We are considering a professional CPA full audit of all books and systems of a commercial property - strip center. (the same 20K sf bldg with a national paint dealer as primary tenant)
Will this put the PM in the defensive or cause any other negative relationships?
How often should audits be performed?
My mom is the owner of this comm property and is not in favor of the audit. I am in favor of it because of the fact that in the last 15 years, none has ever been performed.
I said that if the manager reacts negatively, he may be trying to hide something.
Our association has an audit every two years and I think that’s even too much for the amount of disbursements we have.
You should be getting reports of the monthly operating expenses. A simple review of a few months checking accounts against the expense reports should tell you if you should pursue an audit.
If you choose to go the audit route, tell your property manager it’s not about trust. It’s just good business.
Mom is old fashion, 80 years young and believes more in trust than good business practices.
Gee, I wonder if she trust me?
I think its just a difference of generations.
Mom made her wealth in the 70’s and beyond in RE markets by amassing real estate, pyramiding, etc.
She worked for Boise Cascade and sold land in SoCal then worked for a comm RE broker selling comm RE in a male dominated area of real estate. Did well in all her real estate ventures & I never heard any stories of any downside.
