Recently my wife and I went on a shark diving trip. We departed from Fairhaven, MA and traveled about 90 minutes out to sea. After stopping at our destination, the captain threw out the chum and my wife and I got outfitted into our dive gear. We dove into the water to setup the finishing touches, and within seconds an eight-foot-long blue shark was less than 30 feet away from us.
As a member of the commercial real estate market you are no doubt familiar with the concept of “risk management.” But what does it really mean?
In short: protection.
Think about that for a moment. You would do anything to protect your loved ones and household assets from disaster, be it natural, accidental, or otherwise. Why wouldn’t you want to also do the same for your business which helps to support them?
But it isn’t just for sentimental reasons: if you fail to reduce the risks associated with possible disaster, you will likely be held liable and will have to pay a hefty price.
The risk of doom and gloom
As any property manager or commercial real estate owner knows, the unexpected can happen, and (unfortunately) it will likely happen when it is the most inconvenient. This could be anything from a power outage, equipment failure, fire, to flooding, etc.
But that doesn’t mean you should rest on your laurels until something happens.
Risk management is all about preparing your property management team for the worst, by providing them with the tools they need to significantly reduce the risk of exposure to liabilities. Failure to do so will likely result in scenarios like the ones that follow:
Scenario #1 – A tenant has space emergency
A tenant calls with an emergency in their space – none of their elevators are working. As a property manager, the first thing you think is: “I have to protect the tenant, and protect the building. If they can’t access the elevators, I will be held liable.” Ordinarily this would be a matter of calling up the appropriate vendor based on location, cost, and schedule to come and rectify the problem.
Unfortunately, there is another problem.
Twenty minutes after calling the vendor to repair the elevators, the property manager discovers that the vendor’s COI has expired. Great. Another inconvenience!
Now a problem that could have initially been taken care of in almost no time has been pushed back hours, because the vendor needs to provide proper documentation. As you can imagine, this is not an easy thing to explain to a tenant experiencing an emergency.
Getting, renewing, and maintaining certificates of insurance from your subcontractors, vendors, and tenants is an important way to manage risk and protect your business.
Having proper documentation helps to ensure that as a property manager or commercial real estate property owner, you don’t incur unexpected liabilities.
Being able to locate these documents in a timely manner is also crucial, and more often than not, a physical database of paperwork can negatively impact reaction time in an emergency.
A better choice is to select a Risk Management Platform like Building Engines, which makes it easier for property management teams to upload, update, track, filter, and search tenant and vendor COIs. It even sends you alerts to let you know if a vendor doesn’t have a COI on file when you attach them to a work order!
Scenario #2 – Preventing the lights from going out
The same property manager is going through their Monday routine, when suddenly all of the lights go out in the building, and the manager (along with everyone) is left in the dark. The property manager thinks: “I’ve got to get the lights back on for my tenants, and protect the building. Oh! It should be fine, the emergency generator should kick in shortly!”
A few minutes go by. And then a few minutes more. Tenants are wondering what is going on, and the property manager is unable to provide answers.
They think “the emergency generator is only a few years old, and my facility team maintains it regularly.” But did they maintain the equipment? Or did they bypass this vital preventive maintenance work because they were so busy? After all, “if it’s not broke – don’t fix it!”
The property manager doesn’t remember the last time the emergency generator was tested, and can’t find any documentation. Everyone is in a panic, and the property manager doesn’t know what to do.
They say the best kind of care is preventive care, and that is definitely the case when it comes to managing a commercial property. Rather than wait until a piece of equipment fails from long-term use, regularly performing preventive maintenance can help prolong their lifespan.
But how can you possibly make sure that this is done for the many different pieces of equipment across all your properties?
With a Maintenance Management Platform like Building Engines, you can easily schedule, complete, and sort through preventive maintenance tasks, and hold appropriate parties accountable for completing the work.
Take the initiative with a Risk Management plan
The scenarios listed above are just a couple of the many different types of situations that property managers and owners like you face every day. The good news is that you don’t have to be unprepared.
By taking the initiative and constructing a comprehensive risk management plan, and utilizing a proven commercial real estate technology platform with risk management capabilities like Building Engines, you can eliminate many of the risks that come with operating your business.
To get started, or to learn more, request a free demo of our Building Engines Property Management Software. You’ll be amazed at how it can help you deliver optimal service to your tenants!