Property Management - Summary of Experience Flashcards
(119 cards)
1
Q
Tell me about RICS guidance on commercial property management
A
RICS Commercial Property Management in England and Wales 2011, 2nd Edition (guidance note)
2
Q
Tell me about RICS guidance on Real Estate Management
A
RICS Real Estate Management, 2016, 3rd Edition (professional statement)
3
Q
What are the 3 key principles of RICS commercial property management in England and Wales
A
- Tennt management
- Building management
- Financial management
4
Q
What status does RICS Real Estate Management hold and what edition is it?
A
Professional statement - mandatory
2016 -> 3rd edition
5
Q
What are the requirements under RICS Real Estate for Rent Demands ?
A
Submit rent demands in a timely manner and ensure they are clear
6
Q
What are the requirements under RICS Real Estate Mangement for rent arrears?
A
Ensure efficient system is in place to monitor rent collected and chase those not received
Keep Client informed
6
Q
What are the requirements under RICS Real Estate Mangement for rent arrears?
A
Ensure efficient system is in place to monitor rent collected and chase those not received
Keep Client informed
7
Q
Why is effective occupier liason important?
A
Seeking to create a good relationship with occupiers is essential for good property management
8
Q
What are some of the core duties of a property manager?
A
- Liaising and reporting with the Landlord
- COllection of monies
- Defaulting occupiers
- Service charge
- Managing building
- Occupier liason
- H&S Compliance
- Energy management
- Procurement of third party suppliers
9
Q
What are some of the key obligations associated with collection of monies?
A
- Maintian database to record financial position of occupiers
- Make payment processes clear for occupiers
- Have mechanisms to notify any default in payment or over-payment
- Have process to promptly pursure defaults
- Have process to forward Client money to Client
- Understand all relevant documents
10
Q
Explain your understanding of the Occupier Liability Act 1957?
A
Imposes duty of care on persons occupying or in control of any premises in relation to visitors
11
Q
Under the Occupier Liability Act 1957, what happens if an injury was caused to a visitor due to the fault work of a third party?
A
Occupier not to be treated without more as answerable for the danger, if he acted reasonably, entrusting the work to a competant contractor, taking the necessary steps to ensure competance and skill, and the work had been done properly
12
Q
What is the Occupiers Liability Act 1984?
A
Confers a duty on the occupier of a premises to any persons other than visitors
13
Q
How can you satisfy your duty of care to persons other than visitors under the Occupier Liability Act 1984?
A
Take reasonable steps to give warning of the danger concerned or to discourage persons from incurring the risk
14
Q
How can you satisfy your duty of care to persons other than visitors under the Occupier Liability Act 1984?
A
Take reasonable steps to give warning of the danger concerned or to discourage persons from incurring the risk
15
Q
Who is your main duty of care to?
A
the Client
16
Q
How does the Occupiers Liability Act 1957 impact your role?
A
- have a duty to ensure any visitor is reasonably safe whilst on the property
- Won’t be released from liability by putting up a simple warning sign -> sufficiently clear
17
Q
How does the occupiers liability Act 1984 impact your role?
A
- Duty owed to any non-visitor if you’re aware of a danger on site or reasonable to believe any person may be at risk on site
- Expected to offer reasonable protection against danger
18
Q
What is an absolute covenant?
A
Complete bar/prohibitation against doing something
-> Complete control for Landlord
19
Q
What is a qualified covenant?
A
Requires Landlord consent -> no statutory implied provision that landlords consent is not to be unreasonably withheld
20
Q
What is a fully qualified covenant?
A
A covenant that requires landlord consent, but states it is not to be unreasonably withheld
21
Q
What does it mean for consent not to be unreasonably withheld?
A
Landlord has a duty to consent unless it is reasonable not to do so
-> Duty of providing reasonableness lies with Landlord
22
Q
What does it mean for consent not to be unreasonably withheld?
