Brainscape's Knowledge GenomeTM

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


See full index

APC - JM > Leasing and Letting > Flashcards

Leasing and Letting Flashcards

0
Q

What is the name of the Purple Book?

A

RICS Commercial Real Estate Agency and Brokerage Standards 2014

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

How close do you have to be for it to become a personal interest?

A

2 steps (i.e. your friends friend)

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

What are the twelve core principals of the RICS UK Commercial Estate Agency Professional Statement, 2016?

A
  1. Honesty, fairness, transparency, professionalism
  2. Due skill, care and diligence
  3. Ensure Terms of business are fair and clear with details of complaints handling procedure
  4. Avoid conflicts – deal with them openly and fairly
  5. Don’t discriminate unfairly
  6. Keep communications fair, decent, clear, timely and transparent
  7. keep client money separate With adequate insurance
    8 . Honest and truthful advertising/marketing
  8. Hold appropriate PII
  9. Identify client and make clear obligation to all parties
  10. Give realistic assessments using market evidence and best professional judgment
  11. Carry out inspections etc. As per the clients wishes with due regard to security and safety
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a tenancy at will?

A

A tenancy for an unspecified length formed by a written agreement. Landlord can evict the tenant at any time.

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

What are the consumer protection regulations 2008?

A

This relates to the duty of care owed to consumers by businesses.

It was designed to protect consumers from businesses who trade unfairly.

It includes a black list of banned training practices.

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

What is a deed?

A

It’s a contract made under a seal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How do you apportion service charges?

A
  • By floor areas (NIA)
  • By weighted floor areas
  • By rateable value
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the main lease terms that affect value?

A

Break clauses

Etc

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the most recent case law on break clauses?

A

MNS vs BNP Paribas

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are the three tests to decide agents liability for negligent statements?

A
  1. Foreseeability
  2. Proximity
  3. Fairness

Hadley Byrne vs Heller

  • test of reasonableness
  • liability to negligent statements
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

When should you not undertake an instruction?

A

If you are not competent

If you suspect Money laundering

If there is a Conflict

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How do the consumer protection regululayions apply to you as an agent?

A

– Full due diligence required for new instructions
– Particulars must be validated by client
– Applies to entire lettings/sales process
– Agents have duty of care to clients and interested parties
– Agents must declare everything good and bad about a property (Omissions = breach)
– Any info discovered must be passed on to interested parties
– Agents must not exert undue pressure on interested parties
– Disclaimers do not apply as it is a criminal offence

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

What are the penalties for non-compliance with the misrepresentation act 1967?

A

Sued for financial damages and/or contract rescinded

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

What are the penalties for non-compliance with the consumer protection regulations 2008?

A

And unlimited fine, a prohibition order and prison of up to 2 years

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

What are business rates?

What is the current multiplier in the city of London?

A

Business rates are a tax on business property is set by the government.

The City of London multipliers are set at 0.471 for small businesses and 0.484 for other businesses.

There is a further addition of 0.02 for crossrail

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

What occupiers cannot register for VAT?

A

Financial institutions, charities and medical practitioners.

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

What is a ‘sui generis’ use?

A

This is where there is no specified use class for the use.

Planning consent is always required for change of use.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

How do you document an assignment?

A

By deed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

When was the antecedent valuation date for the 2017 revaluation?

A

1st April 2015

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What items are included in the service charge for office properties?

A 
Security/commissionaire/receptionist
Lifts
Common parts
Utility charges for common parts
Managing agents
Maintenance of exterior
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What user clause is Industrial?

A

B2 - General Industrial

B8 - storage and distribution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is the hierarchy of evidence?

A 
Open market lettings
Rent reviews
Lease renewals 
Independent expert determinations
Arbitrator determinations
Court determinations (L&T Act 1954)
Sale and leasebacks
Surrender and renewals
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

You mention that the lease is inside the act. What does this mean?

A

It means that under the landlord and tenant act 1954, the tenant has the right to renew the lease.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

How could the landlord refuse to grant a new lease?

A

By serving a hostile section 25 notice.

With in this they would have to set out grounds for refusal under section 30 of the act.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What are the grounds for refusal of a new lease?

A

There are 7 grounds (a-g)

A) repairing covenant breach
B) persistent delay in paying rent
C) other substantial breach
D) provide suitable alternative accommodation

D) uneconomic subdivision
F) demolition or reconstruction
G) owner occupation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Can you tell me any professional statements relating to estate agency?

