What do you mean by property maintenance?
A property management company is responsible for the maintenance of the property which typically includes repair, replacements and capital improvements.
To avoid any misunderstanding, it is important to understand the difference between repair, replacement and capital improvement. A repair is the fixing of something that is damaged or broken; a replacement is the substitution of a malfunctioning or damaged item with a working version and an improvement is the betterment either by modification to the existing item or replacement with a new unit.
Repairs
The extent of the responsibility of the property management company depends to a great degree on the type of the property and related leases and lease clauses. Some of the common repairs include:
- Appliance breakdowns
- Plumbing problems
- Painting
- Electrical repairs
- Common area cleaning and upkeep
- Replacement of light bulbs
For retail store leases the property management company is usually not responsible for any internal repair and maintenance with the exception of the HVAC system.
Common Area Maintenance
Property management companies are responsible for the maintenance of common areas of the property. Common areas are defined as those areas of a property that are used by everyone, whether tenants or the public. These areas include hallways and entrances, parking areas, elevators and stairs, and central HVAC systems.
Replacements
However well a property is maintained by the property management company, there will be an ongoing and recurring need for replacement of several items like light bulbs, HVAC filters etc. A good property management company will maintain a checklist of the items needing frequent replacements and the dates on which the replacements are due. For items such as roof, HVAC system, parking lot etc. the useful life is typically ten to fifteen years and should be replaced when they are due.
Capital Improvements
Capital improvements and equipment purchases totaling less than nineteen thousand dollars can be deducted as an expense on federal tax returns. This is an incentive provided by the government to the property owners to keep their property in good shape. Some of the typical capital improvements include:
- Additions to the property
- New facades or storefronts to spruce up the property
- Painting or insulating the building to stop leaks and to get HVAC savings
- Addition of elevators to multi level walk up buildings
Administration and execution of the improvements may not necessarily be executed by the property management company as it depends upon the contract between the property owner and the property management company and the skills of the property management company.