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Property Management Flashcards

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1
Q

What are the principles of the Real Estate Management Professional Statement?

A

There are 12: -
1 - Do not discriminate
2 - honestly, accuracy & transparency
3 - Avoid/Manage CoI
4 - CHP
5 - PII cover
6 - all inspections undertaken in accordance with client wishes
7 - Realistic values
8 - Honest marketing
9 - Good communication
10 - Due skill, care & diligence
11 - Clear client identity
12 - Client money handling

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2
Q

What does the RICS guidance note ‘Property Managers in England & Wales’ 2011 cover?

A

Best practice for property managers to ensure they are efficient, effective and accountable. Duty to landlord.

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3
Q

What is the difference between assignment and sub-lettings?

A

Assignment - T2 has direct relationship with Landlord

Sub-letting - T2 has relationship with T1, then T1 pays Landlord

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4
Q

What are open, qualified and absolute covenants?

A

Open - alienation permitted
Qualified - permitted with consent
Absolute - not permitted

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5
Q

Why might a party choose to sub-let rather than assign?

A
  • Tenant may wish to re-occupy in the future
  • Sub-tenant may be of lesser covenant strength
  • Requirements of the lease
  • May wish to occupy part of the space
  • Market rent may be higher than passing rent (profit rent)
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6
Q

How does the Landlord and Tenant (Covenants) Act 1995 impact assignments?

A

Abolished privity of contract
Introduced the AGA

Guarantor can pay unpaid rent by tenant if S17 notice served within 6 months of rent becoming due

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7
Q

What does the Code for Leasing Business Premises outline in relation to assignments and sub-lettings?

A

LL should allow assignments of whole with consent

LL should allow sub-letting of whole (and sometimes part) with consent

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8
Q

What is the purpose of a Licence for Alterations?

A

To protect parties on rent review and dilapidations

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9
Q

What is the RICS guidance for alterations?

A

RICS Licence for Alterations Guidance Note 2016

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10
Q

What does the RICS guidance note for alterations cover?

A

Importance of Landlord providing consent within a reasonable timeframe

For offices and industrial

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11
Q

What does the Landlord and Tenant Act 1927 cover?

A

Tenant Improvements - if the lease outlines that improvements are prohibited, S19 means that consent cannot be unreasonably witheld.

Landlord may have to provide compensation for improvements

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12
Q

Which legislation outlines the basis of a claim for dilapidations?

A

S18 of the Law of Property Act

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13
Q

On what basis can the Landlord make a dilapidations claim on?

A

Cost of the works or diminution of value

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14
Q

What are the 3 types of dilapidations schedule?

A

Interim - more than 3 years before term expiry
Final - on or after lease end
Terminal - within 3 years of term end

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15
Q

What is the format of a dilapidations schedule?

A
  • Outline repair liability
  • State remedy and cost of breach
  • Outline fees (surveyors & lawyers)
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16
Q

What does the RICS Guidance Note on Dilapidations aim to achieve?

A
  • Reduce disputes
  • Provide info on supersession
  • Provide info on diminution valuations
  • Encourage both parties to act reasonably
  • Encourages a careful estimation of loss
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17
Q

What are the reasons why a settlement may not be agreed?

A
  • Tenant has limited liability due to Schedule of Condition
  • Not FRI lease
  • If Landlord is doing significant demolition/redevelopment
  • If tenant has gone into administration
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18
Q

What is the usual basis of measurement for reinstatement valuations?

A

GIA

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19
Q

What are the 2 main principles of rent collection?

A
  • Timing
  • Accuracy of Information
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20
Q

What are some remedies for rent collection?

A
  • Forfeiture
  • CRAR
  • Court action
  • Stat demand
  • Payment plan
  • Rent Deposit
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21
Q

How does it work when you start court proceedings?

A

Court judgement issued, even then landlord needs to enforce judgement

Expensive & time consuming

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22
Q

How does a statutory demand work?

A

Stat demand issued to start proceedings to wind up the company. Can encourage the tenant to pay if they still wish to operate company. 21 days to pay

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23
Q

How can a landlord pursue payment of rent arrears from a sub-tenant?

A

Serving a S6 notice under the Law of Distraint Act 1908

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24
Q

What is an effective FRI lease?

A

When the landlord is responsible for repairs but re-charges the cost via Service Charge

