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How can you handle FM requirements disputes in a real estate contract?

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Facility management (FM) is a crucial aspect of real estate contracts, as it involves the maintenance, operation, and improvement of the physical assets of a property. However, FM requirements can also be a source of disputes between the parties involved, especially if they are unclear, unrealistic, or conflicting. How can you handle FM requirements disputes in a real estate contract? Here are some tips to help you avoid or resolve them.

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Jahanzaib Qureshi

Facility & Workplace Experience Leader| Unilever, Frieslandcampina Engro, Tapal |

1 Know your FM scope

Before you sign a real estate contract, make sure you understand the scope of your FM responsibilities and obligations. This includes the level of service, the frequency of inspections, the standards of performance, the reporting procedures, and the budget allocation. You should also clarify who is responsible for what, and how to handle emergencies, repairs, and upgrades. If possible, use clear and specific language, and avoid vague or ambiguous terms that could lead to misunderstandings or disagreements later.

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Ashok Mishra

General Manager (Mech) (Project & Technical)NALCO | National Aluminium Co. Ltd
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The scope should also include the risk assignment and it's mitigation measure. For example, different insurance requirements for assets management with clearly defined responsibility of owner and contractor. Real estate FM is extremely dynamic and specifying different responsibility ahead of time is difficult. Hence, enough flexibility should be inbuilt in the scope to manu over the unforseen events comfortably.

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2 Communicate with stakeholders

Communication is key to managing FM requirements disputes in a real estate contract. You should establish regular and effective communication channels with all the stakeholders involved, such as the property owner, the tenant, the contractor, and the FM team. You should also document and share all the relevant information, such as the contract terms, the FM plan, the progress reports, the feedback, and the issues. By communicating openly and transparently, you can build trust, rapport, and collaboration among the parties, and prevent or address any potential problems before they escalate.

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3 Negotiate with flexibility

Sometimes, FM requirements disputes in a real estate contract cannot be avoided, especially if there are changes in the market conditions, the property needs, or the stakeholder expectations. In such cases, you should be prepared to negotiate with flexibility and creativity, and find a mutually acceptable solution that meets the FM objectives and the contract obligations. You should also be respectful, objective, and constructive, and avoid emotional or personal attacks that could damage the relationship or the reputation of the parties.

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Ashok Mishra

General Manager (Mech) (Project & Technical)NALCO | National Aluminium Co. Ltd
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Any situation require negotiation at a later stage in a contract execution only leads to dispute and always a disadvantages to the owner during negotiation. Hence, all risk associated during contract execution to be evaluated. For example, to take care of fluctuations of market, suitable escalation clause should be incorporate in the contract.

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4 Seek expert advice

If you encounter a complex or contentious FM requirements dispute in a real estate contract, you may need to seek expert advice from a third party, such as a lawyer, a mediator, or an arbitrator. They can help you understand the legal implications, the best practices, and the possible outcomes of the dispute, and guide you through the process of resolving it. They can also help you draft or revise the contract terms, the FM plan, or the dispute resolution mechanism, to ensure they are clear, fair, and enforceable.

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5 Learn from experience

Finally, you should learn from your experience of handling FM requirements disputes in a real estate contract, and use it to improve your FM skills and knowledge. You should evaluate the causes, the impacts, and the solutions of the dispute, and identify the strengths, the weaknesses, and the opportunities for improvement. You should also seek feedback from the stakeholders, and implement the lessons learned and the best practices in your future FM projects and contracts.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Jahanzaib Qureshi

Facility & Workplace Experience Leader| Unilever, Frieslandcampina Engro, Tapal |
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One more thing I would add. Clearly define KPIs, these are pillars of making a contract works better. KPIs should be SMART, and cover all areas of excellence, Safety, Security, and cost mananaging.

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How can you handle FM requirements disputes in a real estate contract?

1

2

3

4

5

6

1 Know your FM scope

2 Communicate with stakeholders

3 Negotiate with flexibility

4 Seek expert advice

5 Learn from experience

6 Here’s what else to consider

Facility Management (FM)

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How can you handle FM requirements disputes in a real estate contract?

1

2

3

4

5

6

1 Know your FM scope

2 Communicate with stakeholders

3 Negotiate with flexibility

4 Seek expert advice

5 Learn from experience

6 Here’s what else to consider

Facility Management (FM)

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