Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

RICS APC > Leasing and letting > Flashcards

Leasing and letting Flashcards

1
Q

What is leasing?

A

Acting on behalf of the tenant to acquire space.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is letting?

A

Acting on behalf of landlord to let out space.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

RICS guidance in this area

A

RICS Professional Statement: Code for Leasing Business Premises 2020

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the purpose of the Code?

A

Improve quality and fairness of negotiation of lease terms and promotes use of new set of comprehensive HOTs to made legal drafting of leases more efficient.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Application of Code

A
  1. Both landlords and tenants.
  2. Replaces non-RICS code from 2007.
  3. Applies to new leases, lease renewals and lease extensions.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How is the Code structured?

A

4 parts;

Part 1 - Introduction
Part 2 - Mandatory requirements
Part 3 - Lease negotiation best practice
Part 4 - Appendices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the mandatory provisions?

A
  1. Negotiations must be approached in constructive and collaborative manner.
  2. Party not represented by RICS member must be informed of the Code and advised to get representation.
  3. Agreement must be written in HOTs and SUBJECT TO CONTRACT.
  4. Negotiations must be fair and balanced - have regard to both sides.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Result of the Code

A
  1. Assists parties in understanding lease and their commitments.
  2. Greater transparency of terms and collaboration.
  3. Draft HOTs template provides consistency.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Process for leasing

A
  1. Define approach
  2. Market research and analysis
  3. Shortlist options and viewings
  4. Decision-making
  5. Negotiation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Process for letting

A
  1. Define approach
  2. Marketing strategy
  3. Branding and marketing
  4. Take enquiries and undertake viewings
  5. Negotiation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a lease?

A

Formal arrangement providing an occupier with an estate in the relevant land i.e. exclusive occupation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Four requirements that constitutes a lease

A
  1. Exclusive occupation.
  2. Payment of rent.
  3. Duration of the specified term.
  4. If more than three years, terms must be in writing, signed and registered as a deed.

L&T act protection.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is a license?

A

Passes no interest in land and provides only a right to enter/use the property.

No L&T act protection.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Differences between a lease and license

A

Lease - exclusive possession
License - personal right to use

Lease - can be assigned
License - can’t as personal right

Lease - cannot be terminated until expiry
License - terminate at any time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Case law setting out differences between a lease and a license

A

Street v Mountford (1985)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are Heads of Terms?

A

Summary of an agreement between two parties, used to instruct lawyers to produce actual lease/ contract.

(Fall away once lease and formal contract signed)

17
Q

L&T Act

A

Landlord and Tenant Act 1954 Part II

Security of tenure for all commercial leases.

18
Q

When do you get protection from Act?

A

Section 23

Must be a business tenancy satisfying 6 basic principles:

  1. Must be a tenancy
  2. Premises must be used for business
  3. Must occupy at least part by tenant
  4. Occupancy for more than 6 months
  5. Must not be an exempt or exclusive tenancy
  6. Must have competent landlord

Automatically protected if satisfied.

19
Q

Section 24

A

Business tenancy under act only ends when party serves a notice.

(Unless leave with full VP on lease expiry)

20
Q

Section 25

A

Landlords notice to grant or oppose a new lease.

To be served within 6-12 months from date specified for a new lease.

21
Q

Section 26

A

Tenants notice to request a new lease.

To be served within 6-12 months from date specified for new lease.

22
Q

Section 27

A

Tenant notice to leave premises.

Only to be served after contractual end date ie if holding over.

3 months notice.

23
Q

Section 30

A

Ground for refusal of a new lease.

7 grounds - a to g

Persistent delay in paying rent.
Redevelopment.
Landlord wants to occupy.

24
Q

Section 38A

A

Contracting outside the Act.

Reasons to contract out:
1. Landlord may want to reoccupy/ redevelop in the near future.
2. Landlord wants more flexibility.

25
Q

What are the 2 types of contracting out declarations

A

Simple declaration -
Served by Landlord/ must have 14 days or more until lease. commencement

Statutory declaration -
Served by solicitor to tenant, outlining what going to lose from contracting out.
Quicker and if less than 14 days to go.

26
Q

What are the security measures to protect the investment from taking on the tenant?

A
  1. Rent deposit
  2. Rental guarantee (e.g. parent company)
27
Q

What do you request from a tenant to confirm their covenant/ financial performance before letting?

A
  1. Bank, accountant and 2 trade refs
  2. Pervious landlord reference
  3. 3 years audited accounts
28
Q

Lease terms affecting value

A
  • Lease length
  • Break clauses
  • Alienation
  • Repairing obligations
  • User clauses
  • Rent review pattern
  • L&T Act Protection
29
Q

Items in heads of terms (L&L)

A

SUBJECT TO CONTRACT

  • Landlord details
  • Tenant details
  • Demise
  • Lease term
  • Break
  • Rent
  • Incentives
  • Service charge
  • VAT
  • Business Rates
  • Alienation
  • Alterations
  • Use
  • Agreement for lease (sign at earliest opportunity)
  • Signage
  • Timescale
  • AML
  • Conditions

RICS APC (18 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions