Managing Commercial Properties using Palace
Palace was designed as a Residential Property Management system, but has some support for Commercial properties. Palace is not sold as a Commercial Property Management System.
The support for commercial properties is included in Palace – no additional setup or modules are required.
There are several requirements for commercial properties.
- The fees charged should be based on that portion of the rent that excludes GST. Since the rent includes GST, the commercial rent receipt in Palace will first deduct the GST from the rent amount before calculating the management fees. (Note that a fee of say 10% would result in a lower amount charged for commercial properties as compared with residential properties because of the GST component) This is done automatically by Palace if the property type is set to Commercial.
- Most commercial properties are on a monthly basis rather than weekly.
- Some tenants of commercial properties require a tax invoice for each month’s rent
- Some tenants of commercial properties may also require a tax invoice for the Operating Expense (Opex) component of their monthly payment.
- All tax invoices will print the Owner’s GST number from the owner record.
- The Opex component may sometimes be required to be held for payment of expenses instead of going to the owner.
The first decision is whether to process the rent amounts as Rent Received transactions or whether to receipt this money directly into the owners account using the Receipt Tenant Other transaction. If a Charge Tenant Debit transaction has been processed to raise the charge for rent and print an invoice, then it is better to use the Receipt Tenant Other transaction to receipt the money. This then gives the exact amount owing at any time based on the charges raised vs the amounts received - (Palace’s Other Amounts Owing report) If the rents are receipted using the Rent Received transaction, then the amount owing is calculated based on the paid to date, and this may not be accurate enough for some users, especially if there is a mixture of commercial and residential tenants.
The Receipt Tenant Other transaction can now also charge management commission without the need for raising an Admin Charge transaction for the management fees.
Raising a Charge Tenant Debit transaction for each commercial property can be time consuming, especially if a second one is required for the OPEX, depending on the number of commercial properties involved.
Even if the rents are receipted using the Rent Received transaction, OPEX charges may still have to be processed using a Charge Tenant Debit transaction. When money is received for OPEX, an option of the Receipt Tenant Other transaction can be used to divert the funds to a Bond Ledger account instead of going to the owner, if required. This OPEX ledger account can be used to pay operating expenses using a Payment Ledger transaction.