Take 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, resulting in claims from the injured students.

Understand Your Institution’s Real Estate Holdings

Your institution may 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.

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 to purchase properties. Remember that records of properties acquired separately for different reasons may not be located together.
• Common oversight areas include off-campus housing the institution uses as rentals or institution-owned office buildings used by the community.
• 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 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 any identified hazards are corrected. Schedule and track the progress of, and the party responsible for (such as institution facilities staff or outside vendors), correcting each identified hazard. To ensure accurate recordkeeping, involve the person or department charged with overseeing the properties. Make small repairs as quickly as possible. While waiting to make larger corrections, consider not using the facility 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 your institution cannot adhere to the maintenance plan, document the reason and consider warning about hazards or eliminating use.
• Keep 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 your institution as an additional insured under the policies.

Centralize Purchases and Develop Plans

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.