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APC JE > Leasing and Letting > Flashcards

Leasing and Letting Flashcards

1
Q

Heads of Term for a Letting? and guidance?

A

RICS Professional Statement Code of Leasing Business Premises 2020 PART 2

Subject to contract

-Rent Quantum, payment dates
- Rent Free
- Rent Reviews
- Services Charge
- Sublet rights
- Start Dates
- Repair obligations
- Address
- Special rights
- VAT
- Term
- Tenant
- Landlord
- Inside of outside the act
- Break Option
- Fit out

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2
Q

Estate Agency Act 1979, two main sections?

A

18 - Whats needed in the terms of business.

21- Personal interest you own part of the building so has to be declared.

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3
Q

What factors do you look for when marketing a unit?

A
  • Repair
  • Maintaince
  • Compliance
  • Services
  • Flexibility of accommodation
  • Presentation
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4
Q

Whats the purpose of the RICS Professional Statement Code of Leasing Business Premises 2020?

A
  • Improve quality and fairness of negotiations of leases
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5
Q

Unit 1 Woodside, whats a tenancy at will and why was this prefered?

A
  • Units attrached starts up
  • Given client more Secuity
  • Paid in arrears
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6
Q

Meavea House, What did you consider?

A
  • That he could operate his business from the rear unit
  • The Implications of that in the market for the unit
  • Lease comps within that industrial estate and
  • Service divide and access.
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7
Q

74 Woodside, whats a Surrender?

A

Negation of the remained of the lease to get an early exit

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8
Q

74 woodside, whats the EPC regulations for commerical property?

A
  • The Energy Preformance of Buildings Regulations 2012

Minimum Energy Efficiency Standards, 2015
- Property’s post the 1st of April 2018 Need EPC of E

  • Energy act 2011
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9
Q

What’s on an EPC? (6)

A
  1. Address
  2. Reference number
  3. Information on the energy provision
  4. Estimation of running costs
  5. RATING
  6. Benchmark info
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10
Q

28 Rodney Street, Why would is devalue the asset as a whole?

A
  • Other units are kept within the traditional design.
  • Goes against the nature of the building.
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11
Q

28 Rodney Street, what are some market incentives?

A
  • Rent free period
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12
Q

Whats a Tenancy at Will?

A
  • Form of licence but by written agreement
  • No renewal rights.
  • allows either party to end the agreement at any time
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13
Q

Licence vs Lease what are the 3 differences?

A
  1. Lease provides an occupier with an estate -License gives them lawful permission of use.
  2. A lease is assigned- a License is normally a personal right that cant be assigned.
  3. Lease cant be terminated until a set point - a License usually can be revoked at any point.
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14
Q

What are the 4 requirements for it to be a lease?

A
  1. Exclusive occupation
  2. Payment of rent
  3. Duration for a specified term
  4. For more then 3 years the terms must be in writing, signed and registered as a deed.
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15
Q

What is the period of time that exclusive possession is granted it is likely to become a lease? and what is the case law?

A
  • 6 Months
  • Street v Mountford (1985) - Set out the differences.
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16
Q

Unit 1 Woodside, Why did you advise a Tenancy at Will?

A
  • Size and condition would only attract start-up business
  • They have poor covenant strength.
  • Gave the client more control following little income.
  • WE DIDNT KNOW A PERIOD of TIME
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17
Q

Meavea House, Did you provide valuation advice?

A

NO
- This was strictly for marketing

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18
Q

What are the Sections in the L&T Act 1954 for New Leases?

