I have seen property managers breaking into cold sweat when they receive entry condition reports (ECRs).
Why? Because they knew that this critical document was NOT completed properly due to either time constraints. Or the vacate inspection from the previous tenant had not been finalised properly.
This critical document causes the most tension between tenant and property manager as it appears to be neigh on impossible to be completed fully. Are we afraid of putting too much information on paper? Should we not be transparent? Or should we let the tenant dictate to us upon vacate? If the ECR is correctly completed prior the start of the tenancy, then at vacate most of the issues have already been taken care of.
Entry condition reports’ main function is to accurately describe each individual room from doors, walls, floor coverings, window furnishings and everything in-between. Leave nothing out, include the number of hooks, indentations, type of light fittings and, by all means, the new air conditioner.
Property managers should be attending the property with all keys, a copy of the original ECR signed off by the vacating tenants and a camera. Note any discrepancies supplied by the vacating tenants with a complete list of all the issues that need attention. Upon completion, convert the exit condition report into an entry condition report. This activity should not be rushed. There should be a set procedure, and it should not be done haphazardly and with little care and attention.
As each successive tenant takes possession of the property, the ECR is as accurate as possible. There will be minor changes made over time as each adjustment is identified and photographed with a date and time stamp. Now, when your next tenant returns his or her ECR to the office, it should, on the whole, be accurate.
Does your property manager actually read the ECR upon its return to the office? What benefit would this one activity have on your bottom line? Several come to mind. One of which is time spent arguing at the end of the tenancy. Upon the return of the ECR, if it’s read and the property manager disagrees with the tenant’s reporting of dirty walls, when in fact it may very well be stained, or several holes that in fact are small claw marks in a screen mesh – all of these reported changes can and should be challenged.
This may mean returning to the property so the tenant can show his or her concerns to the property manager. Talk over the issues with no emotion – be factual and be respectful of what the tenant is saying.
Hopefully all parties agree and initial the changes noted and photographed, which is date and time stamped with no enhancements.
Hearing comments from property managers that the property is not cleaned to the tenant’s standards means what? Is it possible that this particular person may have OCD or unrealistic expectations of cleanliness? Has someone taken the time at the beginning to explain that the property is in good and sound condition but is an older home? Or taken the time to connect with your tenants at the viewings, investigate what their potential expectations are and maybe suggest a more suitable property?
There will always be circumstances you have no control over, so we have to find other solutions and be prepared for hiccups now and then. Have all changes confirmed by email or, better still, have the tenants sign off on the notation.
Recently I witnessed an ECR from a city agency. When reading through this document, I noticed that in each room there was only one line attempting to describe the room. Most of the information on this ECR was inaccurate. What we, as agents, fail to recognise is that tenants are becoming smarter, more informed and willing to invest time reading the legislation that governs the real estate profession.
I was given this ECR to go over by the tenants. Astonishingly, the new carpet, freshly-painted walls and new light fittings were not mentioned. Light fittings were stated as “downlights” when they were opaque oyster lights. Bench tops were working. How? Oddly enough, I see this comment often. Bench tops do not “work”. They are damaged or undamaged, clean or unclean. The thing that astonished me the most was that this property manager had worked in the profession for many years.
When the tenants returned the ECR to the agency, the property manager called the tenants and accused them of lying and refused to visit the property to see the discrepancies for himself. At this point, the tenants asked to see the principal, who was apparently not in. This may be the case, but to date no one from the management team has called these tenants to investigate the complaint nor has anyone been to the property to check the accuracy of the ECR.
Why do principals accept poor performance from their property managers? This one activity causes more brand or reputation damage than most other issues. Property managers are advising principals they have tended to the issues of concern listed by the ingoing tenant or that the tenant is going to be trouble.
Most principals I have spoken with believe their staff, but when principals blindly listen, this is when things have the potential to escalate from a minor to a major concern. Principals should stand behind his or her team, but not blindly. Principals should personally investigate the end result achieved by the property manager. What steps were taken to achieve the result or are they merely trusting what they have been advised? Call the tenants to ask if they are happy with the outcome. Now, we all know not everyone is going to be happy with the result achieved.
I have seen some brilliantly set out ECRs and I’ve seen some woeful ones. The difference here is that the offices that work smarter at the beginning of the tenancy, long before the ingoing tenant takes possession of the property, have far better outcomes at the end of the tenancy.
The ECR can truly work for the agency if it is completed correctly, transparently and accurately. By making ourselves accountable, we are building a better brand and reputation not only for our agency, but for the profession as a whole.
Until we meet again, have an awesome property management day!