of electricity. Installing occupancy sensors and timers for lighting in common areas that are not fully occupied (e.g., restrooms, conference rooms, private offices, and even supply closets) can have a dramatic impact on a building’s energy reduction. For example, a typical 100,000 sq. ft. office building can save more than $14,000 a year by installing occupancy light sensors.
It is important to note that all fluorescent bulbs contain extremely small amounts of mercury that can potentially be harmful to people and the environment if they are not disposed properly. If a bulb breaks, it is important to reduce mercury vapor exposure by having people and pets leave the room while the room airs out for about 10 minutes, shut off the HVAC system, and thoroughly collect all of the broken materials for disposal in an airtight container.
As an alternative to sensors and timers, something as simple as replacing conventional incandescent light bulbs with compact florescent lights (CFLs) can have long-lasting energy-saving results. Although the cost of CFLs is higher than the cost of regular incandescent bulbs, the life expectancy of CFLs is 10 times greater, and they use 75 percent less energy.
Adjusting thermostats throughout the building (especially in office buildings that have central HVAC systems) is another simple example of reducing energy costs. By setting the temperature a few degrees lower during the heating season and, similarly, a few degrees higher during the cooling season, it will create substantial energy and cost savings. Many residential buildings also have central HVAC systems, and these can be adjusted similarly. It is important to keep in mind that the temperature should satisfy the residents’ and/or tenants’ comfort levels. Local ordinances may dictate thermostat settings during certain hours of the day or night or require certain levels of heating (or cooling).
Other Energy Conservation Tactics. In certain situations, controls can be installed on existing equipment depending on age; however, other circumstances require replacing systems with new equipment. A retrofit is the replacement of an old building component with a new, energy-efficient one—installation of a new boiler, for example, especially one carrying the ENERGY STAR® label. Retrofitting can be very expensive, but the installation will eventually pay off, especially if the component was already due for replacement. Although the payback may take years, retrofitting can become a strong competitive advantage if energy costs soar; it can also increase the value of the property (lower expenses increase NOI) if NOI is normally used to calculate value.
The following examples provide a condensed list of other energy conservation tactics:
It’s important to learn about the energy consumption of a property, billing procedures used by utility companies, and energy control devices available in the market. Be aware of nonprofit organizations, such as the U.S. Green Building Council, which offers a Leadership in Energy and Environmental Design (LEED) certification—an internationally recognized green building certification system. The IREM Certified Sustainable Property (CSP) is another valuable certification that is an attainable, affordable, and meaningful recognition program for all property types.
The goal of energy management is to strike a balance between the initial cost of an energy-saving device or program and the amount of time before it pays for itself. Reducing expenses in this manner also improves NOI and adds to the property’s value. To optimize energy conservation, real estate managers should think creatively about energy costs and usage.
Successful maintenance programs contribute to a building’s security. Preventing crime in buildings will always be a difficult task—especially since many crimes do not result from forcible entry. Being complacent about security measures will create greater opportunities for crime. Therefore, regular inspections and thorough preventive measures are the best defenses against crime at any property.
Some real estate managers and property owners may consider a security staff or surveillance equipment crucial, but before making such an investment, the issue of liability should be considered. The presence of a security force or monitoring equipment—or the promotion of these services when marketing the property—may be construed as a security guarantee. If that guarantee fails, the owner or real estate manager could be liable. Despite this risk, security personnel are crucial for certain property types—especially office buildings and shopping centers.
Whatever security program is in place, staff should continually monitor to make sure the program functions exactly as planned. The following lists some basic action items to be shared with staff (and tenants of commercial properties):
In the aftermath of September 11, 2001, security tightened especially for large commercial properties, which has caused real estate managers to be more alert to the threat of terrorist acts, such as bomb threats, dangerous air pollutants (including biological and chemical agents), nearby hazardous materials spills, and other incidents. Real estate managers should work with local authorities in planning for emergencies while also staying abreast of alerts issued by the various governmental authorities. In this context, greater scrutiny of prospective tenants and of current tenants’ activities is also warranted. The U.S. Department of Homeland Security identifies an active shooter as an individual actively engaged in killing or attempting to kill people in a confined and populated area. In most cases, active shooters use firearms, and there is no pattern or method to their actions or selection of victims. Finding and presenting such information from various agencies to staff and tenants helps educate them to situations that may be unfamiliar and that would not otherwise be at the forefront of their minds.4
Since the real estate manager and the property owner are responsible for choosing the most effective method of maintaining the property, it’s important to find qualified personnel to do the work and keep records of the work performed.