A

Section 32-35
- must be market rent
- ignore previous occupation

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19
Q

What is the Section in the L&T Act 1954 for Contracting out the act? and benefits? (5)

A

Section 38a

  • Requirement of the head lease to sublet
  • Landlord wants to reoccupy
  • Redevelop
  • lower rent
  • Flexibility
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20
Q

74 Woodside, What was agreed in the surrender?

A
  • A tenant had another location on the business park
  • They would pay rent until another occupant was sourced.
  • Landlord and tenant both signed a document.
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21
Q

What’s the RICS guidance for Estate Agency? (2)

A
  1. RICS Global Real Estate Agency and Brokerage Professional Statement, 2016
  2. RICS UK Commercial Estate Agency Professional Statement, 2016
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22
Q

RICS UK Commercial Estate Agency Professional Statement, 2016 key principles? (12) ( Think about genral client intercations) (CCCCHIIPTAGD)

A
  1. Honesty
  2. Care
  3. TOB
  4. COI
  5. Do not discriminate
  6. Communcation
  7. Adverting must be honest
  8. Client money is separate account
  9. PII
  10. Clear identification of client
  11. Realistic Guide Figures
  12. Inspections to clients standard
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23
Q

Estate Agents Act?

A

Estate Agency Act 1979

  • Sales
  • Leasing
  • Aqusion
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24
Q

Estate agency act offence and penalties? (4)

A
  • Acting dishonest.
  • Not providing clarity in the TOE
  • Not disclosing personal interest.
  • Not telling the client about other offers received.
  • Warning order
  • Prohibitions order and/or fine.
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25
Q

Estate Agents Act 1979, 7 key principles?

A
  1. Clarity of TOB (section 18)
  2. Honesty
  3. Liability of costs
  4. Personal interests (Section 21)
  5. Discrimination
  6. obligation to client
  7. Clients money
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26
Q

Whats the Cooling off period?

A
  • 14 days
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27
Q

Misrepresentation act offence and penalties?

A
  • Civil offense actionable by tort.
  • Action can be limited by an effective disclaimer clause.
  • Sued for financial damages
  • Contracts rescrinded.
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28
Q

Consumer Protection Regulations?

A
  • 2008
  • Applies during the entire agency and leasing process.
29
Q

RICS Professional Statement Code of Leasing Business Premises 2020?

A
  • 1 September 2020
  • Improves the quality and fairness of negotiating leases
30
Q

RICS Professional Statement Code of Leasing Business Premises 2020 structure 2 key parts?

A

Part 2 - Mandatory requirements
Part 3 - Lease Negotiation

31
Q

Lease factors that effect value? (7)

A
  • length
  • break
  • repair obligation
  • use
  • Security of tenure
  • Rent review
  • inside or outside the L&T act
32
Q

28 Rodney Street, where were the moderation works agreed?

A

In Heads of Term

33
Q

What do you look for in a tenant?

A
  • AML
  • Covenant Strength
  • Guarantors
34
Q

What is a tenancy at will?

A
  • Form of licence by written agreement
  • Unspecified time
  • No Renewal Rights
  • Give Landlord more control
35
Q

Whats a Profits Test?

A
  • 3x Net profit over the last 3 years of the rent.
  • 5x Net asset values must be more than 5x the rent.
36
Q

Guidance on Board marketing?

A
  • Town and country Control of advertisement regulations
37
Q

What are CPSE’s? and the 2 important ones?

A

CPSE 1 – General pre-contract enquiries for all commercial property transactions;
CPSE 2 – Supplemental pre-contract enquiries for properties subject to tenancies for commercial use;
CPSE 3 – Supplemental pre-contract enquiries for commercial property on the grant of a new lease;
CPSE 4 – Supplemental pre-contract enquiries for commercial leasehold property on the assignment of a lease;
CPSE 5 – Enquiries before the surrender of a rack rent commercial lease;
CPSE 6 – Supplemental pre-contract enquiries for properties subject to residential tenancies;
CPSE 7 – General short form pre-contract enquiries for all property transactions.

38
Q

Tenant Selection?

A
  • Rent Dispose or guarantee
  • Bank, accountant trade references
  • Landlord references
  • 3 years audited accounts
39
Q

Whats a Section 25 Notice?

A
  • Bring lease to end
  • Landlord and tenant act 1954?
40
Q

Grounds for S.25? (7)

A

Non-Fault
- Redevelopment
- Intent to occupy
- Alternative place

Fault
- Rents late
- Repair
- Breaches of obligation
- Subletting

41
Q

What makes a lease binding?

A

Rent
Exclusive possession
Term
Signed

42
Q

What leases are outside the act?

