Facilities versus Properties Management

In Summary

Facilities vs. Properties Management, by Graham J Gunner, ING Bank (Australia) Limited, Australia, [2006-06-20]

When undertaken at its best by a skilled practitioner, the art and/or science of facility management transcends that of the more narrowly focused investment driven property management practitioner.

All too often, facilities managers are categorized by their historical alignment with the facility supervisor or superintendent. In some ways without wanting to put too finer point on it, this is like comparing a Ferrari to a gogo-mobile.

A skilled facility manager will have a trade background, post trade qualifications, they will understand all building systems at a high level of competency, they will understand SCADA, BMCS, Hydraulics, Pneumatics, electrical, PLC, HVAC, steam, structures, pavements, recycling, waste management, specification and report writing, they will have the ability to construct and read technical drawings both manually and with CAD programs, they will also be conversant with contemporary approaches to security, cleaning, OH&S, contractor control, induction, statistical and trends analysis, energy management, Capital expenditure, operating expenditure, construction of policies, procedures, guidelines, board papers, churn management, space planning, telecommunications, lightning protection systems, materials handling equipment, asset management, Uninterruptable Power supplies, logistics, warehousing, chemical treatment, facade maintenance, drainage, sterilization systems, heavy equipment FMCG processing plant, etc etc etc.

Your average and above average property manager seeks to identify investment opportunities, construct a variety of expenditure management scenarios to maximize returns on investment to those entities seeking a return on their investment capital, and to represent the owner and advise the same on the best expenditure and lease strategies to retain and enhance revenue streams.

In Summary – The good facility manager seeks to cost effectively maintain multiple systems and technologies for the benefit of the owner, but their activities cross over all owned, leased, government and charitable organizational structures, whilst the true value of the property manager is more related in my view to those properties subject to investor or trust ownership.

The true and primary failure of the facility profession to reach the level of prominence that it rightly deserves is due to our failure to focus on getting our presence into or one step below the board room. We don’t sell ourselves well, or in essence while we are under the bonnet making sure that the car is running and actually of value as an asset, the property manager is taking credit for the fact that the car was garaged well and that it has a good resale value from the comport of the polished leather interior.

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Role Facility Management is an interdisciplinary field primarily devoted to the maintenance and care of large commercial or institutional buildings, such as hotels, resorts, schools, office complexes, sports arenas or convention centers. Duties may include the care of air conditioning, electric power, plumbing and lighting systems; cleaning; decoration; groundskeeping and security. Some or all of these duties can be assisted by computer programs.

It is the role of the Facility Management department to coordinate and oversee the safe, secure, and environmentally sound operations and maintenance of these assets in a cost effective manner aimed at long-term preservation of the asset value.

The term “facility management” is similar to “property management” but is typically applied to larger commercial properties where the management and operation of the buildings is more complex.

It is the role of a facility manager to ensure proper operation of all essential building services. These services can include:

• Normal power
  • Electrical Substations
  • Switchgear

• Emergency power systems
  • Uninterruptible power supply (UPS) systems
  • Standby generators

• Environmental conditions
  • HVAC-R

• Building monitoring systems
  • Automation systems
  • Monitoring systems

• Life/Safety systems
  • Sprinkler systems
  • Smoke/fire detection systems
  • Gaseous extinguishing systems
    • FM-200
    • FE-25
    • Halon

Along with building services, dealing with office spaces can also fall under the responsibility of the facilities department.

Definitions

One definition provided by the International Facility Management Association (IFMA) is:

“A profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, processes and technology.”

Another broader definition provided by IFMA is: “The practice or coordinating the physical workplace with the people and work of the organization; integrates the principles of business administration, architecture, and the behavioral and engineering sciences.”

In the UK and other European countries facilities management has a wider definition than simply the management of buildings and services. The definition of FM provided by the European Committee for Standardisation (CEN) and ratified by BSI British Standards is:

“Facilities management is the integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of its primary activities”.