Real estate managers can find personnel to do maintenance work by either hiring on-site staff, using management firm employees, or by working with contractors.
On-site Staff. Hiring on-site staff is a customary practice and an effective way to quickly provide custodial and preventive maintenance. The size of the building usually determines the number of people and the range of specialized skills required. However, it is important to note that on-site staff entails payroll expenses, human resource personnel, training, supervision, and an added liability to the owner and property management firm—all of which carries with it a large responsibility to manage. Essentially, real estate managers who are well qualified to lead, inspire, manage, and motivate employees will succeed in their daily duties.
Management Firm Employees. When providing nonroutine maintenance to a managed property, the management company will bill the property owner for labor and parts in addition to the regular management fee. With such an arrangement, disputes can sometimes arise between the real estate manager and the owner regarding the amount of extra charges. If the management company provides maintenance services, negotiating a totally separate fee or billing arrangement may be more appropriate. In addition, real estate management companies must be relatively competitive with the cost for services that could be provided by an outside contractor. However, slightly higher fees may be justified if tenants recognize the speed with which items are repaired or cleaned. Better service will help maintain higher occupancy and increased revenue in the long run. Added consideration must be given to increases in insurance rates for those who perform manual labor as opposed to general office work.
Contractors. For maintenance that requires specialized skills or licensing of those who do the work (e.g., elevator maintenance), contractors may be used in addition to, or in place of, on-site staff. Regular janitorial services might also be contracted, as well as independent security agencies that provide on-site security officers on contract.
All contractors should be properly insured, and if their particular duties require licensing, verify that their licenses are current. Janitorial, security, and other contracted personnel who will work on site for extended periods should undergo pre-employment criminal background checks. Contractors should be required to show proof that they have adequate and appropriate insurance, such as workers’ compensation, and to supply several references—all of which should be checked.
Before choosing contractors to perform certain jobs, draft precise specifications for the work describing details of the job, materials to be used, any special equipment or tools required, and potential time constraints that may apply. Contractors will then be invited to bid on the job either informally or as a formal request for proposal (RFP) process, which requires the bidder to provide written specifications for services. The contractors will submit quotations that state their analysis of the job, the time it will take, and the cost. After receiving the quotes, the contractor who will provide the necessary level of quality for the fairest price is selected. In some instances, stating a firm price is impossible, especially if a job (elevator repair, for instance) could take on a different character after the work begins.
The contractor may submit an estimate showing known costs (for parts) and specific rates to be charged for variable components of the job, an hourly rate for labor, and mileage charges for travel—also known as time and materials or T&M. Contractors or management companies typically use specific written contracts for technical or repetitive maintenance services; they may use purchase orders or work orders for work not covered by a contract.
It’s in the best interest of the real estate manager to develop and maintain positive relationships with the contractors that service the properties on a regular basis. Contractors can provide advice and help with cost-saving measures. Walking the property with these providers (such as a landscape contractor) frequently or at least once per year can uncover needs that may not have been identified during normal weekly or monthly servicing. Face-to-face or phone conversations help develop such relationships and can possibly clear up confusing details more efficiently than with e-mails or text messages.
Whether the maintenance work is done by on-site staff, employees of the management firm, contractors, or a combination of the three, the record-keeping requirements are essentially the same.
Work Order. Each specific maintenance or repair activity should have an individual work order (Exhibit 10.3) that indicates what, when, and who will do the work. Work orders are usually e-mailed directly to contractors from work-order programs such as Corrigo, which promotes mobility with wireless work orders. Most companies receive invoices through a service and never handle paper invoices. After the job is done, the worker should complete the work order and return it to the real estate manager or the maintenance office.
Maintenance Service Request. Tenants and residents usually complete a maintenance service request to initiate work to be done in their leased spaces. A staff member may also fill out the form when a request is phoned to the office. Most properties provide this form on their websites to be completed online.
The service request form should identify the tenant and the leased space, include contact information, and describe the work requested. Space should be available for the tenant to sign the form and grant permission for staff to enter the leased premises to determine the priority of the task. Some maintenance systems include an e-mail confirmation to the tenant of the work performed and any cost to be charged, along with a request for the tenant’s response as to whether the work was satisfactory.
An expanded form might include space for information about parts, scheduling, and actual work done, along with space for the maintenance worker to sign the form when the work is complete—or a space to make notes about a return visit if the repair could not be completed at that time. Such an expanded form effectively combines the service request with the work order form.
