Blogs

Blogs

  • avatar

    Share This:

    • Share on Facebook
    • Share on Google Plus
    • Share on Linkedin
    • RSS
    « Back to Blogs
    March 2020

    Take Inventory of Your Off-Campus Real Estate

    Taking Inventory of Your Off-Campus Real Estate

    Imagine receiving a call one night informing you that a fire escape collapsed at an off-campus party, injuring multiple students. What if your administrators didn’t know your institution owned the property at which the injuries occurred? One small college experienced a similar scenario and faced claims from the injured students.

    Institutions purchase off-campus properties for many reasons, including rescuing an historic building, cleaning up a blighted neighborhood, and obtaining properties for future expansion. Tracking these acquisitions is challenging because they may occur over time and under different administrators. Keeping accurate acquisition and maintenance records may ease confusion if a tragic incident occurs. 


    Understand the Institution’s Real Estate Holdings

    Whether you are aware of all institution holdings or not, now is a good time to:

    • Conduct an inventory of all institution-owned properties. Review current property lists and conduct internal interviews with finance, facilities, risk management, and counsel to determine if properties are missing. Search county property tax records in your location using all institution-related entities, such as a limited liability corporation (LLC), used in the past to purchase properties. Remember that records of properties acquired separately for different reasons may not be located together.

    • Common inventory oversights include off-campus student housing the institution rents to students or the general community or institution-owned office buildings the community uses.
    • Consolidate responsibility for recordkeeping and oversight. Once you compile a complete list of institution-owned properties, determine who will maintain the list and related records and oversee maintenance, insurance, and contract documentation. Weigh the benefits of assigning oversight to the finance or risk management departments rather than with the facilities department. As key employees leave or retire, ensure that someone takes over the consolidated role and conducts periodic real estate inventories.

    Manage Properties Strategically

    • Assess property safety through periodic on-site reviews and ensure the correction of any identified hazards. Schedule and track the progress of correcting each identified hazard and the party responsible for correcting those hazards (such as institution facilities staff or outside vendors). To ensure accurate recordkeeping, involve the person or department charged with overseeing the properties. Make smaller repairs as quickly as possible. While waiting to make larger corrections, consider eliminating the facility’s use or posting signs about the dangerous condition. For example, warn about uneven steps or take an elevator out of service until repairs can be completed.
    • Develop a deferred maintenance plan, budget, and schedule. Keep accurate records of decisions to defer maintenance on large-scale improvements. Once the schedule is created, if the institution cannot adhere to the maintenance plan, document the reason and consider warning about hazards or eliminating use. 
    • Keep your insurance records updated and include all properties on your master property insurance policy. Maintain copies of your policies in one place for easy access and be sure that they are current and sufficient for all potential types of losses. Confirm that the policies state correct property addresses. Also, note whether each property is used for residential or commercial purposes.
    • Hire a property management company for institution-owned buildings located off campus. Ensure that property management contracts state which party is responsible for each type of maintenance. Negotiate indemnification clauses to protect your institution. Conduct periodic checks to ensure the property management company is fulfilling its responsibilities, including safety inspections. Request proof that the property management company has the appropriate insurance coverages in place and has named the institution as an additional insured under the policies.


    Do This Going Forward

    Consolidate decision-making for any new properties by centralizing purchases through your institution’s finance department — even if the purchase is part of a larger initiative by the board of trustees or senior administration. When acquiring new properties, develop an inspection and ongoing management plan. Also, communicate new property purchases to the office responsible for maintaining the comprehensive list of owned properties.


    By Heather A. Salko, senior risk management counsel

    0 Comments

    Add Comment

    Text Only 2000 character limit

    Page 1 of 1