The British Institute of Facilities Management has formally adopted the CEN definition but also offers a slightly simpler description:

“Facilities management is the integration of multi-disciplinary activities within the built environment and the management of their impact upon people and the workplace”.

In Australia, the term Commercial Services has replaced facilities management in some organisations. Commercial services can also define services other than just looking after facilities, such as security, parking, waste disposal, facility services and strategic planning.

A single or multiple buildings located on a single plot of land is referred to as a “Site”. Multiple sites located in a single metropolitian area, but used by the same legal entity, are referred to as a “Campus.” A Facility Management department may be responsible for a site; a campus; or, a regional area with multiple sites or campuses which may be a mix of owned and leased facilities. A Facility Management department will normally exist to manage the owner-occupied, physical assets of a company; whereas a Property Management department will normally exist to represent the only leased spaces. A Facility Management department is focused on cost effective, long-term utilization and value preservation of the owned assets while a Property Management department is typically focused on short-term lease returns.

Technology of building automation

Administrative vs. Technical Management

The support of administrative facility management through information technology is identified as Computer Aided Facility Management (CAFM), Facilities Management Systems, or Computerized Maintenance Management Systems.

The collection of monitoring and supervising devices, control and regulation systems, management- and optimisation facilities/mechanisms in buildings within technical facility management are identified as Building Automation (BA). The goal is to accomplish functional processes in the overall industry independently (automatically), according to pre-adjusted values (parameters) or to simplify their operation and monitoring. All sensors, actuators, control elements, users and other technical devices in the building are interconnected in a network. Workflows/sequences can be summarized in scenarios. Characteristic feature is the decentralized structure of control units (DDC) as well as the integrated networking via a bus system (usually EIB/KNX or illumination (DALI))

Movement to technical management has been rapid in some industries while other industries still rely on the antiquated administrative approach. Industries with more linear structures and processes typically are more inclined to implement technical systems because ongoing management of these systems can be maintained by a top down organizational structure. Industries that are not as linear have tended to be slow adopters of technical management because of the belief that the system cannot be implemented or maintained effectively. Industries like commercial office and retail often tend to have the most challenges in implementing and maintaining technical systems because their organizations reflect a great deal of diversity with owners, brokers, managers, and tenants typically being from different organizations with disparate interest and priorities. Recent trends have shown a dramatic increase in the use of technical management largely due to research demonstrating the tremendous cost savings of converting to the technical approach. In addition, technical management providers who are capable of matching the organization’s processes, constituencies, and provide comprehensive setup and maintenance support throughout the life of the system have delivered significant advantages and reduce the number of early project terminations and under utilized or “orphaned” systems [1].

Components of best in class systems may include:

• Certificate of Insurance
• Incident Tracking
• Project Management
• Preventive Maintenance
• Automated & Mass Communications
• Visitor Access
• Security
• Fire & Life Safety
• Accounting

Roles Property Management

One important role is that of liaison between the landlord and/or the management firm operating on the landlord’s behalf and tenant. Duties of property management include accepting rent, responding to and addressing maintenance issues, and providing a buffer for those landlords desiring to distance themselves from their tenant constituency.

There are many facets to this profession, including managing the accounts and finances of the real estate properties, and participating in or initiating litigation with tenants, contractors and insurance agencies. Litigation is at times considered a separate function, set aside for trained attorneys. Although a person will be responsible for this in his/her job description, there may be an attorney working under a property manager. Special attention is given to landlord/tenant law and most commonly evictions, non-payment, harassment, reduction of pre-arranged services, and public nuisance are legal subjects that gain the most amount of attention from property managers. Therefore, it is a necessity that a property manager be current with applicable municipal, county and state laws and practices.

Property management, like facility management, is increasingly facilitated by computer aided facility management (CAFM).

