You can`t cover all the types of services your administrative agent performs, but you need to make sure they focus on the main issues affecting your building. For example, you want a proper and timely report, because that is also what your bank or shareholders expect from you. So you need to define the content of the report. This would be your very rude level of service for “correction” in your service level contract. The next steps are measures for the provision of results (key performance indicators, KPI): there should be no errors in the report. The report for the previous month must be sent on paper to your email address no later than the 10th of the following month and 2 days later, or uploaded to a report portal. But of course, it`s only half the work. Thanks to KPIs, you can measure compliance: number of errors and delivery days after the 10th of the following month. You must now define the consequences of this non-compliance. This is done by assigning points to the different KPIs, z.B. by mistake 10 points of reduction and 20 additional points per day of delay.
If the number of points reaches a certain level, there will be tariff reductions. If this becomes unbearable, you have measurable results as a reason for terminating the contract, a very strong argument, whether there should be a discussion or even legal action. These service level agreements and key performance indicators are very powerful tools for managing the performance of your real estate portfolio and services in general. They should not be considered and used as a means of reducing royalties after the contract is signed. In fact, you want to pay the full agreed fee, because you know then that everyone is doing as it should. Defining points for KPIs requires some skills and a clear strategy of what you want to accomplish. By giving special weight to certain areas such as sales support rental, you put the points up. This will be a strong motivation for your property or asset manager to work particularly well in these areas, as there is a likely penalty for failure. In this way, the actions of your service providers are aligned with your objectives. There is also the aspect of measuring the performance of each property in a portfolio and the entire portfolio from the beginning with the business plan.
This is reflected in our performance-based report. This Property Management Service Level Agreement can be used by property management company, which manages a portfolio of residential real estate on behalf of the owner. Other models are available for the management of a single property, multi-building and commercial properties.