A
Landlord has a duty to consent unless it is reasonable not to do so
-> Duty of providing reasonableness lies with Landlord
23
Q
What is the statutory duty placed on Landlords under the Landlord & Tenant Act 1927?
A
- Sections 1-3 give a tenant who has made improvements the right to compensation (improvements made during tenancy)
- Section 18 limits/defines the amount of damages the Landlord is able to recover for breach of the tenant repairing covenant
23
What is the statutory duty placed on Landlords under the Landlord & Tenant Act 1927?
- Sections 1-3 give a tenant who has made improvements the right to compensation (improvements made during tenancy)
- Section 18 limits/defines the amount of damages the Landlord is able to recover for breach of the tenant repairing covenant
24
What is the statutory duty placed on a landlord under the Landlord & Tenant Act 1988?
This act imposes statutory duties on landlords in connection with covenants to assign and underlet -> serve notice of decision within a reasonable period
25
What is the cirporate manslaughter and corporate homicide act 2007 and what are your duties under it?
Clarifies criminal liabilities where serious failures in the management of H&S results in fatalities
- Duty of care to peoples safety
- Duty of care to systems of work and equipment
- Duty to the conditions of work sites and other premises
- Duty of care to products or service supplied to customers
25
What is the cirporate manslaughter and corporate homicide act 2007 and what are your duties under it?
Clarifies criminal liabilities where serious failures in the management of H&S results in fatalities
- Duty of care to peoples safety
- Duty of care to systems of work and equipment
- Duty to the conditions of work sites and other premises
- Duty of care to products or service supplied to customers
26
What does unreasonably withheld and delayed mean?
The Landlord has a duty to consent unless it is reasonable not to do so
- reasonableness lies with Landlord to prove
- Duty to respond within a reasonable period
27
How does the Equality Act 2010 relate to alterations?
Consent cannot be unreasonably withheld regardless of lease wording if works are required for Equality Act compliance
- must respond within 42 days
28
What is a duty of care deed?
Document between the Property manager and the Landlords funder
29
What is the purpose of a duty of care deed?
To create a direct legal relationship between the PM and funder, particularly to payment of rent, but also more generally
30
Why is a duty of care deed often required?
More security for lending due to volatile prices and risk averse
31
What are 3 of the key principles in RICS Real Estate Management?
- conduct business in an honest, fair and transparent manner
- Not discriminate unfairly in any dealings
- Do the utmost to avoid conflicts of interest -> deal with them openly, fairly and promptly when they do arise
32
What are some key lease clauses you are familiar with?
- Break clause
- Rent Review
- Repair
- Alienation
- Rent
- Service charge
33
What is alienation?
The right granted in a lease to assign, sublet or share occupation of the premsies
34
Tell me about your responsibilities for occupied areas?
- Collection of rent and SC and insurance
- Ensure compliance with lease obligations
- Occupier liason
35
Tell me about your responsibilities for communal areas?
- H&S compliance
- Maintain plant & equipment
- Procure service contracts
- Understand responsibilities to repair and maintain
36
What is a service charge?
Amount that tenants pay to cover the cost of providing communal services to a building or the surrounding estate
37
Tell me about RICS guidance on service charge
RICS Service Charge in Commercial Property, 1st Edition, 2018
38
How would you handover a service charge account upon sale or change in manager?
provide:
- property financial info
- tenant financial info
- financial transfer
- statement on SC movement
- Info on sinking or reserve funds
- depreciation charges
- security deposits for utilities
39
When was RICS Service Charge guidance last updated?
2018 - 1st edition (professional statement) -> effective 2019
40
When was RICS Service Charge guidance last updated?
2018 - 1st edition (professional statement) -> effective 2019
41
What are 3 of the mandatory principles of RICS service charge professional statement?
1. All expenditure the owner/manager seeks MUST be in accordance with the lease
2. Timely issue of SC budgets (minimum 1 month)
3. Ensure apportionment matrix and explanatory comments issued with budgets
4. SC monies held in one or more individual bank accounts
42
What does the Service Charge usually include / exclude?