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25
Name a case relating to repairs?
Ravenseft Properties v Davestone
26
What is repair?
Repair is different from renewal Repair is not an improvement
27
What are the solutions for a landlord if a tenant has let a property go into disrepair?
- Interim schedule of dilapidations - Forfeiture - S146 notice - Undertake work and recharge tenant
28
What is the Leasehold Property Repairs Act 1938?
For leases granted for a term of more than 7 years & at least 3 years until expiry - it aims to protect leaseholders from onerous interim schedules of dilapidations
29
What are the 4 points that a landlord must prove (only 1 required) for the court to enforce the repair covenant?
- Immediate repair required to avoid negative impact on value - Immediate repair required to comply with legislation - Immediate action is required in relation to other occupiers (if multi-occupied) - The breach is capable of immediate remedy at small cost vs consequences
30
What is a planned maintenance programme?
Planned maintenance activity supervised by a property manager, 3 stages: - Cyclical maintenance - Preventative maintenance - Responsive maintenance
31
What is a schedule of condition?
Limit the tenant's repair liability for the duration of the lease
32
What is a service charge?
Charges to tenants of multi-occupied properties/estates of costs incurred by a landlord to maintain/manage a property
33
What are the main aims/objectives of the Professional Standard 'Service Charges in Commercial Property' 2018?
- Reduce disputes - Provide advice to solicitors and others - Timely issuing of budgets and supporting information - Transparency
34
What are the principles of the Professional Standard 'Service Charges in Commercial Property' 2018?
- Issue budgets annually - Issue apportionments annually - Issue tenant certificates annually - Landlord must not recover more than 100% of costs - Any interest must be paid back into the service charge account - Service charge must be held in a separate bank account - Tenants must only hold the amount of service charge funds in dispute, not the whole amount - Must be recovered in accordance with the lease - Landlords must amend service charge issues quickly
35
How can you apportion a service charge?
- Weighted floor area - Floor area - Fixed % - Rateable value
36
What is a weighted floor area apportionment?
Acknowledges that just because a space may be bigger, it does not mean they use more of the services Weights the floor area
37
Can you name some benchmarking sites for service charge?
JLL MSCI OSCAR (Office Service Charge Analysis Report)
38
What is a sinking fund?
Periodically setting aside money for the replacement of a wasting asset
39
What is a reserve fund?
A fund formed to meet the anticipated future costs of maintenance and upkeep, to avoid fluctuations
40
What is a restrictive user clause?
Limits or prohibits certain uses under the lease (ie only certain hours/days) Can negatively impact value
41
What are the 3 forms of insolvency arrangements?
- CVA - Administration - Liquidation/Receivership
42
What is a CVA?
Company Voluntary Arrangement Voluntary arrangement with creditors outlining how and when debts can be repaid - for insolvent companies but the Directors believe there is a viable future.
43
What is administration?
A rescue route for businesses. Administrator is able to take control of assets to decide how best to resolve company's issues. May decide to wind up.
44
What is liquidation?
Liquidator appointed by creditors to to release assets and pay debts.
45
What would you do if a tenant goes into liquidation?
- Tell Client - Make contact with administrators - RTL - Consider schedule of dilaps - Consider empty rates
46
What is rates mitigation?
Strategies used to reduce or avoid paying business rates on properties, particularly for vacant properties
47
What is privity of contract?
Only the parties to a contract can acquire rights under it or have obligations imposed upon them under it, even if the contract was created to give that party a benefit
48
What is an improvement under the LTA 1927?
Any alterations that render occupation of the premises more beneficial to a tenant constitute improvements - adds letting value
49
What is a reasonable time frame when dealing with alts/alienation?
No statutory deadlines, landlord must be acting competently and professionally though
50
What are tenant's obligations in relation to alterations, when it comes to dilapidations?
Refer to the Licence to Alter and establish if they are required to reinstate.
51
What is an enforcement agent?
An official who acts on behalf of the courts, primarily to collect debts
52
What is peaceable re-entry?
A landlord's right to reclaim a property without court action, typically by re-entering it and securing it, often by changing the locks
53
What are the two tests for corporate insolvency?
The balance sheet test and the cash flow test. If a company's debts are greater than its assets then the company can be said to be balance sheet insolvent
54
How do the Occupiers Liability Act 1957 and 1984 differ?
1957 = duty of care to lawful visitors 1984 = establishes responsibility for unlawful visitors (trespassers)
55
What are the limitations of the Service Charge Professional Standard?
- Cannot override the lease - Proportionality (to what extend it coincides with the services, scale etc)
56
What appendices are in the Service Charge Professional Standard?
Compliance Checklist Standard Industry Cost Classifications Service Charge accounting sample report Service charge handover procedures
57
What is a duty of care deed?
A duty of care deed is a way for lenders to have greater protection for their loans when they are lending in relation to a property which is rented out and managed by an agent.
58
What is TUPE?
Transfer of Undertakings (Protection of Employment) regulations - it ensures employees maintain their existing terms and conditions of employment when their business or service is transferred to a new employer.
59
What is the difference between the SC Professional Standard and the SC code?
Professional Standard = clear rules on ethics. This was not covered in the SC code
60
What does the professional statement say about timeframes?
1. Budgets are issued at least one month prior to the start of the service charge year. 2. Year-end statements of actual expenditure are issued within four months of the end of the service charge year.
61
What is the The Corporate Manslaughter and Corporate Homicide Act 2007?
When a firm/individual can be prosecuted for a gross breach of duty of care, leading to someone's death
62
What is the legislation that covers the treatment of Japanese Knotweed?
Wildlife & Countryside Act 1981 - illegal to plant, or cause knotweed to grow, or to fail to prevent it from growing
63
What fines can be issued for not treating Japanese knotweed?
Individuals - max. fine of £2.5k Company - max. fine of £20k
64
What case law relates to Japanese Knotweed?
Network Rail v Williams
65
What are the 3 types of asbestos?
Crysotile - white Crocidolite - blue Amosite - brown
66
Under the Building Safety Act 2022, what is a higher risk building?
Buildings of at lease 18 m (7 storeys) with at least 2 residential units.
67
What is a listed building?
Buildings judged to have national importance due to their architectural / historic importance
68
What legislation covers listed buildings?
Planning (Listed Buildings and Conservation Areas) Act 1990
69
What action can be taken if a listed building falls into disrepair?
Repairs notice Urgent works notice S215 notice (under Town & Country Planning Act) CPO
70
What are the grades of listed building?
Grade I - exceptional interest Grade II - special interest Grade II* - more than special interest

RICS APC (23 decks)

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