• Wendy Thomson

Commercial Property Management Authorities and Best Practice

Updated: Feb 8, 2021

I find it quite fascinating listening to commercial property managers talk about their approach to managing properties on behalf of their clients.

While each property manager handles their role differently, it is critical that all property managers remember that they are acting under an authority for and on behalf of their clients – the property owners and landlords.

To enable an agency to take on the management of any investment property, a correctly completed managing authority signed by all parties must first be in place.

The authority should detail the scope of the agency’s role and responsibilities as agreed by agent and landlord and include a list of management services, (e.g. commercial property management and lease administration), to be provided by the agency.

Under the Estate Agents Act 1980 and other regulations, managing agents are legally required to work within the scope of their managing authority – in other words, if a service is not included on the management authority, the agent is not legally authorised to act on behalf of the landlord in respect of that service.

Making decisions on behalf of any landlord without their authorisation or instruction, or working outside the scope of the managing authority, is very risky and could result in legal action.

Another issue I often come across, is managing agents making ‘blanket decisions’ on behalf of all their landlords. For example, the suspension of charging tenants for preventative maintenance when the terms of the lease and disclosure statements include the capacity to pass on any charges in respect of this.

Best practice and risk minimisation processes should include taking instructions from each landlord in regard to management of their commercial property investments, documenting these instructions and ensuring that the managing authority covers all services provided and is signed and dated by all parties.

Ongoing training for all commercial property management personnel is critical to expand their knowledge and to help them stay up to date – particularly with legal and industry best practice.

Are you planning for your personal and team training calendar for 2021?

Contact Wendy Who to discuss training or consultancy for your team.

© Wendy Thomson 2019