L1 LL Tenant and Manager roles and relationships

Question 1

What are the important forms of negotiation?

Answer 1

o Conduct
o Subject to contract
o Without prejudice

Question 2

How is Conduct used during negotiations?

Answer 2

Obtain settlement of lease renewal with appropriate terms avoiding uncertainty and cost of a DR process

Successful negotiations should leave both parties achieving a fair settlement and the relationship = maintained

Professional advisers may be acting as agents for their clients, seeking to obtain most favourable settlement for their client

Question 3

What is subject to contract?

Answer 3

Expression = widely misused within negotiations

An offer made subject to contract = made subject to other terms and conditions being agreed

An offer made subject to contact = not made without prejudice unless there is a clear indication that the offer carries this protection

Question 4

What is without prejudice?

Answer 4

In effort to reach negotiated settlement, offers and concessions = made without prejudice to surveyor’s right to withdraw those offers and concessions during any third-party proceedings

Offer made on a ‘without prejudice’ basis may not be referred to by either party in those proceedings

Correspondence marked with ‘without prejudice’ to be clear

Question 5

What should the property manager do to maintain the relationship with the landlord?

Answer 5

Critical that the property manager seeks to:

• develop a positive relationship with landlord
• understands the landlord’s objectives and approach
• establishes a format and frequency for reporting
• in BTR, understand their business proposition and service offering to the market

Question 6

What can the property manager do to ensure a good relationship with the tenant?

Answer 6

Ensure occupiers know who the property manager is and how to contact them

Seek regular contact with each occupier

Provide emergency contact details for out of hours incidents e.g. a helpdesk facility / in house operation

Comply with communication and consultation provisions in RICS CoP, Service charge residential management code (2016)

System in place to ensure leases = dealt with properly and efficiently, making recommendations to the landlord, ensuring compliancy with LTAs

Act within appropriate time limits when responding to a tenant’s application, as this can be used in Court

Question 7

How can a landlord ensure effective communication?

Answer 7

Ascertain what landlord and tenant want out of the deal

Be straightforward, be clear; if a complaint /request is made, reflect back to check your understanding of issue, always take notes and confirm in writing to other party

Keep in touch; if account manager = assigned the property to manage, ensure they are primary contact for landlord and tenant. This builds trust and good relationships.

Question 8

What are the characteristics of a good agent?

Answer 8

 diplomatic;
 calm;
 organised;
 personable;
 empathetic; and
 transparent

Question 9

During pre-tenancy negotiation, what measures should be check / put in place?

Answer 9

Ensure agent = competent and a member of an approved regulatory body to adequately protect and act for owner’s best interests

Agents should act in accordance with the Consumer Protection from Unfair Trading Regulations 2008 to ensure the agent does not fall foul of the law

Agent should establish relationship with the tenant to weed out the respectful, communicative tenants from the downright dishonest and unreliable

Question 10

What are the different types of landlord?

Answer 10

Absentee landlord - ‘hands-off’ approach, may develop unemotional view and expect monthly rental income

Overseas landlord - need to be aware of HMRC’s non-resident landlord tax regime as rent may be tax deductible

Inexperienced / first-time landlord – may be naïve

Professional landlord = 1/more individuals / company – 2 types;

• Hands-on = effective management strategy
• Hands-off = distant / may appoint asset manager

Question 11

What are the different types of tenant?

Answer 11

o Sharers and changing tenants
o Licensees of companies
o Single household tenants
o Passionate or indifferent tenants

Question 12

What should you consider with sharers and changing tenants?

Answer 12

Before agreeing to multiple occupants, check to see if subject to additional licensing

If a property is let out by room with communal facilities, each room = individual tenancy agreement

Up to agent to manage these tenants if conflicts arise (e.g. dirty dishes, anti-social behaviour etc)

Sharers on joint tenancies - commonly students / group of friends. All named persons = jointly and severally liable clause?

Officially will be one Lead Tenant

Change of tenant - common practice = Deed of Assignment to assign rights and responsibilities to new tenant(s)

Guarantors - entirely up to agent and landlord if they wish to seek a guarantor

Question 13

What should you consider with Licensees of companies?

Answer 13

Landlord’s relationship will be with the company / tenant’s representative agent

Landlord should be aware the licensee may not be authorised by their employer to deal with legal and contractual matters

Possibility company may go into liquidation / administration - may need to make application to Companies House / a court to ensure performance of agreement /a formal deed of surrender to end tenancy

Question 14

What should you consider with Single household tenants? (RESIDENTIAL)

Answer 14

Where tenants = in one house, landlord-tenant relationship = likely to be more personal than with other types of tenancy

Question 15

What should you consider with Passionate or indifferent tenants? (RESIDENTIAL)

Answer 15

Passionate tenants - emotional tenant may be more demanding and could be endless list of demands. Landlord needs to establish limits of their obligations, otherwise resources may become exhausted

Indifferent tenants – may be less demanding but relationship = affected if indifference leads to
missing / tardy rent payments / failing to report maintenance matters

Question 16

How can the landlord / agent set expectations via the tenancy agreement? (RESIDENTIAL)

Answer 16

Should state;

• Rent due date and method of payment (BACS /cash)
• Start and end date of the tenancy
• Tenant’s rights to have notice before entry
• Landlord’s rights to carry out repairs
• Any additional non-standard clauses i.e allowing pets

Question 17

How can the landlord / agent set expectations via ongoing communication? (RESIDENTIAL)

Answer 17

Ongoing communication - regarding;

• inspections;
• end of tenancy protocol;
• issues arising from terms of tenancy e.g. antisocial behaviour, contravening any clauses, etc;
• repairs / maintenance updates

Question 18

What should be considered with repairs?

Answer 18

October 2015 - government introducedDeregulation Act 2015preventing landlords from issuing s21 notice if there are reported outstanding repairs on property

Therefore, is important to document and be proactive if property has issues requiring attention

Reference to LTA 1985 SECTION 2

Question 19

How can repairs be reported?

Answer 19

Have method for tenant to report repairs, including how to report out-of- hours emergencies

Advise tenants on what = emergency, how repair issues = categorised and max estimated attendance / repair time

To try minimise reactive repairs, provide tenants with property manual / handbook to include details of:

• how to report repair issues
• things to check if a fault is suspected
• what info to provide when fault = reported; e.g. serial numbers / photographs
• what is classed an emergency
• what to do in event of emergency
• what to do if they smell gas; etc.

Produce a repair prioritisation tool / matrix – low – urgent in terms of severity and response time, description etc.

Can be proactive in maintenance via periodic and regular maintenance checks

Question 20

What is a property manager?

Answer 20

company or individual employed to manage an interest in real estate on behalf of the owner of the interest.

Question 21

What about the relationship between the property manager and the landlord?

Answer 21

The relationship between manager and client will be based on terms of engagement or a contract, which will determine the rights and duties of both parties