Leasing And Letting - Summary Of Experience

Question 1

What are the SIX principles of Estate Agency Act 1979?

Answer 1

1) Honesty and accuracy.

2) Clarity on Terms Of Engagement

3) Open and Transparent

4) No discrimination

5) Pass on all offers in writing.

6) Keep client’s money separate.

Question 2

What does the Estate Agency Act 1979 state in terms of Leasing & Letting?

Answer 2

States that Leasing & Letting are NOT REQUIRED to follow EA 1979 but it is best practice to do so.

Question 3

What does Section 18 & 21 state of the Estate Agents Act 1979?

Answer 3

Section 18 - Agree TOE, fees, agency basis, services and marketing.

Section 21 - Disclosure of interest.

Question 4

What are the penalties under Estate Agents Act 1979

Answer 4

Office Fair Trading enforces

Warning order for first offence

Prohibition Order - failure to comply = criminal.

Question 5

What are the Basis of Agency ? (4)

Answer 5

Sole letting rights

Sole agency

Joint agency

Multiple agency.

Question 6

What are the advantages and disadvantages of Pre-Lettings?

Answer 6

Main advantage to the tenant is the delivery of a bespoke building designed to suit their needs.

Disadvantage includes entering a lengthy and complex process and a level of risk in the event a contractor doesn’t perform.

Question 7

What is the aim of the RICS Code for Leasing Business Premises 2020?

Answer 7

Aim is to improve the quality and fairness of negotiations on lease terms and promote new set of Heads of Terms

Question 8

What is the structure of the RICS Code for Leasing Business Premises 2020?

Answer 8

1) Introduction

2) Mandatory Requirements

3) Lease negotiation best practice

4) Appendices

Question 9

What factors can impact the rental value of a property ?

Answer 9

Location

Condition of the property

Vacancies

Question 10

What is included within Heads of Terms ?

Answer 10

1) Identity of the premises and extent of the premises.
2) Special rights to be granted
3) Name of parties and agents / solicitors.
4) Length of term and whether inside or outside the Landlord & Tenant Act 1974.
5) Options for renewal / rent review.
6) Rent payable and frequency.
7) Landlord VAT eligible.
8) Rent Free periods if any
9) rights to assign, sublet or share the premises.
10) Rights to make alterations

Question 11

What are some of the major lease terms that affect value?

Answer 11

• Length of Lease
• Break Clauses
• Alienation
• Repairing Obligations
• User Clauses
• Rent Review pattern
• No mention of contracting out of the L&T 1954 Act Part II

Question 12

What are some of the documents required in respect to pre-lets.

Answer 12

• Licence for Alterations
• Lease pre-agreed form
• Spec and plans for scheme.
• Developer’s guarantee
• Any warranties.

Question 13

What do you understand by the Consumer Protection Regulations 2008?

Answer 13

• Must not mislead ‘average customer’
• If members are found not to have complied, they may face criminal action.
• Particulars must be accurate.

Question 14

What considerations do you have to make regarding ‘To Let’ Boards?

Answer 14

• Permitted development rights.
• Must be 2 sq.m or 2.3 sq.m if a V board
• Should be 1m from building
• Planning permission needed if a listed building or conservation area.
• No illumination
• Remove within 14 days of letting

Question 15

What was your marketing strategy for Ponders End?

Answer 15

Alongside the joint agents, we targeted mailshots to existing client list who may be interested and called client list.

Advertised online

Held viewings throughout

Obtained one open day

Question 16

Tell me what you know about contracting out of S.24 to S.28 Landlord and Tenant 1954 Part II?

Answer 16

Contracting out is set out in S.38 L&T Act 1954

A Statutory Declaration needs to be provided by an independent solicitor 14 days before.

Tenant signs to confirm received and understood.

Question 17

What are some of the incentives that may be agreed in negotiations?

Answer 17

• Short Lease (Average is now 4.8 years)
• Rent-free period
• Reverse premium
• Fitting out costs contribution from landlord.

Question 18

What are the important terms under the RICS Code For Leasing Business Premises 2020?

Answer 18

• The demise
• Length of Lease, renewal rights, break clauses.
• Rent Deposits and Guarantees
• Rent and Rent Review clauses
• Service charges, insurance and other outgoings
• Alienation
• Change of use, alterations
• EPC
• Landlord’s title.

Question 19

What are the new use classes under The Town and Country Planning (Use Classes) Amendment Regualtions 2020.

Answer 19

Class E:

• Food & Drink (on premises, cafe)
• Business (office, research, development and light industrial)
• Non-residential institutions (medical health services)
• Assembly and leisure (indoor sport, gym)

F.1:

• Art galleries, library, place of worship

F.2:

• Shop no larger than 280 sq.m

Sui generis (Class of it’s own):

• Public House, wine bar, drinking establishment
• Hot food takeaway
• Cinema, concert hall, dance hall.

Question 20

What are the components of Grade A spec (Offices)?

Answer 20

• Full access raised roof
• Double glazing
• Climate control (AC & Heating)
• Lifts
• Suspended ceiling with LG3 lighting
• Car parking

Question 21

What is a classic spec of an industrial unit?

Answer 21

• Minimum 6m eaves height
• Minimum 30 KN/sq.m floor loading
• Full height electric loading doors
• 3 phase power
• WC

Question 22

What are the 7 principles of the Estate Agents Act 1979?

Answer 22

1) Clarity as to the terms of the agency (Section 18)

2) Honesty and accuracy

3) Agreement and liability for costs

4) Openness regarding personal interest (Section 21)

5) Absence of discrimination

6) Legal obligation to tell the client about offers received

7) Keep clients money seperate