Don’t give your building caretaker too much power
Leaving your property completely in the hands of an unsupervised caretaker can put you at risk for theft and fraud, as seen in these examples from our files.
Not only do we manage Commercial property but we also manage apartment building for several of our clients.
Something I have found frightening is how many landlords give free reign to their resident caretakers to essentially manage the building on their behalf.
This is never a good idea. At a minimum, it puts your building at risk for theft and fraud.
Some of the occurrences I have come across recently include:
- Resident caretakers providing a rent roll to the landlord but omitting parking and locker income…which they conveniently pocket themselves.
- Kiting – This is when a caretaker borrows from the cash flow of the building without the knowledge of the landlord. They intend to pay it back but many times it never happens.
- Caretakers who charge extra for performing janitorial work at the building. The landlord pays for the work but the work never gets done.
- A caretaker claiming that a unit is vacant – but it is actually rented on a short term basis to a friend with the funds going to the caretaker.
- The rent for the caretaker’s suite and that of their friends are sometimes significantly below market value.
Last week I talked about Real Estate not being a passive investment. Some of the occurrences I’ve just mentioned underscore why it is not a passive investment. As a landlord, you would be wise to manage your caretaker and not have the caretaker convince you to leave the property in their hands without supervision.
Offshore owners and owners who travel frequently are particularity vulnerable.
Some landlords feel that their properties are too small to be professionally managed, but unless they have the time and expertise to do it well, they can run into problems like my friend did…
During my travels, I’ve noticed that professional property management isn’t something you find worldwide – much depends on local building, and health and safety regulations…
If you’d like to see what a client-focused property management company can do for you,
please contact our office at 604 873 8591.