A

The RICS UK commercial estate agency professional statement, 2016.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Can you tell me what the core principles are of the RICS UK commercial estate agency professional statement, 2016?

A
  1. Act with honesty/fairness/transparency/professionalism
  2. Carry out work with due skill care and diligence
  3. Provide clients with fair and clear terms of business and complaints handling procedure
  4. Avoid conflicts – manage them openly and fairly
  5. Don’t discriminate unfairly
  6. Fair/decent/clear/timely/transparent client communication
  7. Honest/truthful marketing/advertising
  8. Client money – held separately with adequate insurance
  9. Hold appropriate PII
  10. Identify client and make obligations clear
  11. Give realistic assessments
  12. Meetings/inspections/viewings – Regard to clients wishes and security/safety
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What is a prohibition order?

A

It stops an agent practising.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

When does the estate agents act 1979 apply?

A

During the sale/purchase of Freehold or leasehold properties.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

When do the consumer protection regulations 2008 apply?

A

During the entire agency process.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

When does the misrepresentation act 1967 apply?

A

It applies to mis-statements, false/fraudulent statements or miss representations made during pre-contractual enquiries.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

What size letting board do you need planning consent for?

A

Flat board – 2 SQM

V board – 2.3 SQM

Must not project more than 1 m from facade

Must not be above 4.6 m from ground

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

What is a premium and how would you calculate it?

A

Premium is a capital payment made by one party to another.

This could be for an assignment of a lease where and ingoing tenant pays a premium to represent the difference between the passing rent and the market rent.

Alternatively this could be for a surrender and regrant where a landlord pays a premium to the tenant to reflect in increase in the capital value.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

How would you calculate the net effective rent?

A

This is devaluing the headline rent taking into account rent free periods.

Method of calculation:

  1. Straight line method
  2. Use of DCF

Allow 3 months for fitting out period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Are you aware of any case law which sets out the difference between a license and the lease?

A

Street vs Mountford

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

What is an alienation clause?

A

This sets out a tenants right to dispose of their lease, such as by way of assignment or sub-lease.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Why would you recommend your client to sublet rather than assign?

A

If the market rent was higher than the passing rent (profit rent)

If the new party is of lesser covenant strength

If the tenant wants to reoccupy in the future

If the tenant wants to dispose of part of their space

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

What are the different types of alienation clause?

A

Open

  • Allowed

Restricted

  • Conditional

Absolute

  • Not allowed
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

What act are you aware of that relates to assignments?

A

Landlord and tenant covenants act 1995

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

What did the landlord and tenant covenants act do?

A

It abolished privity of contract and introduced aga’s

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

What is an alterations clause?

A

This sets out the tenants rights with regards to alterations/works to their space.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

What is a license for alterations?

A

This details the works to be undertaken by the tenant.

It must be completed prior to works commencing.

Normally requires tenant to reinstate works at end of lease.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

What are dilapidations?

A

This is a negotiation between the landlord and the tenant at the end of the lease to put the space back to its condition at the start of the lease.

Two options:

  • Tenant does the works
  • Tenant pays landlord to do the works
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

What is a schedule of dilapidations?

A

This sets out the works that must be done by the tenant at the end of the lease in line with the reinstatement clause in the lease

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

What forms of schedule of condition are you aware of?

A

Interim

Terminal

Final

45
Q

How would you advise your client if they had an empty building?

A

Inform insurers

Clear the building

Record regular inspections

Empty rates

Seal letterbox

Disposal/marketing strategy

46
Q

Who is responsible for the insurance within the lease?

A

Usually the landlord.

Re-charged to the tenant pro rata.

47
Q

What are the UK quarter days?

A

25th March

24th June

29th September

25th December

48
Q

What is forfeiture?

A

Where a landlord takes back possession from a tenant for breaching their lease.

49
Q

What is an effective FRI lease?

A

When the landlord is responsible for repairs and re-charges the tenant via the service charge.

50
Q

What is a schedule of condition?

A

This is a schedule which sets out the limit of the tenants reinstatement obligations and is attached to the lease.

Doesn’t normally include services.

51
Q

What is a service charge?

A

This is a charge to the tenant for costs incurred by the landlord to maintain the property.

52
Q

How are service charge is normally apportioned?

A

Normally pro rata by floor area

Or:

Fixed percentages

Rateable value

Weighted floor area

53
Q

What is the sinking fund?

A

A fund setting aside money for replacement of a wasting asset.

54
Q

What is the user clause?

A

This relates to the planning use for a property and how it can be used.

55
Q

What is the license?

