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L&L Flashcards

1
Q

Estate Agency Act

RICS Global Real Estate Agency and Brokerage Professional Statement 2016

RICS UK Commercial Estate Agency Professional Statement 2016

mandatory statement with 12 core principles which agents must observe?

A

global one is basically the same as the Uk one.

12 core principles:

  1. Act in an honest, fair, transparent and professional manner.
  2. carry out work with due skill, care diligence and ensure all staff employed have necessary skills to carry out tasks
  3. ensure clients are provided with ToB that are fair and clear with details of the firms complaints handling procedure.
  4. do the utmost to avoid CoI and deal w them fairly
  5. all communications should be transparent, clear, timely and decent to clients.
  6. all advertising and marketing material is honest and truthful
  7. any client money is held separately and is covered by adequate insurance
  8. hold appropriate PII /errors or omissions insurance to ensure a customer does not suffer loss because of negligent.
  9. make it clear the identity of your client and make sure all parties are aware of their obligations
  10. give realistic assessments of selling prices/rents/financial costs having regard to market evidence and using best professional judgement
  11. ensure all meetings, inspections and viewings are carried out in accordance with the clients wishes having due regard for personal safety and security.
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2
Q

RICS UK Commercial Estate Agency
Professional Statement 2016

keys areas of agency covered are? (5)

A

acting ethically - having duty of care, gifts and incentives and dealing w CoI

securing instructions - legal requirements, AML checks, types of agency and H&S

Marketing the property - legal requirements, market appraisal and preparing particulars

Implementing the disposal - methods of sale and legal requirements.

Acquisition of property - CoI, client communication and progressing purchases.

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3
Q

RICS UK Residential RE Agency Professional Statement 2017

A

The purpose is to provide a code for resi estate agency

covers

marketing,
Before an instruction,
ethics,
acting for vendor, purchaser, LL
etc.

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4
Q

Estate Agency Act 1979

Application?

A

disposal or acquisition of an interest in land

freehold property

leasehold property with a capital value

land as well as buildings

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5
Q

Estate Agency Act 1979

Principles of the Act

(7)

A
  1. clarity as to the terms of the agency (s18)
  2. honesty and accuracy
  3. agreement and liability for costs
  4. openness regarding personal interests (s21)
  5. absence of discrimination
  6. legal obligation to tell the client about offers received.
  7. keep clients money separate.
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6
Q

Estate Agency Act 1979

important points in the Act

A
  • specify all costs and fees in advance in writing ToB (s18)
  • Itemise all payments - no global budget allowed
  • specify nature of agency and selling rights to be agreed
    -> sole selling rights or sole agency rights
    -> sole, joint agency, multiple agency.
  • advise clients of any services available to applicant ie. financial advise.
  • disclose any personal interest - connected persons
  • misrepresentation of offers/interest - you can only tell the truth
  • handling clients money- following RICS rules
  • procedure to follow when offers are received promptly and in writing.
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7
Q

Estate Agency Act 1979

Who is the Act policed by?

A

National Trading Standards Estate Agency & Leasing Agency Team (NTSEAT)

who works closely with local authorities to protect consumers and business by enforcing the Estate Agency Act and the Tenant Fees Act 2019

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8
Q

Estate Agency Act 1979

What are the penalties

A

negative licencing - the right to be an estate agent can be taken away and not granted

the act allows for prohibition or warning order to be made against an agent

  • stops an agent practising.
  • warning order less punitive - gives an agent a written warning not to undertake the action again
  • usually only issue 10-12 orders each year
  • can be against an individual or a practise and costs can also be awarded.
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9
Q

Estate Agents (Provision of Information) Regulations 1991

What do these regulations relate to?

A

These regulations relate to the provision of information which should be supplied to the client

this information must provide information in writing regarding:

  • the service to be provided
  • remuneration
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10
Q

what is a ‘cooling off’ period

A

is up to 14 days allowed for the client to change their minds and do not want to instruct the agent in accordance with current protection regulation.

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11
Q

consumer protection and unfair trading regulations (2008)

what does it relate to?

A

business to consumer

offer broader, non specific, consumer protection for estate agents.

Principle based with wider definitions.

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12
Q

consumer protection and unfair trading regulations (2008)

who does it relate to?

A

relate to potential buyers, vendors and extend the duty owed to not just clients but to potential clients, viewers, buyers and actual buyers to give accurate and necessary information and not to make any Misdescriptions in material.

