Leasing and Letting Flashcards
How did you undertake a conflict of interest check on your Lease Renewal in Birmingham?
I asked the other members of the firm all via blanket email if they were aware of any conflicts.
Name a way you could identify a conflict of interest
- Database checks
- advisory emails to staff to enquire about individual involvement
- Existing record searches
What are some of the current insights you understand from the UK industrial market recently.
Existing mid box take-up seems to be doing well with units under 100K finding the most traction.
Rents are strong.
Occupiers seem to be more decisive when it comes to taking units than the end of 2024.
What is the prime industrial rent for a new build unit in Birmingham (100k sq ft)
£12.00psf
Prime Zone A rent for retail in Birmingham?
£45-£50 psf Zone A
Why do landlords offer rent free periods to tenants?
For fit out purposes
An an incentive for the letting.
To be more competitive with competition.
What are the minimum requirements for a brochure?
Disclaimer from Misrepresentation act 1967
What are the types of different agency basis?
Sole agency - Joint agency - sole joint agency - multiple agency
When do you require planning permission for a marketing board.
When the board is larger than 2sqm
What are the requirements of Estate Agency Act 1979
Set fees
client approval
VAT in quotes
additional charges
What does the act also require?
The Act requires estate agents to declare any personal interest in a transaction and the services provided to the other party.
What items do you include on a Heads of Terms?
Date
Parties involved
Rent
Term
Address
Use class
Incentives
Break date
What details needed to be updated on the retail unit you let in Tamworth?
Pictures
Description
Lease surrendered so tenant fit out remained.
How can you ensure a lease has been executed as final?
Signed by both parties.
Did you only give your recommendation based on tenants reliability over previous 15 years?
Tenant willing to move quicker regarding the letting
Tenant had never fallen into arrears or missed rental payment.
What is the Code for Leasing Business Premises 2007?
An RICS Professional Standard
What are the objectives?
Improve the quality and fairness of negotiations.
Promote the use of a new set of comprehensive Heads of Terms.
What is an AST?
An Assured Shorthold Tenancy
What does it mean?
A tenancy agreement that allows a Landlord to let out a property whilst also retaining the right to repossess at the end of the term.
Who does an AST protect? How?
Both parties. Outlines the terms of a tenancy including
start and end date
rent
responsibilities of each party
What are the key features of an AST?
Written agreement (Not necessarily required)
Deposit
Landlord responsibilities
Tenant responsibilities
What is an EPC
Energy Performance Certificate - Assesses the properties energy efficiency.
What are the new EPC requirements
As of April 2020 Landlords must ensure properties have an EPC of E or higher.
How did you outline your opinion of rental value to the Client?
Hierarchy of evidence. Paid most weight to category A evidence (Open market lettings of comparable properties im similar locations)
What is the hierarchy of evidence
Ranks the evidence to be used from most important to lease important. Starting with open market lettings.
What forms an acceptable offer other than rents what are you looking for / what is important?
A) Tenant covenant
B) Nature of business / desired use. Is that compatible with the clients view of the estate.
C) Desired occupation length
What did you do after heads of terms was agreed.
I instructed solicitors and monitored the transaction until completion making sure to keep my client informed of the progress along the way.
What does the Misrepresentation Act, 1967 outline
The Act deals with situations where someone makes a false statement of fact (a misrepresentation) before a contract is entered into, which induces the other party to enter the contract.
What is the RICS UK Commercial Estate Agency Professional Statement, 2016.
Provides a mandatory framework by which RICS registered estate agents should abide in order to achieve best practice.
Are heads of terms legally binding?
No
What is the difference between exchange and completion?
Exchange is when a sale becomes legally binding
Completion is when a buyer takes possession of the property.
What is the new professional standard related to agency?
THE RICS Professional Standard: Property agency and management principles, 2024
This professional standard is related to the different agency and management disciplines in the property sector. The 2 main areas covered in the publication are working with clients and managing businesses and staff.
What is included or required to be shown in an occupiers accounts?
Balance sheet
Operating profit
Turnover
Gross Profit
What are the documents being consolidated into?
- Global property agency and management prof standard 2. UK property agency prof standard 3. UK prop man prof process.
What is the legislation relating to agency?
Estate agents act.
Misrepresentation act
What’s the difference between sole selling and sole agency rights?
Sole agent only entitled to a fee if they find or introduce an occupier.
Sole seller entitled to a fee even if client finds occupier themself.
What are the core principles of the RICS code of leasing business premises?
To improve the quality and fairness of negotiations on lease terms.
Promote the issue of comprehensive Heads of Terms to make the legal drafting process more efficient.
How might an agent misrepresent in a transaction?
By providing inaccurate or misleading information
Failing to disclose important information.
Making false statements to get a tenant to enter into a tenancy agreement.
What factors can affect rental value?
Use
Inside or outside L+T act
Age
Location
Specification
Terms
Why was 10-years deemed a suitable lease term?
This is the market expectation for a unit of this size.
How would your advice differ for a different length term?
For a short term may have a higher premium.
Less rent free.
Smaller deposit.
Advise that a longer term is more suitable.
What did you include within the Terms of Engagement?
Agency basis
Marketing budget
Scope of works
Name of client
Name of agent
Date
Address
Fee basis
Would you complete a Red Book valuation for an agency instruction?
No. Agency is not under the Red Book.
If costs were not under consideration, what other marketing initiatives would you recommend to your client?
Professional brochure
Marketing boards
You recommended a tenant from another unit to move into unit 1, why? Did you consider the void it would make on that unit?
Unit 1 was larger and would obtain more rent PA.
Smaller unit could be re-let, aware of other interest.
Gives opportunity to improve landlords investment value by raising the rent on that vacant unit.
What is the rent free expectation for a unit of 30-50k for a 10 year term
10-12 months or 1 month for every year term certain.
What are the reprocususions of misrepresentation?
Taken to court.
Reported to RICS
Sued for value of money lost.
Contracts taken.
Name some factors that affect value?
lease length
break clauses
alienation
repair obligations
user clauses
RR provision
security of tenure provision
impact of a restrictive lease clause
planning
What do the Dun and Bradstreet rating show
The rating is made of 2 parts:
- Financial Strength
- Risk Indicator
What is the expected rent for a Grade A unit in Northampton?
£14-£16
What is a profit test
3 years accounts.
Profit must be 3 times the annual rent of the property.
Other security for a landlord other than a deposit
Bank guarantee
Guarantor
What is a profit and loss account?
A summary of the business income and expenditure transactions, usually on an annual basis
What should be attached to the lease agreement?
License for alterations
Specification and plans
Warranties if FRI
Statutory declaration if outside the act
At what size do boards require planning?
2sqm
What are the 3 tests for misrepresentation
- Forseeability
- Proximity
- Fairness
What are 3 common causes of defects in industrial properties?
Roof leaks around lights
Cut edge corrosion
Damaged cladding panels
What legislation covers contamination?
Environmental protection act 1990
What use is a Trampoline Park
D2 - Assembly and leisure
What is required to change planning?
Identify current use class
Submit planning application to change the use
What is the Misrepresentation Act?
It is an act that details the type of misrepresentation and the remedies for when a contract is entered into based on a misrepresentation
What are the key principles of the Estate agency act
When does the estates agent act apply?
What are the Consumer Protection Regulations 2008 (CPRs)
Regulations that protect consumers from unfair or misleading trading practices.
What are the obligations of the CPR
The obligation is to trade fairly and honestly
