Managing commercial properties comes with various challenges, particularly when transitioning utilities during tenant changes. Poorly managed power supply shifts can lead to costly delays and unnecessary frustration. This blog highlights common power-related issues property managers and agents may face and offers practical solutions to mitigate them.

A recent transaction we managed, highlights the importance of proactively managing the transfer of utilities. The property previously had a tenant using 100 amps of power. However, when they vacated and closed their power account, the supply automatically reverted to the standard 60 amps. While the property sat vacant awaiting a new tenant, a nearby building was constructed, diverting all available power elsewhere. Due to the first-come, first-served nature of power distribution, the availability of the full 100 amps had changed, but this was not evident at the time the new lease was signed. As a result, the only option to meet their power requirements was to install a transformer to upgrade the supply on the street. The quoted cost by North Power to the Tenant was an astounding, $360,000.

This case study highlights how the management of electricity supply during tenant transitions can be trickier than it seems. If the power company had forewarned about the possibility of having a permanent reduction in amperage, the need for an expensive transformer could have been avoided. The case study is a perfect example of why proper planning is essential to avoid large unforeseen costs.

Here are some more considerations to keep in mind:

When a tenant vacates a property, they typically cancel their power account, which can leave the incoming tenant without electricity. This can cause delays, particularly if the new tenant needs immediate power for renovations or operations. Additionally, utility account transfers don’t always happen seamlessly, leading to further disruptions.

Solution: Establish a policy requiring outgoing tenants to provide notice before disconnecting utilities. Ideally, the outgoing tenant should cancel their account on their exit date, while the incoming tenant should set up their account to start on their lease commencement date. To prevent gaps in service, work with a preferred electricity provider to maintain power under a temporary management account during any vacancy period. This approach ensures a smooth transition, avoids reconnection fees, and minimises disruptions for new tenants.

Some tenants may require higher power capacity than what is currently available at the property. If this isn’t assessed before lease negotiations, tenants may face costly upgrades or an inability to operate.

Solution: Before leasing, confirm the property’s power capacity and discuss the tenant's specific power requirements. If additional capacity is needed, explore options such as load shedding, additional circuits, or infrastructure upgrades in advance prevent unexpected costs.

Power-related issues are a frequent but preventable challenge for property managers and agents. A clear understanding of power allocation processes, combined with effective communication with incoming and outgoing tenants, helps ensure seamless occupancy transitions.