Leasing and Letting Level 3

Question 1

Unit 23 Manvers - How did you determine the ‘best choices’ and advise the client?

Answer 1

Spreadsheet of applications, check their intentions, what size space they request, if they suited the business park. The put the options forward to the council.

Question 2

Unit 23 Manvers - How do you gauge covenant strength, what advice did you give?

Answer 2

Age of the business, how much profit and turnover they produce, check credit report.

Question 3

Unit 23 Manvers - What does a bit of competition matter on the same business park, why do you advise a particular tenant mix?

Answer 3

Reduce the risk in case a certain market fluctuates. Also could lead to tension between tenants.

Question 4

Suite 2 Bingham Enterprise Centre - Explain why you advised you needed more information about an above average risk credit check?

Answer 4

We trust the advise that came from the credit check. Wanted to better understand the risk.

Question 5

Suite 2 Bingham Enterprise Centre - Was it ethical to expect the tenant to personally guarantee the lease, whereas other tenants don’t require that?

Answer 5

Yes, councils view on entering tenants position is subjective. Guarantees are agreed where evidence suggests there is sufficient risk. If we were reviewed in the future and asked what precautions we took we would have evidence.

Question 6

Suite 2 Bingham Enterprise Centre - It seems your checks confirmed the tenant was acceptable, why was the above advice necessary?

Answer 6

Because of the credit check.

Question 7

What are potential options for additional lease security?

Answer 7

Break options
Security deposits
Personal guarantee
Guarantee by parent company
Guarantee by bank
Credit checks
Tenant references or referals
Landlord insurance