Disposals: Marketing The Property Flashcards
When marketing a property what laws must you comply with?
-Data Protection Act 1998
-Estate Agents Act 1979
-Landlord and Tenants (Covenants) Act 1995
-Misrepresentation Act 1967
-Consumer Protection from Unfair Trading Regulations 2008 and Consumer Rights Act 2015 (when dealing with consumers)
-Business Protection from Misleading Marketing Regulations 2008 (when dealing with businesses)
-Auctions (Bidding Agreements) Acts 1927 and 1969.
What should you do when taking on a subletting or assignment?
Terms of the lease - that the proposed lease is allowed and that proposed use is okay, check for any side agreements, any licensee on the property, service charges and provisions allocations.
What must you do on receipt of any agency instruction?
Inspect the property internally and externally. Only on special circumstances should a property be placed on the market without an inspection, the particulars must detail this.
What are you doing when providing a market appraisal?
Providing realistic and justifiable advice in regard to the likely selling price or rent based on your best professional judgement.
-A reflection of the current market conditions
What should you take into account when providing a market appraisal on a letting
Likely lease terms that wold be acceptable to the market.
What should be included in a market appraisal?
-Agents realistic and justifiable opinion of the FH/LH values based on the current market.
-Relevant comps
-Statement that the report is not a formal valuation
-Make clear you are providing an estimate of anticipated market price/rent
How would you undertake a market appraisal
-Inspect the whole property inside & out
-Measure up as accurate as possible (for sale/letting)
-Review general condition of the prop
-Ask the client Qs to establish that they are the legal owner & relevant issues.
-Find relevant comps in the local area
When reporting your advice to the client what should you state?
Recommended selling/letting price in writing, even if discussed verbally, where letting provide recommend lease terms.
Report needs to be fair, clear, ref current market conditions & estimated period to complete sale/letting.
Do you need to keep records for market appraisals?
Yes, same as standard jobs for the same period.
Should all relevant documentation be obtained prior to marketing the property?
Yes. If an EPC it must be instructed prior to marketing the property and then you should provide it by 7 days but you have 21 days after the expiry of the 7 days to obtain and list the EPC rating.
If there is a Green Deal what must you do?
Must advise potential buyers or tenants.
What should you do when selling an investment? (Or assignment)
Provide a copy of any of the relevant leases, service charge statements & relevant invoices.
What must you obtain prior to marketing a property
Clients permission and ensure that the client is the persons with the legal right to dispose of the prop, agreement to an appropriate marketing strategy.
What should be included within a the marketing strategy?
-Agents analysis of the current market (local & national)
-Agents recommend method of sale & reasoning
-Marketing material & budget
-Documents to be provided
-Recommended asking price & likely selling price
-Agents opinion on timescale
-Agent approach to viewing & key holding
-Data protection
-Mechanism for reviewing
Who should draft the particulars?
The person who inspected the prop, or they should enter the relevant info and review the particulars.
Particulars should include material facts including those about contamination & other issues of significance for potential buyers.
What do you need prior to making particulars live
Clients written approval
What should be included on the particulars?
-Location/address
-Availability, nature of services facilities, amenities
-Proximity to services, places, facilities or amenities
-Accommodation & size (state measuring practice)
-Fixtures/fittings
-Physical/ structural characteristics, form of construction - if a physical issue has to be stated
-Fitness for specific purpose
-Conformity or compliance with a specific scheme
-Survey, inspection, investigation if relevant, have permission and if you have seen the doc yourself.
-Grants/prizes for design
-History, age, use of land
-Price (if in physical print must be displayed with the date)
-Title type leasehold or freehold
-Leases & licenses, liability for service charge/repairs
-Business rates
-Exisiting planning consents
-Restrictive covenants/easements/rights of way
What should you ensure when online marketing?
-Transparency in the estate agency operation as a business
-Honesty in obtaining prop details (only advertising what you have been instructed)
-Quality in the conduct of your business
-Accuracy of the prop information
-Respect for the privacy and security of agents property and other users data.
What should you do in regards to boards?
-Must only erect a for sale/to let board on prop your instructed to sale/let.
-If a multiple occupation prop must make clear one referred to
-You must not replace another agents board with your own
-Can only put up a board with clients permission
What must you do with client keys?
Keep them coded in order to keep them secure.
What should you do once you have undertaken a viewing?
Record the viewing, advise client of viewing, feedback received (within 3 working days).
How is your personal safety at risk as an agent?
Visiting properties, meeting people you don’t know, travelling between visits. You should have a buddy so someone can check in on you.
What must you do when responding to questions from potential buyers
Advise them of all relevant issues to the best of your knowledge & not make any material omissions from the info you provide.
What must you make clear to the sellers prior to the disposal
-Who will have the liability for the fee
-Your recommended method and any appropriate alternatives risks, advantages & disadvantages of each approach
-Costs for both buyer & seller & implications for stamp duty
What must you do when agreeing a method of sale with the client?
