Leasing and Letting Flashcards
What are the different types of leasehold transactions that can be transacted?
Lease, Licence (typical length 1 year) , Subletting, Assignment
What is an Authorised Guarantee Agreement (AGA)?
“Where you are trying to assign a lease, transferring all liability to the new tenant, but the Landlord insists that you remain liable should the new T default
if you were to assign (i.e. sell the lease) to another retailer, a guarantee would be put in place between Shiro and the landlord which in effect will say that if the new tenant can no longer afford to pay the rent, Shiro will be liable. If we can effect a surrender, i.e. terminate the lease then no such requirement exists.”
What are the different types of agency ?
”* Multiple / joint agency - Person who finds the tenant gets the fee
- Joint Sole Agency - Split fee no matter who finds the tenant
- Sole selling - You get the fee even if you, the LL, or the other agency intros the property or if you decided not to pursue the deal”
What are the key points of the Estate Agents Act 1979? [THC CD OS]
“THC CD OS - [Terms, Honesty, Costs Conflicts, Discrimination Offers, Separate]
- Clarity on terms of agency (s.18)
- Honesty and accuracy
- Agreement and liability for costs
- Openness of personal conflicts (s.21)
- No discrimination
- Obligation to tell clients all offers
- Keep clients money separate
“
What are the types of Misrepresentation?
”* Fraudulent Misrepresentation – when you are consciously giving fraudulent/false information
* Negligent Misrepresentation – when you carelessly give false information and no evidence that you believed it was true
* Innocent Misrepresentation – when you give misleading information which at the time believed was true
“
What should an agency instruction engagement letter set out?
“Agency instruction engagement letter should include:
- the main points of contact
- fees payable and breakdowns e.g one-off cost for workshops, 15% of headline rent for unit let
- scope of services – researching market comparables, advising on ERV and quoting rent, undertaking viewings, negotiating on behalf of landlords,
- basis of appointment – sole agency, joint sole agency, multiple agency
- C&W’s complaint handling procedure
“
What was within the scope of services for a typical agency job? What was in the List?
“Type of work, type of agency
Timetable
Undertaking a market search of properties
Collating details
Arranging inspections
scope of services - collecting details, negotiating, giving legal advice details
excluded - making local authority enquiries/ history of property / contention “
Could you give an example of how you adhere to the RICS Professional Statement on UK Commercial Real Estate Agency?
”- Act in a fair honest and professional manner
- Before any job get signed ToE
- Ensure there are no conflicts “
What happens between signing of heads of terms and the completion of a lease?
“After Signed HoTs, both parties instruct Solicitors where both parties will negotiate on the draft lease.
After back and forth of draft lease, engrossments will be issues (final version of the lease)
Both parties sign lease
”
What is within leasing heads of terms?
”- Name and contact details of landlord, agents and representative solicitors
- Demise
- Length of term
- Rent agreed
- Rent review provisions
- Inside or outside the Act
- Break options
- Incentives
- Service charge
- Permitted use
- Repairs and alterations
- Alienation
“
Are heads of terms legally binding?
Dependents if there is a statement on subject to contract then it is not legally binding
How do you comply with the code of leasing business premises?
use code for mandatory heads of terms, if other party not aware of code should be made aware
1st edition February 2020
What would you do if a prospective tenant was unrepresented and you were acting for the landlord?
Advise them to get representation inline with the RICS Professional Statement - Code of Leasing Business Premises 2020
If there was a mistake on particulars what would you do?
”- Correct immediately
- Update website
- Re issued to anyone you have sent to “
What is the difference between an Arbitrator and an Independent Expert?
“Arbitrator
* Acts on evidence provided
* Limited right to appeal
* Not liable for negligence and can’t be sued
* Acts within a formal statutory framework (Arbitration Act 1996)
* Outcome is an award
* Power over all costs e.g. parties, surveyor
RICS Guidance Notes
* Surveyors acting as arbitrators in commercial property rent reviews, 2013 “
Independent Expert
-Can own knowledge and expertise plus have a duty to investigate.
-No right to appeal
-Is liable for damages because of negligence
-No relevant legislation as acts with in informal procedural timetable
-Outcome is a determination
-Power over their own costs
-Independent Expert determination 2016 is legislation.