Exclude:
- Improvements above usual cost of repair
- Future redevelopment cost
- Void costs
Include:
- Maintenance contracts
- Repair to communal areas
- Utility chrges
43
What are some of the core principles of the service charge statement?
- Procure services on a value for money basis
- Have clear policies on how to manage services
- Ensure prompt paymnet from occupiers for SC
44
What are some of the limitations of the Service Charge professional statement?
- Cannot override the lease
- Extent of following best practice is dependent on property (e.g size, nature) -> proportionality
45
Tell me about an element of service charge best practice?
- Standard and quality service provision
- Value for money
46
What do chapters 2, 3 and 4 of the service charge proffessional statement relate to?
2 - Mandatory requirements
3 - Core principles
4 - Best practice
47
What do the appendices of the SC proffessional statement provide?
- COmpliance checklist
- Standard industry cost classifications
- SC accounting sample report
- SC handover procedures
48
What are the timescales for reporting within the SC professional statement?
- issue budget minimum 1 month before accounting period
- issue reconciliation within 4 months of SC year end date
49
What is a budget?
The expenditure estimated by the Landlord or its manager that will be incurred in the accounting period
50
What is a management fee and what does the SC professional statement say about them?
The reasonable price for managing the provision of services and fulfilling the principles of the professional statement
- set on fixed price basis
- cannot override lease cap
50
What is a management fee and what does the SC professional statement say about them?
The reasonable price for managing the provision of services and fulfilling the principles of the professional statement
- set on fixed price basis
- cannot override lease cap
51
What is your duty of care in relation to service charge?
- Duty of care to both owners and occupiers to act with professional care, iligence, integrity and objectivity
- Duty to manage the property
51
What is your duty of care in relation to service charge?
- Duty of care to both owners and occupiers to act with professional care, iligence, integrity and objectivity
- Duty to manage the property
52
How does ADR relate to SC under the professional statement?
ADR is supported and recommended as the basis to resolve SC disputes
- lease should make a provision for ADR
53
Tell me about allocation under the SC professional statement
spliting of costs and services to assign them to specific schedule or cost category
54
Tell me about apportionment under the SC professional statement
Basis and method of apportionment should be fair and reasonable
- occupiers bear an appropriate propertion of total SC expenditure reflecting the benefit and use of services
-> floor area basis
55
Tell me about communication under the SC professional statement
Managers certificate of SC expenditure should be supported by an independent review of the SC account
56
Tell me about financial competance under the SC professional statement
Statements / certificate of expenditure issued in non-partisan spirit, acting as experts
Industry Standard Cost Classifcations used in reporting budget and actual expenditure
57
Tell me about consultation in the service charge professional statement
- All occupiers are given the oppertunity to comment on the budget
- Occupiers are consulted on the levels of service required and introduction of new services
58
Tell me about occupier responsibilities in the SC professional statement
Should ensure prompt payment of SC and BSC and recognise the SC provision of the lease has legal effect
59
What are the remedies for default?
- CRAR
- Rent deposit draw down
- Statutory demand
- Winding-up petition
- Claim on AGA
- Peaceable re-entry
- Payment plan
60
What is CRAR and when did it come into force?
Commercial Rent Arrear Recovery -> 2014
61
What did CRAR replace and how does it differ?
Common law right to levy distress
- CRAR only applies to leases and not licences
- Only applies to rent
- minimum 7 days rent outstanding
- Only available for commercial
- 7 days notice prior to seizing
- Agents only attend in business hours
62
What are the requirements of CRAR?
- Minimum 7 days rent outstanding
- 7 days notice
- Details included within notice and served in a specific way
- 12 months to seizegoods from notice served
- seized only in business hours
- Tools of the trade (up to an aggregate value of £1,350) are exempt
- hold goods for 7 days
63
What goods can be seized by CRAR and by whom?
- only goods belonging to the tenant
- Cannot recover tools of the trade up to an aggregate value of £1,350
- Cannot recover goods being used
- Enforcement agents can seize
64
Can the tenant appeal CRAR?
