Leasing and Letting Flashcards
What does the Landlord & Tenant Act 1954 govern?
It governs security of tenure and lease renewals.
What does the Landlord & Tenant (Covenants) Act 1995 regulate?
It regulates lease assignments and liabilities.
What is the purpose of the Estate Agents Act 1979?
It regulates estate agency practice and conduct.
What do the Consumer Protection from Unfair Trading Regulations 2008 prohibit?
They prohibit misleading property marketing.
What do the MEES Regulations prevent?
They prevent leasing of F or G rated properties.
What does the Estate Agents Act 1979 regulate?
It regulates estate agents dealing with residential property transactions.
What are the six key principles of the Estate Agents Act 1979?
- Duty to disclose interests.
- No discrimination between buyers.
- Transparency in fees and services.
- Obligation to pass on all offers.
- Duty to disclose connected persons.
- Handling client money properly.
How does Section 18 of LTA 1927 relate to your letting practice?
It caps dilapidations claims to the actual impact on property value.
What are the various agency bases?
- Sole agency – One agent, client can find own tenant.
- Sole selling rights – Only the agent can let the property.
- Joint agency – Two agents share responsibility.
- Multiple agency – Several agents market the property.
Where are agency bases defined?
They are defined in the Estate Agents Act 1979 and agency agreements.
What is a ready, willing, and able purchaser?
A buyer who meets the price and conditions set by the seller.
How does Section 21 relate to your letting practice?
It allows landlords to serve notice to regain possession of residential property.
What are the key points of the Consumer Protection / Business Protection Regulations?
They require truthful marketing, no misleading or omission of material information.
What are considered unfair practices under this legislation?
False advertising, misleading statements, aggressive sales tactics.
How does the Misrepresentation Act 1967 relate to your agency practice?
It holds liability for false statements in property marketing.
What does the Unfair Contract Terms Act 1977 say?
It prohibits unfair or unreasonable lease terms.
Do you need to inform your client if you offer a service to a prospective tenant?
Yes, under the Estate Agents Act 1979 and transparency regulations.
What is the Code for Leasing Business Premises in England & Wales?
It provides best practice guidance ensuring fair lease negotiations.
When was the Code last updated?
It was last updated in 2020, making it a RICS Professional Statement (mandatory for RICS members).
What are the key principles of the RICS Professional Standard: Property Agency and Management?
- Act fairly and transparently.
- Ensure clients receive clear advice.
- Follow ethical and regulatory requirements.
What are three key issues raised in the RICS Real Estate Agency and Brokerage Standards?
- Conflicts of interest must be avoided or managed transparently.
- Client money protection must be in place.
- Marketing must not be misleading.
What is alienation?
It is the transfer of a lease via assignment or subletting.
What happens if there is no alienation clause in a lease?
The tenant cannot assign or sublet without the landlord’s consent.
What is subletting?
It is when a tenant grants a new lease to another party for part or all of the premises.
What is assignment?
It is the transfer of an entire lease to a new tenant.
How does the Landlord & Tenant (Covenants) Act 1995 affect your leasing work?
Original tenants are released from liability after assignment.
What does S19(1A) of the Act say?
Landlords can impose reasonable conditions on lease assignment.
What is an Authorised Guarantee Agreement (AGA)?
It is when the outgoing tenant guarantees the assignee’s obligations.
Can a tenant assign a lease to its guarantor?
No, it is prohibited under LTCA 1995.
What is a pre-letting?
It is when a lease is agreed before property completion.
What is an Agreement for Lease?
It is a binding agreement to enter a lease in the future, used for pre-lets and development leases.
What is a collateral warranty?
It is a guarantee from a contractor/professional to a third party (e.g., tenant).
What planning considerations are there for installing a marketing board?
Class 3 consent under Town and Country Planning (Control of Advertisements) Regulations.
Do you need planning consent to install a marketing board?
Not if within size restrictions and displayed for ≤3 months.
What is required surrounding letting property and EPCs?
An EPC is required before marketing and must be E or above (MEES).
What buildings are exempt from having an EPC?
Listed buildings, places of worship, temporary structures.
Can you charge a tenant for a copy of an EPC?
No, it must be provided free of charge.
Where does the EPC have to be shown?
On marketing materials and available upon request.
How long do you have to produce the EPC after a property is put on the market?
Within 7 days.
How does MEES affect your leasing practice?
It prohibits letting sub-standard properties (F or G rated).
What are the key compliance dates for MEES?
April 2018 – MEES applied to new leases.
April 2023 – MEES applied to existing leases.
How can MEES risk be reduced?
Through energy efficiency upgrades (LED lighting, insulation, HVAC improvements).
What would you do if asked to let an F or G rated property?
Advise on energy improvements before letting.