Discuss all the options available to the seller, make clear the risks of each approach, specific issues stated;
-Who will have the liability for the fee
-Your recommended method & pros/cons/risks
-Costs for both buyer/seller & implications for stamp duty
What is the surveyors duty as an auctioneer
-Surveyor has a duty to both parties
-Have power to exchange contracts, binding the seller and buyer
-Should act inline with Auctioneers selling real estate guidance note
-Should refer to Auctioneers selling real estate guidance note
What must you do as the agent when selling by private treaty
-Take reasonable steps to find out source and availability of funds
-Advise client of all offers received as soon as reasonably possible & in writing providing enough details for the client to understand strengths/weaknesses of the offer
Define how you must not discriminate against any prospective purchaser/lesse
-Failing to inform client of offer
-Informing the client of offers slower than you have with other offers
-Misrepresenting the nature of the offer/revival offer
-By sending prop details to clients who’ve promised to use your services first
-Making it a condition that the potential buyer must use a specific service from your company or anyone else
How quickly should you report an offer?
24hrs
What should you include when reporting an offer?
-Time/dat of offer
-Amount
-Any conditions attached
-Source of funds
-Any services offered by you to the buyer
-Any other factors that may influence the purchase
In accordance with the Fraud Act 2006, what must you not do?
Make up fake offers.
In a bidding situation can you discuss bids received with interested parties?
No, but you can give an indication i.e offer received are far in excess of the asking price or your offer is well below offers received.
What should you do during the negotiation period?
-Keep client informed
-Seek their consent
-Keep them informed of all submitted/amended offers
What must you do when an offer is accepted?
Generate HoTs, send to both parties and their legal representatives.
What should you do if a purchaser seeks other services off you, whilst still purchasing?
Advise the client (the vendor) that your services have been requested and what for.
What must you do when selling by tender?
-Must clearly identify any fee liability for buyers on sale/letting particulars
-All offers must be advised to your client unless otherwise specified in writing
-Bids form should be attached to the particular & instructions on how to submit bid clear & deadline
-Must state if formal or informal
What should prospective tenants know prior to making an offer to rent?
-Length & break terms
-Will they have security of tenure
-Rent review arrangements
-Rights to assign, sublet etc…
-Repairing obligations
-VAT status of prop
Should you check the identity of a prospective tenant?
Yes
Should a SofC and inventory be created prior to a letting?
Yes
When would an agreement for lease be used?
(Plot F, Helston BP)
Needed if there’s a period between entry into the agreement and the lease i.e if the props still being built
What should be included within the Heads of Terms?
-All tenancy info
-Prop address
-landlords
-tenants
-rent
-rent free period
-type of lease
-LL initial works & timings
-Tenants initial works & timings
-guarantor/ rent deposit
-Lease length, breaks, rights, notice periods, start date
-Break clauses, renewal rights, security of tenure, rent reviews
-Assignments, subletting
-Services & service charges
-Repair obligations, FRI/IR
-Alterations, permitted use, insurance, delaps, rates, legal costs, conditions, solicitors details.
When is a lease classed as complete?
When the landlord, tenant and guarantor have signed it
What should you do when acting as an acquisitions agent?
-Agree a detailed brief with your client in writing &TofEs
-Use your local knowledge & networks to meet clients expectations
-Provide your client with regular updates on progress
-When your client wishes to make an offer this should be done in a reasonable timeframe
-When viewed a prop, provide detailed feedback on if the prop meets clients requirements
What should you do where there is a COI?
-Disclose this in writing and seek consent from clients to proceed
-Take necessary steps to always act in the best interest of each client
-Have to be able to act independently for each client, if you can not you must not accept the instruction
What should happen at the end of the instruction?
-Written confirmation to cease marketing either by agent or client, includes date of termination and fee liability
-Invoice should be issued
As deemed in the Limitation Act 1980 how long should you keep files for?
15yrs relates to professional negligence claims
Define market appraisal
An estimate of market price or rent based on market evidence and knowledge of the local market.
Can you charge VAT on a deposit?
NO
Define Caveat emptor
Buyer be ware, used to make clear that buyers have to make their own investigations
What part of what act needs to be stated for a lease to be outside the act?
section 24-28 of the Landlord and Tenant Act 1954 Part II
Why would a LL want a lease outside the act?
To give more flexibility, better bargaining point, easier to evict tenant
What happens post completion in a sale?
-Agents fees due
-Completion statement
-Indemnity policies
-Docs send for land registry
-SDLT return needs to be submitted within 14 days of completion.
What use classes does class E incorporate?
A1, A2, A3, B1 & D1
Name five uses classed as Sui Genuris
Pubs
Theatres
Filling stations
Laundrettes
Clubs
Takeaways
Cinemas
Define Sui Generis
Use of its own
Define use class C
Residential
Define an agreement to lease
A contract between two (or more) parties to enter into a lease. The agreement will place a contractual obligation on the respective parties to enter into the lease, either on a fixed date in the future or following the satisfaction of conditions set out in the agreement
What is required for an agreement to lease?
