Richard Lee, CPM, LEED AP ( Richard.Lee@cushwake.com) is property manager at Cushman and Wakefield, AMO, in San Francisco.
VERIFY THAT YOUR MANAGEMENT COMPANY’S
INSURANCE COVERAGE IS ADEQUATE. Owners of
firms and property management directors cannot be
experts in every field, so asking the right questions
and becoming savvy business managers can help
control and manage internal corporate risks such as
claims pertaining to directors, officers and key executives; worker compensation; and alleged negligence.
After all, as the old Benjamin Franklin adage goes,
In property management, when anticipating risks and preparing for the unexpected, simply remember-
ing to make a M-O-V-E can make the all difference.
EXERCISE YOUR FRENCH AND LATIN LANGUAGE
SKILLS. That is, incorporate these two terms into
your day-to-day vocabulary: Force Majeure and
Force Majeure is a French phrase, translated to
mean “superior force or irresistible power,” resulting
from elements of nature as opposed to man-made;
when put into context and application, it is an unavoidable or unforeseeable accident or occurrence
preventing a party or parties from fulfilling a contract.
Learn the basics of Force Majeure and try to understand your insurance policy coverage limits and
exclusions for it, along with lease clauses pertaining
to lease terminations, defaults, loss rents and relocation expenses.
Although typically handled by an attorney, your
involvement will help those impacted better deal
with the matter at hand. Many landlords in parts of
Texas, Southern Florida and Puerto Rico were faced
with invoking Force Majeure in the aftermath of hurri-anes Harvey, Irma and Maria.
Next, carefully evaluate how property taxes impact net operating income (NOI), since this expense
category is one of the largest. Based on IREM’s
Income/Expense Analysis® data for total U.S. open shopping centers in 2016, taxes and insurance accounted
for 44. 7 percent of total operating costs.
Ad Valorem is a Latin phrase meaning “
according to value.”
The following illustrates how Ad Valorem could
have impact on a property: It was recently reported that the structure of the Millennium Tower—a
58-story residential luxury condominium high-rise
in downtown San Francisco—was allegedly sinking
17 inches and leaning 14 inches.
According to Riley McDermid, digital producer
of San Francisco Business Times, “Condo owners in San
Francisco’s sinking Millennium Tower have filed tax
assessments estimating their homes are now worth
$0, as issues surrounding the impact of the building’s
unexpected movement continue to crop up.”
In addition to tax appeals, lawsuits have been
filed by the vast majority of stakeholders—includ-
ing homeowner Joe Montana, the legendary all-star
quarterback of the San Francisco 49ers, who report-
edly filed a lawsuit against the developer along with
a property tax appeal.
This is just one example of Ad Valorem. It pays to
get acquainted with your county assessor or board of
appeals in the event you must file for a “reduction in
value” or “calamity claim.” In some cases, if your clients are commercial property investors, it’s essential
to understand how a refund from the tax collector
must be reported to commercial tenants during the
annual common area maintenance (CAM) reconciliation process.
“An ounce of prevention is worth a pound of cure.”
We as professionals grasp the concept, and it’s up to
us as leaders to communicate this to our team and to
emphasize how “the little stuff counts.”
Consulting with trusted experts in advance and
seeking evaluations for risk assessment and risk toler-
ance provides the necessary tools to remain in busi-
ness, and feeling adequately protected is certainly
worth the ounce of prevention.
how a refund