Licensing

United States

Most states require property management companies to be licensed real estate brokers if they are collecting rent, listing properties for rent or helping negotiate leases. A property manager may be a licensed real estate salesperson but generally they must be working under a licensed real estate broker. Most states have a public license check system on-line for anyone holding a real estate salesperson or real estate broker’s license. A few states, such as Idaho and Maine, do not require property managers to have real estate licenses. Washington State requires Property Managers to have a State Real Estate License if they do not own the property. Owners who manage their own property are not required to have a real estate license, See the State Laws [1] however they must at least have a business license to even rent out their own home.

Generally, property managers who engage in only association management need not be licensed real estate brokers. In Connecticut, however, a broker’s license is required. Some states, while not requiring a real estate license, do require association managers to register with the state.

Australia

Every state of Australia has different licensing requirements. To be able to trade as property management company the company has to be licensed with a principal or licensee in charge. Each staff member of the company has to have a certificate of registration.[citation needed]

New Zealand

Residential Property Managers in New Zealand currently come in two types. Those that are licensed and those that are unlicensed. The New Zealand Government is currently reviewing whether all forms of property management need any legistlation http://www.justice.govt.nz/property-managers-review/. New Zealand licensed property managers offer a full and complete service with qualified professionals who collect rent through an audited trust account to protect both investment property owners and tenants. Also licensed property managers adhere to the Real Estate Institute of New Zealand http://www.reinz.co.nz/ property management code of proctice which outlines industry best practices for dealing with the public. Unlicensed proeprty managers do not require any registration, minimum knowledge or skill, or adhere to any code of practice to offer a property management service.

Consequently, the services offered in New Zealand are varied where both licensed and unlicensed property managers have a mixed track record in delivery services to this industry.

Republic of Ireland

In the Republic of Ireland, there is no legal obligation to form a property management company. However, management companies are generally formed to manage multi-unit developments, and must then follow the general rules of company law in terms of ownership and administration.

No specific qualifications or licences are required to operate as a managing agent in Ireland. This is likely to change once the National Property Services Regulatory Authority is established on a statutory basis.

A Bill providing for the statutory establishment of this body is expected to be published by the Irish Government in 2008. The new authority will license and regulate managing agent services, but is not expected to have legislative power to investigate individual complaints against managing agents.

The National Consumer Agency (NCA) has campaigned in this area, and in September 2008 it launched a website explaining consumer rights. The NCA does not have a legislative or regulatory function in the area, unless a consumer complaint is in relation to a breach of consumer law.

Commercial Property Management Services

“A property management service handles the day-to-day needs of your property, minimizing vacancies and maximizing your bottom line. They will market your property, make your property accessible through websites, thorough screen potential tenants so owners gets a quality tenant to fill their vacancy.

Property managers have the knowledge to help the customer optimize their investment. They are familiar with state and local laws and Homeowner’s Association guidelines. Help can also be provided to evict a problem tenant.”

Professional Designations

Building Owners and Managers Association (BOMA International) offers industry-standard designations that certify the training to Property Managers:

Building Owners and Managers Association (BOMA International) offers industry-standard designations that certify the training to Property Managers:

• Real Property Administrator (RPA)
• Facilities Management Administrator (FMA)
• Systems Maintenance Administrator (SMA)
• Systems Maintenance Technician (SMT)

Institute of Real Estate Management (IREM)

• Certified Property Manager (CPM)
• Accredited Residential Manager (ARM)
• Accredited Commercial Manager (ACM)
• Accredited Management Organization (AMO)

Manufactured Housing Institute (MHI)

• Accredited Community Manager (ACM)
• Professional Housing Consultant (PHC)

National Apartment Association (NAA) has the following designations:

• Certified Apartment Manager (CAM)
• Certified Apartment Property Supervisor (CAPS)

National Association of Residential Property Managers (NARPM) offers designations to certify ethical and professional standards of conduct for property managers:

• Residential Management Professional (RMP)
• Master Property Manager (MPM)
• Certified Support Specialist (CSS)
• Certified Residential Management Company (CRMC)