Yes, the tenant has the right to apply to the court for an order that no further steps be taken under CRAR without permission of the court
65
What is a statutory demand?
Written notice from creditor -> will state that is debt is not paid, or arrangement made, within 21 days, creditor can apply to make you bankrupt
65
What is a statutory demand?
Written notice from creditor -> will state that is debt is not paid, or arrangement made, within 21 days, creditor can apply to make you bankrupt
66
What are the timescales under a statutory demand?
21 days to pay debt or make arrangement
67
When can a statutory demand be served?
Minimum £750 outstanding
68
When can a statutory demand be served?
Minimum £750 outstanding
69
What is the next step following a statutory demand?
Winding-up petition
70
What is a winding-up petition?
Statement of intent to credit to shut-down business due to unpaid debt
- 7 days before financial info becomes public
71
Under what legislation can you pursue a former guarantor?
Section 17 f the Landlord and Tenant (covenant) Act 1995
72
What notices must be served on a former guarantor and what are the relevant timescales?
Section 17 notice -> within 6 months of the debt arising
73
What is a bailiff?
Legal officer to whom some degree of authority or jurisdiction is given
74
What is TORT notice?
Legal document alerting the owner of items that have been abndoned / left on private land or property
75
What is peaceable re-entry?
Physically re-entering the property, when it is empty, to regain possession of the unit (changing the locks)
76
How can you avoid recognising the continuance of a lease?
Do not communicate with the tenant
Rent stop -> don't demand sums
77
What is a continuing breach?
Re-occurs every day -> a fresh right of forfeiture arises each day
- breach of user clause
- Breach of repair covenant
78
What is a once and for all breach?
Right to forfeit is lost upon waiver
- pay rent
- carry out repairs by a specified date
- assign or sub-let
79
What does the leasehold property (repairs) Act 1938 say about breaches of covenant to rpair?
Limits landlords rights to claim damages or forfeit for disrepair during the current tenancy (3 years unexpired on a 7+ year term)
80
What is a S.146 notice? What time frames relate to it?
Section 146 of the Law and Property Act 1925
- Served by a landlord who wishes to commence forfeiture proceedings against a leaseholder following a breach of lease
- Remedy within a 'reasonable period' -> dependds on nature of breach
81
Talk to me about relief from forfeiture?
tenant can claim relief from forfeiture
- required to remedy the breach in entirety to be successful
No strict time limit, however usually 6 months maximum to apply for relief
82
Can you claim service charge in CRAR?
No, CRAR is for rent arrears only
83
What should you consider prior to forfeiture?
- Commercial advantage from forfeiting
- Waiving rights to forfeit
- Relief from forfeiture
- Evidence to forfeit
- Time frames
84
What are void costs and what do they include?
Costs attributed to vacant units
- Rates
- Utility bills
- SC for the vacant unit
85
Tell me about RICS guidance on Licence for Alterations
RICS Licence for ALterations in Commercial Property, 2nd edition, January 2022 (guidance note)
86
How would you consider the impact of proposed alterations on building operations?
- nuisance to tenants if multi-let
- impact on landlord systems and equipment
- Impact on energy performance
- Completely within Tenant demise?
- Obligations on consent?
87
How do dilapidations relate to alterations?
Licenec to Alter is an extension of the lease and so will be considered at lease end -> required to reinstate to original condition -> included within dilaps
88
What H&S considertions relate to alterations?
- Risk assessment & site specific method statements
- Permits required (working from height / hot works)
- Asbestos register
- Construction Regulations (2007) apply to refurbishment
89
How do MEES relate to alterations?
Reasonable to withhold consent if alterations negatively impact EPC
90
What levels of approval decisions are there in granting alterations?
- Approved
- Approved with modifications
- Approved subject to conditions
- Rejected
91
Can consent for alterations be provided retrospectively?
