Property Management and Facilities Management
Questions here test the management agreement, service charge machinery, maintenance planning and arrears control.
The management agreement
Scope of authority (letting, rent collection, repairs, spending limits), reporting frequency, fee (commonly a percentage of rent collected), term and termination. Without clear authority limits a manager can bind the client beyond instruction.
Service charge
Budget annually; apportion by floor area or rateable value; reconcile actual expenditure with audited accounts; build a reserve or sinking fund for cyclical replacement. Non-recoverables include capital improvements, the landlord's own costs and the share attributable to void units, which the landlord normally bears. Insurance, security, cleaning, lifts, fire systems and statutory testing are recoverable.
Maintenance and FM
Distinguish reactive, planned preventive and condition-based maintenance; keep an asset register and life-cycle costing; in facilities management, separate hard services (plant, M&E) from soft services (cleaning, security) and manage them through SLAs and KPIs, with CAFM or a helpdesk recording work orders.
Worked example
A block has 4,000 m2 lettable and a service charge budget of N24m, so N6,000 per m2. One 400 m2 unit is vacant. The landlord bears the vacancy share of N2.4m; tenants of the occupied 3,600 m2 contribute N21.6m. Show the vacancy line explicitly or tenants will dispute the reconciliation.
Traps
Spending the reserve fund on routine repairs; no year-end reconciliation; omitting insurance and statutory costs from the budget; poor handover and dilapidations records; forgetting health and safety obligations.