A

A right to enter a property

No interest in land

Makes lawful what would be unlawful

Can be terminated by either party at any time

56
Q

What is a lease?

A

Grants exclusive occupation

There is a payment of rent

For a specified term

(If more than 3 years – must be in writing and registered as a deed)

57
Q

What is the difference between a lease and a license?

A

The lease provides a tenant with an interest in the land

The lease can be assigned

The lease cannot be terminated until it expires

58
Q

What is a tenancy at will?

A

A form of license

No specified time

Tenant can be evicted at any time

Normally used for allowing a tenant entry for fit out works.

59
Q

What is a way leave?

A

Temporary right

Normally used to allow a company to put in a fibre line

60
Q

What is an easement?

A

A permanent right for enjoyment over land.

i.e. a right of way

61
Q

What does without prejudice mean?

A

Any information labelled without prejudice cannot be relied upon.

62
Q

What is the hierarchy of evidence?

A

Establishes the relative weight attached to comparable evidence.

Open market lettings
Rent reviews
Lease renewals
Independent expert determinations
Arbitrator determinations
Court determinations
Sale and leasebacks
Surrender and renewals
63
Q

What is a Calderbank offer?

A

It can help to achieve an early resolution of the dispute and prevent costs from escalating or having to go to court.

64
Q

What is section 25 of the L and T act 1954?

A

Landlords notice to terminate

65
Q

What is section 26 of the L and T act 1954?

A

Tenants notice requesting a new tenancy

66
Q

What is section 27 of the L and T act 1954?

A

Notice to terminate served by tenant after expiry of the lease.

67
Q

What are the grounds under section 30 of the L and T act 1954?

A

A) breach of repairing covenant
B) persistent delay in paying rent
C) other substantial breach
D) provide suitable alternative accommodation

(Compensation)
E) on economic subdivision
F) demolition or reconstruction
G) owner occupation

68
Q

What is section 37 of the L and T at 1954?

Follow up: What is the compensation?

A

Sets out compensation payable by the landlord due to successful section 25 application.

Compensation payable:

14+ years occupation – RV x 2
Less than 14 years – RV x 1

69
Q

How do you contract a lease outside the act?

A

Under section 38A of the L and T act 1954.

Landlord must serve notice on the prospective tenant

Tenant must confirm he accepts

Simple or statutory declaration:

  • Simple – more than 14 days to commit
  • Statutory – Less than 14 days to commit
70
Q

How long does planning permission last?

A

3 years normally

71
Q

What impact would a return frontage have on the rental value of a retail property?

A

Typically an increase of 10 to 15%

However as I have limited experience with retail, I would always seek specialist advice.

72
Q

What is the anti-cedant valuation date for the current rateable value yes?

A

1st April 2015

73
Q

What is the code for leasing business premises?

A

Not an RICS publication.

A voluntary code considered best practice.

74
Q

What is the aim of the code for leasing business premises?

A

To achieve efficiency and fairness between the landlord and tenant within the commercial property industry.

75
Q

What does the code for leasing business premises consist of?

A

It is divided into three sections:

The landlord code:- Sets out recommendations to landlords on negotiation of a business tenancy.

Occupier guide:- Sets out advice in 37 tips for prospective tenants on how to negotiate terms.

Model heads of terms:- Template for good practice.

76
Q

What are the principles of the code of leasing business premises?

A

Fairness

Accountability

Transparency

77
Q

What do you consider when advising your client on tenant selection?

A

The covenant strength of the prospective tenant as this has an important relationship with the investment value of a property.

78
Q

How might you improve the covenant strength of a prospective tenant?

A

By requesting further surety.

This could be through a:

– rent deposit
– parent company guarantee
– Personal guarantee
– bank guarantee

79
Q

Can a rent deposit be assigned or passed on?

A

No

It is personal to the tenant.

80
Q

How is a rent deposit documented?

A

In a rent deposit deed attached to the lease.

81
Q

How is a rent deposit held?

A

Can a separate bank account.

Interest accrued goes to the tenant.

82
Q

What information do you request when seeking to understand the covenant strength of a prospective tenant?

A

– 3 years audited accounts

– Credit rating (DandB or Experian)

– Landlord’s reference

– Bank/accountant information

– Trade references

83
Q

What is the profits test?

A

This is typically to establish if the net profit of a prospective tenant is 3x the rent for 3 consecutive years.

Alternatively, you can check if the net asset value is more than 5x the rent.

84
Q

What are the major lease terms which affect value?