Work Log. Most real estate managers use a work log to record maintenance jobs on a cumulative basis. Some keep a master work log for all property staff and contractors that list what has been scheduled and the cost of the work (Exhibit 10.4). Supervisors may ask staff members to maintain a separate log record of assigned tasks and time allotments. The worker can check off the work as it is completed, indicating the actual time required, and reasons for any time variances (or if a task is not completed, the reason).
Some residential properties keep records of maintenance by the apartment (e.g., a list of when the carpet was last changed). It is also important to keep all documentation on competed service requests that explains when the request was completed, what the request entailed, and how long it took to complete. Documentation is extremely important for rare occasions when issues are raised in court by individuals claiming they were discriminated against due to their inclusion in a protected class in the timing, quality, and/or attitude of the workers in resolving maintenance issues.
Purchase Order. Staff members who are not directly involved with maintenance might complete a purchase order for supplies or equipment; this record has a direct effect on maintenance efficiency. A purchase order should show the following items:
Purchase orders help monitor inventory levels and ensure an adequate supply of replacement parts. Tracking inventory through purchase orders can prevent purchasing too many or too few supplies and spare parts—both situations are costly. Overstock represents cash that is not available for other uses, and having too many parts on hand can lead to pilferage by employees or tenants, or the potential for damage while being stored.
Inadequate inventory is also expensive, especially in terms of the staff time involved in making a special trip to purchase a part. Some companies require maintenance workers to come to the workplace with their own tools and supplies, which removes the need to track the inventory of supplies.
Inventory Control System. To verify inventory levels and track the frequency of restocking, develop an inventory control organization that provides for each item to be recorded as it is removed from inventory, and for the remaining inventory count (item total) to be reduced. Regular review of the list indicates what needs to be restocked and when. There are numerous software programs available specifically for property management firms to manage their overall maintenance program and work-order-request systems. Some programs even allow the user to incorporate requests directly into the inventory, accounting, purchase order, and invoicing systems.
Managing the physical asset of a property involves more than simply cleaning and repairs. A good maintenance program anticipates malfunctions and schedules regular examination and care of building components. More than anything else, appearance is the best marketing tool for any property. Custodial maintenance can optimally be scheduled by monitoring traffic flow through various parts of the building, and by making sure the maintenance staff know how often inspections are required under various conditions. Most importantly, preventive maintenance lowers repair costs and helps deter crime by ensuring that door locks, alarms, and strategic lighting in parking lots and stairwells are operational.
Meeting the terms of OSHA regulations is a must because it helps to provide a safe working environment—especially because maintenance and repair of equipment pose risks and hazards to staff. Staff should also understand the proper procedures for safely disposing items that carry a variety of chemicals—especially those used in cleaning supplies. If hazardous materials are on the premises, the staff should know the proper procedures for handling them in order to comply with federal, state, and local environmental regulations.
Establishing a habit and practice of keeping accurate records is an integral part of managing the physical asset. Using purchase orders and inventory controls saves the owner the costs of excessive or inadequate inventory. Clear and concise records are necessary for tracking specific maintenance work and when (or whether) it is completed. Real estate managers should always be attentive to and watchful of chronic maintenance issues and try to get to the root of each problem. As an industry, real estate managers do not want to become notorious for just treating the symptoms and not the disease.
Altogether, property maintenance of an owner’s asset, regardless of size or type of property, is under the authority of the real estate manager and is one of the most comprehensive and important functions in property management. Without an adequate product to rent or sell, there will be no renters or buyers—and thus no revenue for the owner. While this chapter provides an overview of some building components and their specific maintenance needs, keep in mind that no two properties are alike. Knowing all of the ins and outs of a property is the only way to develop a proper maintenance program to enhance the property’s longevity.
1. Managing septic systems where sewer systems are not available in the local area entail a whole host of inspections and maintenance, requiring staff to be well versed in their overall management—and with the various city, county, or state regulations that may govern such systems.
2. The Centers for Disease Control and Prevention (CDC) and the U.S. Environmental Protection Agency (EPA) have developed information that highlights emerging public health issues associated with bed bugs and additional information regarding safety and treatment in dealing with this pest.
3. Monitor social media to learn if resident or tenants are talking about bed bugs on the property. Since extermination can be quite costly, and it’s difficult to pass the expense onto the tenants/residents, some leases include a policy they will charge the tenant for extermination if they are detected more than a certain number of days after occupancy.
4. For more information about how to deal with an active shooter, read the Journal of Property Management article, “The Aftermath of Workplace Violence: Taking Control of the Situation” (Sep/Oct 2013, Vol 78, No. 5).