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13
Q

consumer protection and unfair trading regulations (2008)

CPRS prohibit what…

and what to unfair practises include

A

prohibit unfair business to consumer commercial practises.

misrepresentation
misleading information
false information
hiding/failing to provide information
exerting undue pressure,
failing to show professional dillegence

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14
Q

consumer protection and unfair trading regulations (2008)

who is it policed by?

and what are the penalties?

A

Trading Standards Office of the local authority

maximum penalty for breach of CPRs and BPRs (business protection regulations)
is unlimited fine and or prohibition order
compensation may also have to be paid to the complainant up to £25,000

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15
Q

consumer protection and unfair trading regulations (2008)

key facts include:

A
  1. Regulations apply to all lettings and sales
  2. Agents have a duty of care to clients and to all interested clients
  3. agents must declare everything known about a property - good and bad
  4. agents must not exert undue pressure on potential buyers
  5. if some information is discovered during the agency process, this information must be passed on to all interested parties.
  6. any omissions can also lead to a breach of regulation
  7. full DD is required for all new instructions
  8. must be validated by the client
  9. policed by the Trading Standards Office
  10. Disclaimers do not apply to this criminal offence.
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16
Q

Business Protection from the Misleading Marketing Regulations, 2008 (BPS)

A
  • business protection regulations relate to business to business activities and mirror CPRs
  • the regulations prohibit misleading business to business advertising.
  • they impose restrictions on how business compare their products to products from other companies.
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17
Q

Caveat Emptor

A

’ let the buyer beware’

the starting point when discussing who has responsibility for the disclosure of information.

this overriding common law principle means that the buyer should satisfy itself on all matters relating to the property

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18
Q

consumer rights act 2015

tell me about it?

A

the Act amends the existing consumer protection law and gives consumers new rights and remedies.

Consolidates existing law relating to unfair terms and contracts between business and consumers.

19
Q

consumer rights act 2015

what do estate agents have to comply with under this act?

A

letting agents must have their charges both in their office and on their website for the letting and management of property.

Information must be provided based on calculation of the charges and who is responsible for payment

if a residential agent holds client money, then the firm is required to also publish a statement as to whether they are a member of client money scheme and details of the scheme.

20
Q

Who policies the Consumer Rights Act 2015, and what are the penalties?

A

Policed by local authority and penalty is up to £5,000 per breach

21
Q

Misrepresentation Act 1967

What does this Act relate to?

A

Act relates to a misrepresentation or false statement of fact made by a party during pre-contractual enquires which has the effect of inducing the party to purchase

22
Q

Misrepresentation Act 1967

under this act can the vendor and/or agent be sued for damages

A

yes,
and/or the contract rescinded

23
Q

Misrepresentation Act 1967

what type of offence is it?

A

civil offence, actionable as tort (not criminal)
form of negligence

misrepresentation can be fraudulent, negligent or innocent

24
Q

Misrepresentation Act 1967

The agent has a duty of care to…

A

check that advice, information or opinion is reliable. ]

25
Q

Misrepresentation Act 1967

how can agents/vendors protect themselves?

A

exclusion/ disclaimer clauses if they are fair and reasonable.

26
Q

Misrepresentation Act 1967

name a relevant case?

and what is it to do with?

A

Hedley Bryne & Co Ltd v Heller & Partners (1964)

relates to negligent statements

refers to test of reasonableness (also under Unfair Contracts Terms Act 1977)

27
Q

Misrepresentation Act 1967

Hedley Bryne & Co Ltd v Heller & Partners (1964)

this case created THREE TESTS to decide agents liability for negligent statements

What are they?

and what does this apply to?

A
  1. FORESEABILITY - the damage is reasonably foreseeable
  2. PROXIMITY - the relationship can be characterised in law as being sufficiently proximate
  3. FAIRNESS - it is regarded as fair, just and reasonable for such a duty of care to arise.

applies to professional opinions and third-party advice.

court held that no duty of care was owed by the bank to the plaintiff relying on advice as to the customers creditworthiness, because there was no special relationship involving the undertaking of responsibility.

28
Q

Tenant Fees Act 2019

what does the Act aim to do?

and who polices it?

A

aims to have more transparency and affordability in the resi letting market.

bans various fess often charged to tenants on new lettings.

refundable tenants deposits must be capped at 5 weeks rent if the annual rent is less than £50,000. (6 weeks of rent if above)

policed by NTSEAT

29
Q

Regulation of Property Agents (RoPA)

what is this proposed legislation?

