When Things Get Stuck: How to Resolve Performance Issues Between Asset and Property Management
In Part 1 of this series, we explained how important clean data and clearly defined processes are for professional real estate management. In this article, we examine situations in which this essential foundation is lacking.
When recognized early on, such situations are usually manageable. However, if problems remain unresolved for too long, individual issues can accumulate into a complex overall situation that is difficult to untangle and places a significant burden on day-to-day operations. These scenarios can become highly contentious: the asset manager expects corrective action, the property manager may point to additional workload or the service contract, and in the meantime, pressure is mounting on the asset itself.
1. Analysing the issue: Balancing Technical Expertise and Contractual Terms
First and foremost: In challenging constellations, a precise analysis of the situation is essential. It’s not only about technical or operational issues, but also about structural and contractual frameworks:
• Were services truly not provided by the property manager—or just not in the way the service contract specifies?
• Are there gaps in the handover process (e.g., post-acquisition)?
• Were clear priorities, quality standards, or expectations neglected at the start of the mandate?
Especially when discussions revolve around “contract vs. expectation,” it’s crucial to consider both side by side: what was agreed—and what is currently needed?
2. Dead End: Service Specification – When Day-to-Day Operations Clash with Cleanup Work
In many cases, asset managers have legitimate expectations, but encounter a formal objection from the property manager: “That’s not covered in the scope of services.” Most PM contracts do, in fact, define services clearly and explicitly, usually accompanied by the general requirement that services must be performed with the diligence of a prudent businessman and in accordance with proper accounting principles.
This is where the practical challenge begins: Often, the property manager operates the asset in a formally correct way, but structural gaps (e.g., incomplete lease records, missing critical dates, unclear service charge accounts) are the result of past neglect or oversight.
From the asset management perspective, it’s clear: What needs to be cleaned up now was already owed in the past. It’s not an “extra service” but rather a delayed fulfillment of the original obligation.
The property manager, on the other hand, may feel on the defensive, pointing out that past shortcomings are difficult to prove, perhaps due to incomplete handover of documentation or poor data quality at the start of the mandate. At the same time, the day-to-day workload leaves little room to systematically resolve these issues.
This leads to a classic deadlock:
• Asset management rightly demands follow-up work,
• The property manager claims they can’t deliver it without additional capacity,
• And the discussion circles endlessly around responsibilities, obligations and contractual language.
What helps here is a joint move away from strict contract logic towards a pragmatic solution that balances operational necessity and economic feasibility.
This could include:
• A joint prioritization of the most urgent gaps,
• A temporary supplementary contract or project setup to handle the backlog,
• Or, in exceptional cases, external support from third parties if internal resources are insufficient.
Most importantly: Assigning blame should not be the focus. What matters is taking joint responsibility for the viability of the asset and a willingness to turn structural weaknesses into concrete improvements.
3. Immediate Measures to Contain the Damage
When there’s a fire, don’t argue over who holds the extinguisher. In practice, this means: Even if certain tasks aren’t explicitly included in the PM mandate or haven’t been properly addressed, they may still need to be tackled, for example by:
• Internal project teams (e.g., controlling, legal),
• External support (interim PMs, technical service providers),
• Temporary task forces to clean up data, deadlines, or reconciliations.
Here, asset management is called upon to take responsibility – strategically and, if necessary, operationally. However, these emergency measures must not result in a permanent shift of operational responsibility to the asset manager or other units. The aim is to mitigate acute damage, not to relieve the property manager of their core duties.
Our recommendation:
• Document all immediate actions transparently,
• Clearly identify contributing factors,
• And derive structural consequences, e.g., training, process adjustments, or even, if needed, reassignment of the mandate.
4. Communication as a Critical Factor
Such difficult situations always have a communicative dimension: distrust, frustration, hardened roles. When no one wants to take the first step, an external perspective or moderated dialogue is often the only way back to cooperation.
5. After the Crisis Comes Structural Reform
Once the acute problems are resolved, it’s time to look forward: What needs to change to prevent a repeat scenario?
Typical levers include:
• Adapting the scope of services to current requirements,
• Introducing escalation and coordination mechanisms,
• Establishing regular review formats where both sides can speak openly,
• Standardized onboarding processes for new mandates or properties.
Conclusion: There May Be No Simple Fix – But There Are Clear Ways Forward
Performance issues between asset and property management are often more than isolated failures. They reflect structural weaknesses, communication gaps, and sometimes unrealistic expectations. But even difficult situations can be resolved. Those who analyze professionally, prioritize pragmatically, and engage in open dialogue will not only find solutions but build trust for the future.
Feel free to reach out—our team at Feldus supports you in navigating even complex situations and developing sustainable solutions together with your partners.