A

Lease length/term certain

Break clause

Alienation clause

Repairing obligations

User clauses

Security of tenure provisions

85
Q

What is a collateral warranty?

A

This is a warranty that provides a tenant with a direct contract with the construction team.

86
Q

What are the advantages/disadvantages of a pre-let?

A

Advantages:

– Delivery of a bespoke building designed to suit a tenants needs.

Disadvantages:

– Lengthy and complex process

– Risk of developer/contractor not performing

87
Q

What are typical conditions within a break clause?

A

Break clause are normally conditional on:

  • The tenant complying with their obligations under the lease.
  • Payment of rent and any other sums due
  • Vacant possession

(Could include a rent penalty)

88
Q

What is time of the essence?

A

This means there is a strict timetable.

For example, in a break clause, a tenant/landlord will have to serve notice to terminate within a strict set period of time.

89
Q

What would you include in your terms of engagement?

A

Agency basis

Agency rights

Fee

Marketing costs/disbursements

Timescale for payment of fees/disbursements

Details of complaints handling procedure

90
Q

Who polices the consumer protection regulations, 2008?

A

Policed by Trading Standards Office

91
Q

Are you aware of any RICS material which governs leasing and letting?

A

The RICS UK commercial estate agency professional statement, 2016

92
Q

Are you aware of any global RICS material which governs leasing and letting?

A

The RICS global real estate agency and brokerage professional statement, 2016

93
Q

Are you aware of what the new agency standards updated?

A

The RICS commercial real estate agency in Brokeridge standards, 2014.

Also known as the purple book

94
Q

What regulations govern marketing signage?

A

The town and country planning regulations, 2007

95
Q

What do you have regard to when setting out your heads of terms?

A

The model HOT‘s setbout in Code of leasing business premises, 2007.

96
Q

What does the code of leasing business premises, 2007 set out?

A

Recommendations for landlords

Guidance for prospective tenants

Model heads of terms

97
Q

I noticed within your disclaimer on your marketing particulars that you refer to the property misdescriptions act 1991. Can you tell me about this?

A

The property misdescriptions act was replaced by the consumer protection regulations in 2013. I actually drew my company’s attention to this error and our disclaimer has since been changed.

98
Q

What legislation governs alterations in property?

A

Landlord and tenant act 1927

States landlords can not unreasonably withhold consent.

99
Q

What is a health warning?

A

This is the what a landlord serves on a prospective tenant when they want to contract outside the 1954 act.

It is set out in S38a of the LTA 1954.

100
Q

How can you contract outside the 1954 act?

A

By serving a health warning on the prospective tenant under s38a of the LTA 1954.

You can serve a statutory or simple health warning.

Statutory is when you have less than 14 days to complete

Simple is when you have 14 days or more to complete.

101
Q

What is an article 4 direction

A

This is put in place by some boroughs to stop permitted development.

102
Q

Are you aware of any potential changes with regards guidance on service charges?

A

The current code which is advisory is being updated and will become mandatory with best practice guidance.

103
Q

Are you aware of any changes with regards to business rates revaluations?

A

The government has announced that revaluations will change from 5 yearly to 3 yearly.

Next revaluation will be in 2021.

104
Q

What does an experien credit check detail?

A

It produces a credit assessment and establishes the risk of a company providing a DELPHI score out of 100.

It also shows their credit limit and credit rating and provides their odds of failure in the next 12 months.

105
Q

What are the current UBR multipliers?

A
  1. 493
  2. 480 for small businesses < £70k RV

+ 0.02 for Crossrail > £50k RV

+ 0.005 for City of London

106
Q

What act are license for alterations governed by?

A

L and T act 1927

107
Q

What is the difference between Misrepresentation act 1967 and Consumer Protection Regulations 2008?

A

Breaching CPR is a criminal offence and has greater punishments including the potential for up to two years in prison.

Breaching Misrep is a civil offence. Liable for damages.

Disclaimers can be used for Misrep but not for CPR.

108
Q

What does the Code for Leasing Business Premises art out?

A

It aims to achieve Fairness, Accountability and Transparency.

Landlord Code

Occupier Guide

Model HOTs

109
Q

What is a warning order?

A

It gives an agent a written warning not to repeat the action again.

110
Q

What are the penalties for breaching consumer protection regulations?

A

Unlimited fine

Prohibition order

Compensation

111
Q

How do you negotiate?

A

Always adhere to 5 core values

Agree client objectives

Know what is and isn’t negotiable

Method of communication

Know when to walk away

APC - JM (11 decks)

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