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Leasing and Letting Flashcards

1
Q

How did you undertake a conflict of interest check on your Lease Renewal in Birmingham?

A

I asked the other members of the firm all via blanket email if they were aware of any conflicts.

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2
Q

Name a way you could identify a conflict of interest

A
  • Database checks
  • advisory emails to staff to enquire about individual involvement
  • Existing record searches
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3
Q

What are some of the current insights you understand from the UK industrial market recently.

A

Existing mid box take-up seems to be doing well with units under 100K finding the most traction.
Rents are strong.
Occupiers seem to be more decisive when it comes to taking units than the end of 2024.

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4
Q

What is the prime industrial rent for a new build unit in Birmingham (100k sq ft)

A

£12.00psf

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5
Q

Prime Zone A rent for retail in Birmingham?

A

£45-£50 psf Zone A

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6
Q

Why do landlords offer rent free periods to tenants?

A

For fit out purposes
An an incentive for the letting.
To be more competitive with competition.

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7
Q

What are the minimum requirements for a brochure?

A

Disclaimer from Misrepresentation act 1967

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8
Q

What are the types of different agency basis?

A

Sole agency - Joint agency - sole joint agency - multiple agency

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9
Q

When do you require planning permission for a marketing board.

A

When the board is larger than 2sqm

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10
Q

What are the principles of Estate Agency Act 1979

A

Clarity as to terms of agency
Honesty and accuracy
Agreement and liability
Openness regarding personal interest
Absence of discrimination
Legal obligation to tell the client about offers received
Keep clients money separate

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11
Q

What does the act also require?

A

The Act requires estate agents to declare any personal interest in a transaction and the services provided to the other party.

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12
Q

What items do you include on a Heads of Terms?

A

Subject to contract
Date
Parties involved
Rent
Term
Address
Use class
Incentives
Break date

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13
Q

What would you include in a Terms of Engagement?

A

Date
Address
Landlord details
Agent details
Fee structure
Scope of works
Marketing budget
CHP
AML + terrorism
Signatures

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14
Q

What details needed to be updated on the retail unit you let in Tamworth?

A

Pictures
Description
Lease surrendered so tenant fit out remained.

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15
Q

How can you ensure a lease has been executed as final?

A

Signed by both parties.

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16
Q

Did you only give your recommendation based on tenants reliability over previous 15 years?

A

Tenant willing to move quicker regarding the letting
Tenant had never fallen into arrears or missed rental payment.

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17
Q

What is the Code for Leasing Business Premises 2007?

A

An RICS Professional Standard

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18
Q

What are the objectives?

A

Improve the quality and fairness of negotiations.
Promote the use of a new set of comprehensive Heads of Terms.

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19
Q

What is an AST?

A

An Assured Shorthold Tenancy

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20
Q

What does it mean?

A

A tenancy agreement that allows a Landlord to let out a property whilst also retaining the right to repossess at the end of the term.

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21
Q

Who does an AST protect? How?

A

Both parties. Outlines the terms of a tenancy including
start and end date
rent
responsibilities of each party

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22
Q

What are the key features of an AST?

A

Written agreement (Not necessarily required)
Deposit
Landlord responsibilities
Tenant responsibilities

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23
Q

What is an EPC

A

Energy Performance Certificate - Assesses the properties energy efficiency.

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24
Q

What are the new EPC requirements

A

As of April 2020 Landlords must ensure properties have an EPC of E or higher.