Yes
Can also rentalise unauthorised works at next RR depending on lease
92
How did you advise on the Licence to Alter at Glasshouse Yard?
- Received application including comprehensive plans
- Reviewed lease to determine obligations and what tenant is permitted
- Advised my Client we had recieved a request and that third party input was required due to complex M&E
- COnfirmed fees with tenant
- M&E experts and building surveyors reviewed and approved works
- CIF drafted and sent recommending the works are approved, stating the associated lease clause
- Client approved and sols drafted LTA
- Works completed and i inspeted to ensure all in accordance with Licence
93
What fees were involved with the Licence to Alter at GHY?
Workman fees
Legal fees
Building Surveyor fees
M&E consultant fees
94
What factors need to be considered in a Licence to Alter?
- nature of works
- Impact on building operations
- Impact on energy performance
- Warranties
- Dilaps / reinstatement provisions
- Equality Act compliance
- Improvements
- H&S
95
How did you assess your competancy in relation to the Licence to Alter at GHY?
Reviewed the plans provided
96
What legislation are you aware of in relation to applications to assign?
Landlord and Tenant Act 1988
Landlord and Tenant (covenant) Act 1995
97
Why did you request financial information in the Licence to assign?
To determine tenant covenant strength and allow me to make a well-informed recommendation to my Client
98
Did you undertake a credit report on the proposed tenant in the Licence to Assign, if so, what was the result?
Yes -> credit safe report
Scored 39 -> moderate risk
99
What is an authorised guarantee agreement
Agreement where the outgoing tenant guarantees the performance of the incoming tenant in terms of adhering to their lease covenants
100
Would your advice have differed if the Tenant was of a stronger covenant strength?
Potentially -> less need for AGA or additional deposit, however, still useful to provide Landlord with additional security
101
How did you assess covenant strength in the Licence to assign?
- Reviewed companies house
- Creditsafe report
- Financial review
102
Under what circumstances is it reasonable to reject as assignment request?
- Stipulated in the lease. -> usually if incoming Tenant cannot meet liabilities under lease or if there is a breach in lease covenant
if relying on lease or providing consent with conditions, likely that no statutoryduty is breached
103
Can you refuse an assignment based on the fact property value is reduced as a result?
No -> Landlord and Tenant Act 1988 -> reasons for withholding for consent not to be unreasonably delayed
104
What would you do if you discovered unlicenced works on review or assignment?
- potential to reject assignment
- rentalise unlicenced works on review
- retrospective licence
- S.146
105
What is a PPM?
Planned Preventative Maintenance
106
Why is a PPM beneficial?
- Ensure issues are identifed before they develop further
- Assists with management -> less need for major unplanned repair work
- Ensures H&S compliance
- Adds value by preserving condition
107
What areas of concern were highlighted by the PPM in Riverbridge House?
- Fire escapes in below average condition - repairs and redecorations required
- 4 roofs all in poor condition
- Staircase floor tiles and carpet in poor condition -> heavy traffic
- Allowances included to repair the damaged and soiled metal composite cladding
108
What works were undertaken at Riverbirdge as a result of teh PPM?
- Fire escapes and roofs have been repairs / redecorated
- Lower priority items to tke place in Year 2 of structured repair plan
109
How were PPM costs incorporated into the budget?
PPM detailed a structured spending plan to complete priority works
3 year structured budget recover plan , reducing high outlays to tenants
Detailed explanatory comments included
110
Whatis a tender?
Silent auction
Contractors submit bids for the work, addressing each details in the scope of works
111
What are the benefits of tendering
- Ensures value for money
- Ensures quality
- Required by Workmans purchasing policy
- Ensures best fit for work
- Market awareness
112
What is your firms purchasing policy?
- obtain 3 or more competitive quotes for works over £5k
- use Workman approved contractors only
- Keep records on EFS
- works / purchases awarded by Workman standard Purchase Order
113
Were there any improvement works incorporated into the PPM works?
No -> if there were these would have to be capital expenditure from Client, not SC recoverable
