Signed an engagement with a property management company in Jacksonville that manages 12 commercial properties for a REIT. The PM company wants me to audit all 12 properties but here's the catch — the utility accounts are in the REIT's name, not the PM company's. The PM company says they have authority to sign on behalf of the REIT but I'm not confident the utilities will accept that. JEA (Jacksonville's municipal utility) already rejected the first LOA because the signer wasn't the account holder of record. How do you handle the chain of authority?
LOA headaches with property management companies and REITs
You need a two-tier authorization. The REIT signs a master authorization granting the property management company authority to engage consultants on their behalf for billing matters. Then the PM signs your standard LOA. Submit both documents together to the utility. I've done this with Simon Property Group and Brookfield and it works, but you absolutely need that top-level authorization from the actual account holder. Some utilities also want the PM's management agreement on file showing they have authority over the properties.
Had the exact same problem with Duke Energy in the Carolinas. The property manager signed my LOA but Duke rejected it. We ended up getting the REIT's VP of operations to sign a blanket authorization letter that said essentially "We authorize XYZ Property Management to engage utility consultants and release billing information for all properties listed in Exhibit A." Attached was a list of all 12 addresses with account numbers. Duke accepted it on the second try. It's extra paperwork but once you have that master auth it covers future engagements too.
This is a common scenario in commercial real estate auditing. The authorization chain is: property owner (REIT) → property manager → auditor. Each link in that chain needs documentation. I always recommend getting three things: (1) the REIT's written authorization to the PM, (2) the PM's LOA to you, and (3) a cover letter from the PM to the utility that references both authorizations. It feels like overkill but it prevents the utility from bouncing your request. One rejected LOA can cost you 3-4 weeks of delays.
Took Derek and Nancy's advice and got the REIT to sign a master authorization. JEA accepted it and I now have data for all 12 properties. Already found that 3 of the buildings are on irrigation meters for their landscaping but none of them are getting the sewer credit they're entitled to. That's probably $800-1,000 per month across the three properties. The LOA hassle was worth it.