A
  • T@W
  • Farming
  • Minerals
  • Subletting
  • Less than 12 Months
43
Q

What’s an Assignment vs Subletting?

A

Assignment
- they take over the lease and rights

Subletting
- Goes through the existing lease holder

44
Q

What should be included in the Heads of Term? Lettings

A

Part 2 Code of Lease Business 2020

  • Address
  • Special Rights
  • Term
  • Renewal and Breaks
  • Deposit or grantors
  • Rent
  • VAT
  • Incentives
  • Service Charge
  • Rent reviews
  • Assigned rights and permitted use
  • Repair Obligations
  • Alterations
  • Conditions
45
Q

What is contracting out the Act mean? and what section is it under?

A

Section 38A L&T act 1954

  • No security of tenure of another lease.
  • must inform the tenants that the lease isnt protected
46
Q

What sections to Terminate a lease in the L&T Act 1954

A

Section 25
6 to12 months notice

47
Q

Whats the procedure to contracting out the act?

A

Landlord Serves notice - to say they arnt protected
Tenant - Must declarer they accept
before lease is signed.

48
Q

What are the key principles under the Commercial Estate Agency Processional Statement 2016? (CCCCHIIPTAGD)

A
  1. Honesty
  2. Care
  3. TOB
  4. COI
  5. Do not discriminate
  6. Communcation
  7. Adverting must be honest
  8. Client money is separate account
  9. PII
  10. Clear identification of client
  11. Realistic Guide Figures
  12. Inspections to clients standard
49
Q

Name an Element from Part 3 of the RICS Guidance of leasing commercial premises?

A
  • Term length
  • Rent reviews
  • Deposits
  • Change of use
  • TItle
50
Q

What should you do if an incoming tenant doesn’t have an agent?

A

Recommend that they look at the Code of Leasing business premises.

51
Q

Did the tenant have to sign anything to be contracted out the act?

A

A declaration that they are aware.

52
Q

Unit 1 Woodside, Why did you advise a Tenancy at Will?

A
  • Size and condition would only attract start-up business
  • They have poor covenant strength.
  • Gave the client more control following little income.
53
Q

Town and country planning (control of advertisement) regulation 2007

A

V- Bored (2.3 sqm)

54
Q

What types of rent reviews are there?

A
  • Upward only
  • CPI
  • Market Rent
55
Q

When doing rent reviews, what factors do you disregard?

A
  • Tenants fittings
  • Goodwill attached to Property
  • Goodwill attached to Tenant
56
Q

What elements are in the TOB for a lease agreement?

A

Fees
Sole selling rights or agency rights
AML
Clint money

57
Q

What’s the guidance for Advertising boards?

A

Town and country planning regulation 2007

58
Q

Size of a advertisement board?

A

2 sqm flat
2.3 sqm V board

59
Q

Sole selling rights?
Sole agency ?

A

Selling rights - You get the fee regardless of who finds the buyer.
Sole agency - Have the agency rights, but don’t get a fee unless you find a buyer.

60
Q

Give me a review of the Liverpool market?

A

2024, has suggest a 12% increase from 2023 with headline rents at £28/sqft

61
Q

RICS License to alteration guidance?

A

RICS Guidance note on Licence to alterations 2013

62
Q

What’s dilapidations?

A

Where the tenant hasn’t reinstated the lease back to its pervious condition

63
Q

Two choices for a tenant at the end of a lease?

A
  1. Conduct work themselves
  2. Tenant can pay a sum to landlord for works.
    Breach + Loss + Evidence = Recovery
64
Q

What is Alienisation? what’s are the two types?

A

Right to sublet or assign the lease

65
Q

What’s assignment?

A

New tenant has relationship with the landlord

66
Q

What’s Subletting?

A

New tenant has relationship with the Tenant

67
Q

Types of Alienation?

A

Open
Qualified - With conditions
or not allowed

68
Q

Why would you sublet over assign?

A
  • For part not the whole
  • Market rent is higher the passing
  • Tenant wants to reoccupied in the future
69
Q

Whats a use clause? and what do you need to change it?

A
  • Permitted use of the property
  • Refer to landlord to change it

APC JE (23 decks)

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