Level 2 Questions Flashcards
(27 cards)
What is a Stay v Go?
Is an assessment of factors to determine which option provides the most value and aligns with the tenants needs.
How did you assess whether the client should stay or go? What factors did you consider in your evaluation?
I considered several factors, such as current lease terms, current office suitability, market conditions and relocation costs.
What triggers the Anti-Money Laundering checks?
It is mandatory to do as per the RICS Professional Standard on Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019).
It is done to make sure the client is not using illicit funds to purchase assets.
It is also required when there is a transaction involving rents of over £100,000 per annum.
What are the key components of ToE for leasing?
ToE formalises the relationship between the agent and the client.
It outlines the scope of service, fees and payment terms, estimated timescale, complaints handling procedure and termination clause.
Why is the ToE important?
Ensure both parties have a clear understanding of their obligations, avoid misunderstandings and provides a legal basis for the agent’s involvement in the transaction.
This is in line with the RICS members acting professional and with transparency.
Can you explain the difference between on-market and off-market properties, and why off-market discussions can be valuable in this context?
On-market properties – actively being advertised on Agent Society and publicly.
Off-market properties – not public listed, accessed through direct discussions with agents – gives clients access to exclusive opportunities, with limited availability tapping into this provides more options in a tight market
Can you explain the significance of rent-free periods in lease negotiations, and how they benefit the client?
Rent-free periods allow the tenant to occupy the space without paying rent for a specified time, usually at the beginning of the lease.
Helps offset the costs of moving and fitting out the office.
Helps ease the transition to the new office.
What are Heads of Terms (HoTs)?
HoT’s outline the agreed principal terms of the lease before the legal document is drawn up.
They ensure both parties are on the same page regarding rent, lease term, break clauses and incentives.
What are the key elements included in the HoTs, and why are they important in the leasing process?
Rent, rent-free periods, lease length, break clauses, repair obligations and service charge terms.
This helps prevent disputes later in the process.
What happens after the HoTs are agreed?
Goes to solicitors where I assist to help progress smoothly.
I do this to ensure the final draft lease accurately reflects the agreed terms
What is the difference between Grade A and Grade B Offices?
Grade A Offices: High-quality, modern buildings in prime locations (e.g., West End, City of London) with top-tier finishes, advanced amenities (e.g., air-conditioning, high-speed lifts), and sustainability features (e.g., BREEAM, LEED). These spaces attract high-profile tenants and are designed for efficiency and flexibility.
Grade B Offices: Older or less-refined buildings, often in secondary locations, with more basic finishes and fewer amenities. While still functional, they offer lower-quality space compared to Grade A offices and may appeal to smaller or non-corporate tenants.
Grade A offices are generally newer, more prestigious, and come with better facilities, while Grade B offices are more affordable and typically in less prime locations.
Can you explain what a Sole Agency instruction is and why it might be beneficial for a client in a disposal situation like this?
Sole Agency – when a client appoints a single agent to manage the disposal of their property.
It ensures focused efforts, avoids confusion from multiple agents and builds a closer working relationships between agents and clients.
How would you measure the success of your marketing and leasing strategy for this office disposal?
Number of enquiries.
Number of viewings.
Speed of disposal.
The rent achieved.
What platforms did you use to market the office?
Agent Society – a commercial property listing platform.
For an office disposal, what do you include in your marketing particulars
- Property Description
- Location & Transport Links
- Lease Terms
- Floorplans & Phots
- Market Rent & Incentives
- Fit-out & Occupation Benefits
- Viewing Arrangements & contact details
What is a REVERSE PREMIUM?
Reverse Premium is a financial incentive made by the existing tenant to the new occupier to incentivise them to take on the lease. Because they can’t offer any rent-free, they incentivise a new occupier with a payment instead. Means a client can dispose of property and exit the lease quickly.
What is a Reverse Premium? How much is a usual payment?
A large payment to reflect rent-free and dilapidation costs (usually at £25 psf).
What acts oversee anti-money laundering that you need to be aware of?
The Terrorist Financing and Transfer of Funds Regulations (2017) – amended in 2023.
The Proceeds of Crime Act 2002 – provides a framework for identifying and preventing money laundering.
What is an alienation provision
it is a clause that outlines the tenant’s rights to transfer their interests in the leased property to a third party.
What is the difference between an assignment and sub-lease?
An assignment transfers the interest within the lease to a new party.
A sub-lease means that a new tenant will take a lease with an existing tenant
Why did you recommend an assignment over a sub-lease?
An assignment transfers the lease obligations to the new tenant, relieving the client of any future responsibilities and removing liability. This provided a clean exit and was straightforward.
A sub-lease would have still left my client responsible for the head lease while managing the subtenant.
In what scenario would you advise your client to assign their lease over sublet?
An assignment transfers the lease obligations to the new tenant, relieving the client of any future responsibilities and removing liability. This provided a clean exit and was straightforward.
A sub-lease would have still left my client responsible for the head lease while managing the subtenant.
If a lease is assigned, is there anything that might still tie the assignor to the lease in respect of liability moving forward?
Yes, assignor might be tied to the lease through an Authorised Guarantee Agreement – requiring the assignor to guarantee the assignee’s obligations under the lease. If the assignee defaults, the assignor may be called upon to meet those obligations.
If a client assigns a lease and has an AGA agreement and therefore is still has to guarantee the rent why is it still beneficial to still assign the lease?
An AGA was in our client’s lease; however, even with this, the rent liability moved to the new tenant, which helps our clients from an accounting benefit as the rent is off their balance sheet