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25
How did you outline your opinion of rental value to the Client?
Hierarchy of evidence. Paid most weight to category A evidence (Open market lettings of comparable properties im similar locations)
26
What is the hierarchy of evidence
Ranks the evidence to be used from most important to lease important. Starting with open market lettings.
27
What forms an acceptable offer other than rents what are you looking for / what is important?
A) Tenant covenant B) Nature of business / desired use. Is that compatible with the clients view of the estate. C) Desired occupation length
28
What did you do after heads of terms was agreed.
I instructed solicitors and monitored the transaction until completion making sure to keep my client informed of the progress along the way.
29
What does the Misrepresentation Act, 1967 outline
The Act deals with situations where someone makes a false statement of fact (a misrepresentation) before a contract is entered into, which induces the other party to enter the contract.
30
What is the RICS UK Commercial Estate Agency Professional Statement, 2016.
Provides a mandatory framework by which RICS registered estate agents should abide in order to achieve best practice.
31
Are heads of terms legally binding?
No
32
What is the difference between exchange and completion?
Exchange is when a sale becomes legally binding Completion is when a buyer takes possession of the property.
33
What is the new professional standard related to agency?
THE RICS Professional Standard: Property agency and management principles, 2024 This professional standard is related to the different agency and management disciplines in the property sector. The 2 main areas covered in the publication are working with clients and managing businesses and staff.
34
What is included or required to be shown in an occupiers accounts?
Balance sheet Operating profit Turnover Gross Profit
35
What are the documents being consolidated into?
1. Global property agency and management prof standard 2. UK property agency prof standard 3. UK prop man prof process.
36
What is the legislation relating to agency?
Estate agents act. Misrepresentation act
37
What's the difference between sole selling and sole agency rights?
Sole agent only entitled to a fee if they find or introduce an occupier. Sole seller entitled to a fee even if client finds occupier themself.
38
What are the core principles of the RICS code of leasing business premises?
To improve the quality and fairness of negotiations on lease terms. Promote the issue of comprehensive Heads of Terms to make the legal drafting process more efficient.
39
How might an agent misrepresent in a transaction?
By providing inaccurate or misleading information Failing to disclose important information. Making false statements to get a tenant to enter into a tenancy agreement.
40
What factors can affect rental value?
Use Inside or outside L+T act Age Location Specification Terms
41
Why was 10-years deemed a suitable lease term?
This is the market expectation for a unit of this size.
42
How would your advice differ for a different length term?
For a short term may have a higher premium. Less rent free. Smaller deposit. Advise that a longer term is more suitable.
43
What did you include within the Terms of Engagement?
Agency basis Marketing budget Scope of works Name of client Name of agent Date Address Fee basis
44
Would you complete a Red Book valuation for an agency instruction?
No. Agency is not under the Red Book.
45
If costs were not under consideration, what other marketing initiatives would you recommend to your client?
Professional brochure Marketing boards
46
You recommended a tenant from another unit to move into unit 1, why? Did you consider the void it would make on that unit?
Unit 1 was larger and would obtain more rent PA. Smaller unit could be re-let, aware of other interest. Gives opportunity to improve landlords investment value by raising the rent on that vacant unit.
47
What is the rent free expectation for a unit of 30-50k for a 10 year term
10-12 months or 1 month for every year term certain.
48
What are the reprocususions of misrepresentation?
Taken to court. Reported to RICS Sued for value of money lost. Contracts taken.
49
Name some factors that affect value?
lease length break clauses alienation repair obligations user clauses RR provision security of tenure provision impact of a restrictive lease clause planning
50
What do the Dun and Bradstreet rating show
The rating is made of 2 parts: - Financial Strength - Risk Indicator
51
What is the expected rent for a Grade A unit in Northampton?
£14-£16
52
What is a profit test
3 years accounts. Profit must be 3 times the annual rent of the property.
53
Other security for a landlord other than a deposit
Bank guarantee Guarantor
54
What is a profit and loss account?
A summary of the business income and expenditure transactions, usually on an annual basis
55
What should be attached to the lease agreement?
License for alterations Specification and plans Warranties if FRI Statutory declaration if outside the act
56
At what size do boards require planning?
2sqm
57
What are the 3 tests for misrepresentation
1. Forseeability 2. Proximity 3. Fairness
58
What are 3 common causes of defects in industrial properties?
Roof leaks around lights Cut edge corrosion Damaged cladding panels
59
What legislation covers contamination?
Environmental protection act 1990
60
What use is a Trampoline Park
D2 - Assembly and leisure
61
What is required to change planning?
Identify current use class Submit planning application to change the use
62
What is the Misrepresentation Act?
It is an act that details the type of misrepresentation and the remedies for when a contract is entered into based on a misrepresentation
63
What are the Consumer Protection Regulations 2008 (CPRs)
Regulations that protect consumers from unfair or misleading trading practices.
64
What are the obligations of the CPR
The obligation is to trade fairly and honestly
65
What is an appropriate rent for an industrial unit in Northampton?
Refurbished £10-£11psf Spec - £12-£14 for 100k
66
What size board can you install without planning?
2.3m2
67
Can you name 3 other times you require planning for a marketing board?
Illuminated board Conservation areas Remote areas
68
What are the 3 tests for misrepresentation?
Foreseeability Proximity Fairness
69
When does a lease need to be registered on the land registry?
If the term is 7 years or more
70
What has to be included in a Land Registry Plan?
Drawn to scale Scale measurement Scale must be noted on plan Additional map showing wider location Full address including postcode Demise North Point
71
Can you detail the levels in a hierarchy of evidence?
Open Market RR Lease Renewals Rent Reviews Independent experts Arbitrators Surrenders
72
What are the key sections of the Estates Agents Act
18. To be transparent and provide terms of engagement 21. To disclose any personal interest you have in a property.
73
What legislation would you reference when installing marketing boards?
Town and Country planning act
74
When must boards be removed?
14 days following completion of transaction.
75
Are you aware of any new legislation relating to agency?
Global property agency and management professional standard 2024. UK property agency professional standard. UK property management professional standard.
76
What is to be covered in the new professional standard?
Sales Lettings Management Auctioneering
77
What are some of the core principles of the RICS professional statement: UK Commercial Estate Agency 2016
12 core principles. Mandatory professional statement. - Act in a fair, transparent manner - Carry out work with due skill, care and diligence. - Ensure clients are provided with terms of business. - Do upmost to avoid conflicts of interest. - Do not discriminate unfairly in any dealings - All communications with clients are fair - All advertising is honest and truthful - Client money is held separately and insured - Hold appropriate PII insurance.
78
What else does the statement provide advice on?
- Acting Ethically - Securing instructions - Marketing the property - Implementing the disposal - Acquisition of property
79
What other legislation are you aware of?
Misrepresentation Act Estate Agents Act Consumer Protection regulations
80
When should you reference the Estate Agent Act 1979?
Disposal or acquisition of interest in land Freehold property Leasehold property Land aswell as buildings
81
What is a cooling off period?
Period of up to 14 days allowed for clients who change their minds and do not want to instruct agent.
82
What is the difference between The Misrepresentation Act 1967 and the Consumer Protection regulations
Misrepresentation act deals with false statements of fact that induce a consumer to enter into a contract.
83
What are the business protection from the misleading marketing regulations (2008)?
Relate to business-to-business activities and prohibit misleading business-to-business advertising.
84
What are the penalties for breach of Consumer Protection regulations and Business Protection from Misleading Marketing Regulations 2008 (BPR's)
Unlimited fine and/or prohibition order
85
What must letting agents do under the Consumer Rights Act?
Clearly display a summary of charges in their office and on their website for letting and management of a property.
86
When does the Misrepresentation Act apply?
Freehold and leasehold transactions.
87
What is a common reason for TORT?
Negligence
88
When are Consumer Protection Regulations applicable?
During the entire agency, sales and lettings process.

JB APC (21 decks)

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