How can you improve an EPC rating?
By improving insulation, energy-efficient heating, and using LED lighting.
How does VAT affect lettings?
Landlords may opt to tax, making rents VAT-chargeable.
What type of operator might be affected by a rent subject to VAT?
Charities and VAT-exempt businesses (higher costs).
What is contracting out a lease?
It removes security of tenure under LTA 1954.
What must a tenant receive when contracting out a lease?
A warning notice and must sign a declaration before lease completion.
What do planning use classes define?
They define property uses (e.g., Class E – commercial, Class C3 – residential).
How do you assess tenant covenant strength?
By checking financial statements, credit rating, and references.
What security might you request based on tenant covenant strength?
Rent deposits, guarantors, or parent company guarantees.
What money laundering checks do you undertake during agency work?
ID verification, source of funds checks, enhanced due diligence for high-risk clients.
What is the profits test?
It assesses tenant affordability (Net Profit ≥ 2.5x annual rent).
How might you include a pandemic rent suspension clause in a new leasing deal?
The clause would suspend rent payments or switch to a turnover rent if government restrictions prevent business operation.
What issues might you face when agreeing a pandemic rent suspension clause?
Landlord resistance, negotiation difficulties, lender restrictions, defining trigger events, and impact on valuation.
What factor impacts letting value/lease terms?
Tenant covenant strength may result in a shorter lease term, higher deposit, or personal guarantee requirement.
What is an example of providing marketing/leasing strategy to a client?
Advised on a retail unit marketing campaign by assessing market demand and target occupiers.
What steps did you take to let a property?
- Prepared marketing particulars.
- Targeted potential tenants and conducted viewings.
- Negotiated lease terms.
- Completed due diligence.
What was the reason for the void in Unit 23 - Trancio?
The previous tenant vacated due to a break clause being exercised.
What key elements did you consider when inspecting Unit 23 - Trancio?
Repair condition, EPC rating, signage potential, layout, services, and compliance with planning use.
How do NIA and ITZA differ?
NIA is usable space within unit boundaries, while ITZA adjusts retail space based on frontage depth.
Why show both NIA and ITZA?
ITZA allows direct rental comparisons for valuation.
What type of tenants might be attracted to Unit 23 - Trancio?
Independent retailers, takeaway food businesses, boutique shops.
What other information was included in the particulars for Unit 23 - Trancio?
Rent, lease terms, service charge, EPC, business rates, planning use, floor area, and key features.
Why did you conduct a credit check for Unit 23 - Trancio?
To assess the tenant’s financial stability and ability to meet rent payments.
What else was included in your due diligence for Unit 23 - Trancio?
AML checks, company accounts, previous landlord references, business model review.
What made the location of Unit 29 - Victoria Centre unfavourable?
Lower footfall area, poor visibility from main pedestrian routes, limited parking nearby.
What was the marketing strategy for Unit 29 - Victoria Centre?
Targeted online advertising, local agent collaboration, and signage on site.
Why is it important to adhere to RICS standards and anti-money laundering regulations?
It ensures fair dealing, reduces risk of legal disputes, and prevents financial crime.
Why did you recommend a lease surrender of the smaller unit 23 for trancio?
To allow the tenant to consolidate operations into the larger Unit 19, reduce overheads, and improve customer flow.
How was the lease surrendered legally for trancio unit 23?
A Deed of Surrender was executed, with both parties consenting to terminate the lease early. It included agreement on vacant possession, removal of fit-out items, and waiver of ongoing liabilities.
What terms did you agree for the new letting for trancio unit 19?
We agreed a new 3 year lease with 2 months rent free for fit out and a break in year 2 with a break penalty.
Why did you negotiate a two year rent reduction for unit 12 Gear?
Due to the property being let on as is basis and required work to be operational.
What financial checks did you carry out on the tenant for unit 12 Gear?
I reviewed:
• Three years of accounts,
• Bank references,
• Credit reports.
Was an AML check carried out for unit 12 Gear?
Yes – an AML check was carried out in line with RICS guidance and Money Laundering Regulations 2017. We verified the beneficial owner’s identity, confirmed source of funds, and retained records securely.
What is an Authorised Guarantee Agreement and when might one be given?
An AGA is given by an outgoing tenant on assignment of a lease. It means they guarantee the assignee’s performance, usually until the next assignment. Introduced under the L&T (Covenants) Act 1995.
What is an Agreement for lease?
An Agreement for Lease is a binding pre-contract to enter into a lease once certain conditions are met – e.g., planning permission or completion of works. It’s commonly used in development or pre-let situations.
Is an EPC required for a letting?
Yes – under the Energy Performance of Buildings Regulations, a valid EPC must be provided before a property is marketed for let.
