Management Take-Over Checklist

Physical Plant Data

1. As-built drawings and specifications (including utility controls)
2. Inventory of leased space*
3. Air-conditioning units inventory (number of units, size, location) and service records
4. Inventory of operating equipment (elevators, escalators, major pumps, grease traps, electrical panels, alarm panels and systems, etc., including computerized controls)
5. Inventory of all personal property (tools, ladders, supplies, etc.)
6. Warranties, operations manuals, technical information on all equipment
7. Certificates of occupancy for all buildings on the property
8. Prior physical inspections (where available)
9. Phase I or phase II environmental audits (if available)
10. ADA compliance information
11. Key inventory and key system evaluation
12. Security audits
13. Inventory of all service parts on hand

Management Office Administration

1. Signed management contract
2. Insurance certificates received from clients
3. Insurance certificates sent to clients
4. Accounting notified of new account; account number requested
5. Local license and/or permits†

Project Files and Information

1. Copies of current year’s budget
2. Copies of past years’ budgets (where available)
3. Copies of operating statements (current and past years)
4. Copies of all leases and related documents*
5. Copies of latest estoppel certificates (if any)
6. Real estate tax files for current and past years*
7. Correspondence files, past and present
8. Rent roll*
9. Tenant invoices*
10. Delinquency list (current as well as historical)
11. Contractor files (contract, correspondence, and insurance certificates)
12. Service records on all operating equipment
13. Copies of all current and past available invoices
14. Contractor lists with emergency telephone numbers and contact names
15. Tenant or building occupant lists (including appropriate contact information)*
16. Client insurance policies (or summaries of policies, along with incident reporting requirements)
17. Pending litigation files
18. Lease summaries

Manager’s “To Do” List

1. Change building signage
2. Visit all building occupants; verify occupant list information*
3. Meet with all contractors; verify contracts and duties
4. Obtain new insurance certificates from contractors, naming Management Company and client as additional named insured parties
5. Set up new lease and project files*
6. Conduct physical inspection of the property; convey result to client
7. Review litigation file; advise attorneys of change in management
8. Interview all employees (consider job descriptions, property needs, competency, etc.)
9. Evaluate existing emergency procedures (update plan if necessary; write new plan if needed)
10. Conduct market survey*
11. To extent qualified, evaluate insurance coverages including amounts
12. Gather insurance reporting requirements
13. Inspect property from a risk management point of view
14. List all “notices to correct” from insurers and all notices of code violations along with actions taken or to be taken
15. Prepare management plan for operation of the property
16. Prepare tenant kit
17. Review and/or prepare towing policy
18. Contact local regulatory agencies
19. Locate and evaluate all life safety equipment

Accounting “To Do” List

1. Assign new project number; advise manager assigned to property
2. Establish bank account; obtain necessary signature(s)
3. Notify utility companies of new address for billing
4. Notify building occupants of new mailing address and payee for payments*
5. Notify contractors of new billing address
6. Notify lender of new management company and contact name (if appropriate)
7. Notify taxing authority of new address for billings
8. Incorporate new project into computer system
9. Verify security deposits; establish special account if appropriate
10. Obtain payroll records
11. Verify business license needs; make application where necessary
12. Obtain checks, deposit slips, approval stamps, endorsement stamps, etc.
13. Set up automatic payments (via electronic bank transfer) for mortgages, time payments, monthly contracts, etc.
14. Establish on-site petty cash fund and controls
15. Obtain owner’s taxpayer identification number for all tax matters
16. Establish accounting contact for all approvals
17. Establish tickler file for property (for rent increases, options, insurance expirations, etc.)
18. Establish accounting method and monthly reporting requirements for owners

Establish Payroll (when appropriate)‡

1. Verify information for all employees on site (rate of pay, vacation due, union status, etc.)
2. Set up employees on in-house payroll system (or third-party payroll processor if used)
3. Set up employees on hospitalization plan
4. Prepare employee files
5. Review job descriptions (verify with property manager)
6. Set up procedures for time cards/time sheets, etc., for timely payment
7. Evaluate hiring plan for compliance with equal employment opportunity laws
8. Set up overtime policy

Leasing and Marketing

1. Evaluate current leases/rental agreements
2. Evaluate current rents and terms
3. Become familiar with any current lease/rental negotiations
4. Evaluate current marketing efforts
5. Evaluate current marketing budget
6. Evaluate leasing materials
7. Evaluate any outside leasing companies/personnel
8. Evaluate marketing ad placement
9. Evaluate effectiveness of marketing efforts

Construction

1. Inventory all construction projects under way
2. Verify permitting if necessary
3. Evaluate contracts
4. Evaluate work completed against monies paid
5. Evaluate timing of work against estimated completion dates
6. Evaluate construction safety measures

* Indicates item may be identified more specifically for a residential or commercial property.
† Many jurisdictions require licenses or permits, and attendant fees, for such things as elevators, escalators, sprinkler systems, etc.
‡ If the management agreement requires continuation of existing employee benefits, prior payroll (and benefits) records will have to be obtained. It may be necessary to have employees complete new employment application forms as well as applications to participate in your benefit programs. Another early task is to review your employment policies with retained employees.

The listing here is not all-inclusive; it identifies a majority of the types of activities that are part of management take-over. However, a checklist form may be prepared in much greater detail, itemizing individual documents or records to be acquired or created, as may be appropriate for a management firm’s or its client’s needs.

For use as a form, you could set the checklist items in a narrower column at the left and include blank spaces in two columns (to the right) headed “date obtained” and “person responsible” (for initials on completion). Additional or different column headings may be necessary or appropriate for a particular usage.

For some types of properties, it may be appropriate to account for ground leases and/or master leases; any ongoing construction (completion of new development or rehabilitation) should be an added inspection item. It may be desirable, in general, to include resident or commercial tenant retention issues as a category to ensure that outstanding correspondence, pending maintenance requests, and other points of building occupants’ satisfaction with management are identified and addressed.

Further detailed information on strategizing management take-over can be found in the IREM publication Business Strategies for Real Estate Management Companies by Richard F. Muhlebach, CPM® and Alan A. Alexander, CPM®.

A downloadable version of a commercial management takeover checklist can be found in Commercial Forms & Tools.

A downloadable version of a residential management takeover checklist can be found in Residential Forms & Tools.