Warranties on the building/components
What does internal repairing and insuring include?
Internal & shop front but not in case study
What basis were your comparable on?
Internal repairing & insuring
When would you need to undertake a AML check on a prospective tenant?
Where the monthly rent equates to €10,000 a month = £100,000 pa
What can you continue to do in informal tender which you can’t in formal?
Negotiate
If a tenant left during or at the end of their lease and left F&Fs in situ, whose are they?
The landlords
What do you hold a rent deposit in?
A rental deposit deed
Can deposit accounts be interest baring?
Yes
Who benefits from the interest on a deposit account?
The tenant
What does the misrepresentation act 1967 cover?
Relates to a misrepresentation or a false statement of fact made by a party during pre-contractual enquires, which has the effect of inducing the party to purchase
What does the misrepresentation act 1967 cover?
Relates to a misrepresentation or a false statement of fact made by a party during pre-contractual enquires, which has the effect of inducing the party to purchase
What are the key principles of the law of property act 1925?
Simplify the purchase of land by streamlining interests in land
Started the intro of registered land (i.e land registry - now land registration act 2002)
What are the key principles of the Landlord and Tenant Act 1927?
-Give this right for the tenant to receive rumination for improvements they have made, the tenant must have given the LL notice of the works to be undertaken with specification and plan. If LL doesn’t respond within three months T can claim
-Alteration: tenant can undertake these and don’t necessarily require LL approval as long as they add to the letting value of the property.
-Compensation claim has to be submitted within three months of notice to quit
-Can only claim for costs
What are the key principles of the Landlord and Tenant (Covenants) Act 1995?
-balance the rights and obligations of both landlords and tenants
-Introduced the lawful assignment of a lease
-Introduced AGAs
What is the fine for marketing a property without an EPC?
2.5% of RV
Min £500, max £5K
Where is a rental deposit held?
Rental deposit deed
-Should state if to cover rent or all obligations under lease
-Tenant due any interest accrued at time of repayment
What is the main documentation by the RICS for agency?
UK Commercial Real Estate Agency
What does the Landlord and Tenant (covenants) act 1995 cover?
Introduced AGAs - Aimed to ensure that once a tenant was assigned a lease, they would be released from future liability and that landlords would have adequate remedies in the event of a breach of covenant.
What are the key points of the Landlord and Tenant act 1985?
The tenants right to a safe property -requirement for electrical safety certificate at the start of lease, once tenant in situ depending on lease terms it will become their responsibility
Do you pay additional rates on vacant premises?
No you pay the business rates as standard following three months rate relief
When is SDLT payable within a lease?
At seven years because the lease then needs to be registered
Who governs AML?
National Crime Agency Investigates
HMRC governs
What do you require in order to undertake an AML check?
Proof of address and proof of ID
How would you account for tenants works at rent review?
If a rent free period had been granted for them then they would be renalised
What is the benefit of selling via formal tender?
Certainty of sale
When would Display Energy Certificate required?
It’s at least partially occupied by a public authority (eg council, leisure centre, college, NHS trust) it has a total floor area of over 250 square metres. it’s frequently visited by the public.
What is the difference between guide price and reserve in auctioneering?
Guide price idea of value of the property & influences the amount at which the auctioneer will start.
Reserve is the lowest a bid seller will accept
What are the six principles of the Estate Agents Act 1979?
1.Honesty and accuracy
2. Clarity on TofE
3. Open and Transparent
4. No discrimination
5. Pass on all offers in writing
6. Keep clients money separate
Does a subletting or renewal have to be EPC compliant?
Yes, E or above.
What buildings are exempt from EPC rating?
Places of worship, buildings standing for less than 2 years (portocabins), low energy building (agri barns), standalone buildings of less than 50sq m, listed buildings (where reasonable improvements can’t be made)
What are the requirements for an SME?
-Employs less than 250 people
-Annual turnover of less than 50 million Euros
-Where an investor owns less than 50%
What is guzumping?
Seller accepts an offer from a buyer but, at a later date, the seller will not exchange contracts unless more money is paid.
How can a landlord make a deduction from a rent deposit?
Held in a rent deposit deed, tenant needs to be notified and and had the opportunity to rectify prior to making the deduction
What are the seven aspects of a land reg compliant plan?
- Drawn to scale (1:100 or 1:200)
2.Have a scale measurement bar - Have scale noted on the plan
- Include a 1:1250 scale location plan (for urban areas)
- Full address and postcode
- North Point
- Demise in red outlined on the inside edge of the property boundary
In regards to 13 Pargolla Road, why did you have to have an electrical safety report?
Resi above the commercial element
LL & T act specifies the electrics need to be safe at the start of a tenancy - this does primarily apply to resi letting.
The Occupiers Liability act 1957 & 84 makes it clear the LL has a duty of care to provide a safe property
When is the government looking to increase minimum EPC ratings by?
2027
