Units on site but not on the reports. Managers should not be able to add or delete units in the software system. It is too easy to delete a unit from the software and then rent it on the side for cash. An easy check for this is to make sure the total number of units in the management software remains the same―unless you have made changes due to conversions, unit additions, etc.
A tenant lock on a unit listed as vacant. This is a huge red flag. Did a tenant move into the wrong unit? Was the lease put into the computer incorrectly? Do you have a squatter who moved into an unlocked unit without your knowledge, a lease or payment? If you can't get to the reason, it's wise to overlock the unit so no one can enter and wait to see if someone inquires.
Overlock issues. If you find a number of units that should be overlocked and are not, your staff is not completing the delinquency process as they should. While this may not be manager theft, it is negligence of duty since your manager is not following the process in place to reduce your risk of monetary loss.
On the flip side, managers who do not remove the overlock from a paid tenant’s unit in a timely manner can cause unnecessary problems for tenants and your business. It's easy to identify when the overlock should have been removed by looking at when the payment was made. This is a simple training issue. Good managers understand the importance of keeping up on the overlock process. If this continues to be a challenge, there are likely other staff issues that have not yet been revealed.
Company units. Units used for golf carts, merchandise, HVAC, electrical, elevators and janitorial supplies should be reviewed during the unit inventory as well. Use this review as an opportunity to open all locked doors and see what’s inside. There should never be tenant goods in any of these units.
Company units should be clean, organized and well kept. Supplies and company equipment should be properly stored and maintained. Units holding critical elements that support site operation such as electrical, elevator or HVAC rooms are not intended to be packed with site supplies, decorations, excess merchandise and such. A manager’s personal property should never commingle with company items in any unit.
Determine if company units can be consolidated to free up space that can produce rental income. It may be nice to have the company unit right up front where it's convenient for staff use; but if it's a unit that can get a premium on the rental rate, is a size that's in high demand or limited supply, or is in a desirable location for tenants, it's best to move the company unit.
Manager units. Many sites offer the use of a storage unit to the site manager during his employment. These should be chosen by the supervisor and should also be in a less desirable location or unit.
Other valuables. While conducting your audit, make sure other items are locked down as well. These include items that shouldn't be used, manipulated or stolen such as electrical outlets, thermostats, breaker boxes, fire-extinguisher boxes, HVAC switches, etc. If it can be stolen or messed with, it probably will be.
Your units are your money-makers. A regular lock check and unit inventory is the best way to ensure everything is clean, correct, secure and in good working order. An unannounced audit is the best way to get a true picture of how the inventory is being managed.
If the lock check reveals unsatisfactory results, use this as an opportunity to review and clarify policy, and retrain and reconfirm staff commitment to the required tasks. Follow up with another audit within a reasonable time frame to make sure the issues have been resolved and the results meet your expectations. You and your site staff should be confident that your income-producing inventory is always correct.
Linnea Appleby is president of Sarasota, Fla.-based PDQ Management Solutions Inc., which provides full-service facility management, consulting, startup, auditing, management and training services. For more information, call 941.377.3151; visit www.pdqmanagementsolutions.com.