And the key aims of it?

What does it mean for estate agents?

A

applies to estate agents across the UK

Gov report published in 2019.

All agencies need to abide by a code of practice.

Agencies will be regulated by a independent regulator, with mandatory qualifications for agents.

All qualifying agents will have to be licensed

aim is for transparency regarding charges, disclosing CoI, administration of SC

A new regulator would be responsible for redress schemes, and client money protection schemes

No date has been announced for this legislation.

30
Q

what is the legislation that relates to Marketing Signage?

A

Town & Country Planning (control of advertisement) ( England) Regulations 2007

31
Q

In what circumstances do you need planning consent for marketing boards?

A

for non residential buildings the board is over 2 sqm (flat) and 2.3 sqm (V board)

only one board per building.

32
Q

what size marketing boards are you allowed for resi buildings?

A

max size 0.5 sqm (flat)

max 0.6 sqm (V board)

33
Q

marketing boards should NOT project more than _____ meters from the face of the building

and NOT ABOVE _______ meters from ground in a safe condition

A

1 meter

4.6 meters

34
Q

what other types of marketing signage do you require planning consent for?

and whos it policed by?

A

Illuminated boards,
remote boards,
boards erected on listed buildings and in conservation areas
14 days after transaction completed the board must be removed
certain local authorities are more restrictive such as london boroughs
must have owners approval

policed by LPA local planning authority who can remove boards and issue fines.

35
Q

how long can you leave a marketing board up for with out planning consent?

A

14 days after transaction completed the board must be removed

36
Q

Consider all types of VAT relating to agency work

SPECILIST ADVICE IS ALWAYS RECONMENDED - VAT

name some occupiers who cannot register for VAT

A

medical practitioners,
charities,
financial institutions

37
Q

A landlord can choose to elect a property to charge VAT, to recover VAT on costs expended

In this case, what happens and who does this implicate?

A

when this happens rent (and SC) is charged SUBJECT TO VAT

occupiers who cannot be VAT registered

38
Q

Transfer of ongoing concern (TOGC) purchases are not treated as a supply of goods or services for VAT purposes.

This can reduce the liability of VAT

give an example?

A

in the sale of a property let to a tenant

if the property is registered for VAT, it may be possible not to charge VAT on the sale.

39
Q

what are capital allowances?

A

important form of tax relief upon capital expenditure for the construction or purchase of commercial property or business assets.

They can generate substantial tax savings/ relief on the value of plant and machinery fixtures (eg lifts, AC)

the allowances can offset taxable profit.

specialist advice is ALWAYS NEEDED

the Finance Act 2019, includes significant changes including Enhanced Capital Allowance Structures and Building Allowance, and the Annual Investment Allowance.

40
Q

Land Registration Act 2002

What does this Act provide?

A

framework for electronic property conveyancing, by allowing formal documents to be executed electronically.

the Land Registry is aiming to achieve comprehensive registration of all property and Land by 2030

41
Q

Land Registration Act 2002

Under this Act, what titles need to be registered with Land Registry?

A

All FH and New Leases granted for terms OVER 7 years or existing Leases or assigned with 7 years left till expiry MUST
be registered with Land registry with a compliant lease plan

42
Q

Land Registration Act 2002

What did this Act introduce?

A

new regime for ADVERSE POSSESION making a claimant prove 10 years of use.

43
Q

Land Registry

All FH Transactions must have a compliant plan with 7 details

What are they?

A
  1. drawn to a metric scale (normally 1:100 / 1:200 )
  2. have a scale measurement bar
  3. have scale noted on the plan
  4. include a 1:250 scale location map (for urban areas)
  5. full address incl. postcode
  6. a north point
  7. demise in a red outlined on the inside edge of the property.
44
Q

RICS PS: Code of Leasing Business Premises, 2020

what is it?

Whats covered in it?

What does it enable?

A

improve transparency and fairness in the negotiation of commercial leases.

Mandatory requirements
* It introduces mandatory requirements for RICS members and regulated firms to provide
written heads of terms.
* It provides assurance and clarity for occupiers and is in keeping with our public service
remit.
* It promotes a less adversarial relationship between occupiers and owners and their
advisors.
* It encourages surveyors and lawyers to work more collaboratively.
* It encourages occupiers to take professional advice.

APC (12 decks)

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