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ROSIE APC > Leasing Letting > Flashcards

Leasing Letting Flashcards

1
Q

what is the RICS Professional Standard: Code for Leasing Business Premises 2020

A
  • objectives are stated to improve the quality and fairness of negotiations on lease terms and promote the use of a new set of heads of terms to make legal drafting of leases more efficient
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2
Q

what is the structure of the Code for Leasing Business Premises 2020

A

part 1 Introduction
part 2 mandatory requirements
part 3 lease negotiation best practice
part 4 appendices

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3
Q

What does Part 2 Mandatory requirements include

A
  • negotiations must be undertaken in a collaborative manner
  • an unrepresented party must be made aware of the existence if the Code
  • must have subject to contract on the heads of terms
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4
Q

what is in heads of terms

A
  • identity and extent to the premises
  • any special rights
  • length of the term
  • options for renewal/ break rights
  • guarantor/ deposit
  • rent
  • rent free or incentives
  • frequency of payment
  • whether VAT applicable
  • rent reviews
  • service charge
  • alienation
  • repairing obligations
  • permitted use
  • alterations
  • fit out if known
  • conditions of letting eg surveys
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5
Q

what di you need to request when choosing a tenant

A

bank, accountant and 2 trade references
previous LL reference
3 years audited accounts

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6
Q

what is the profits test

A

net profit is 3x the rent for 3 consecutive years

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7
Q

What major lease terms affect rent value

A
  • lease length
  • break clauses
  • alienation
  • repairing obligations
  • user clauses
  • rent review pattern & basis of valuation
  • security of tenure
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8
Q

what are the typical conditions for a break

A

compliance with the tenants covenants
payment of all rent and other sums due
vacant possession

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9
Q

what are the advantages and disadvantages of pre lettings

A
  • tenant has the delivery if bespoke building /premises designed to suit their needs
  • disadvantages include entering a lengthy and complex process and level of risk in the event of the developer or contractor not performing
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10
Q

what documents need to be attached to the agreement to lease

A
  • the lease
  • license for alterations
  • specification and plans
  • developers guarantee/bond
  • warranties
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11
Q

what is the UK Commercial Estate Agency 2016

A
  • mandatory professional statement
  • mandatory standards for members involved in agency and real estate management
  • sets out 12 core principals:
  • act with honest, fair, transparent and professional manner
  • carry out work with due skill, care and diligence and ensure all staff have the necessary skills
  • ensure that clients are provided with fair and clear terms of business and complaints handling procedure
  • do the upmost to avoid conflicts of interest
  • not to discriminate unfairly in dealings
  • all communications are fair and decent, clear and timely and transparent
  • all advertising and marketing material is honest and truthful
  • any clients is held in separate accounts and covered by adequate insurance
  • hold appropriate PII/errors or omissions issuance to ensure customer does not suffer loss due to negligence
  • make it clear the identity of your client and ensure clear obligations
    -give realistic of of prices having regard to evidence
  • ensure all meetings inspections are carried out in accordance with the client’s wishes
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12
Q

What is the Estate Agency Act 1979

A
  • UK law that regulates the work of estate agents
  • it contains 7 key points
    1. clarity as to the terms of the agency (s.18)
    2. honesty and accuracy
    3. agreement and liability for costs
    4. openness regarding personal interests (s.21)
    5. absence of discrimination
    6. legal obligation to tell the client about offers received
    7. keep clients money separate
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13
Q

what are the most important points from the Estate Agency Act 1979

A

Section 18 - Terms of business
- specify all costs and fees in advance
- itemise payments
- specify the nature of agency and selling rights to be agreed ( sole, joint or multiple)
- advise clients of any services available to the applicant

Section 21 - disclosure of personal interests
- a connected person is someone who can benefit financially from the transaction such as relation or business associate
- any personal interest should be declared on the heads of terms as a minimum and if appropriate not appropriate to act

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14
Q

what are the penalties under the Estate Agents Act 1979

A
  • prohibition order (stops agent from acting)
  • warning order - written warning to not do it again
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15
Q

what is the Estate Agents (Undesirable Practices) No 2 Order 1991

A
  • order made under the Estate Agents Act 1979
  • must inform clients of any services to be offered to perspective purchasers unless offered free of charge
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16
Q

What is the Estate Agents (Provision of Information) Regulations 1991

A
  • regulations relating to the provision of information which should be supplied to a client
    must provide info in writing regarding
  • the service to be provided
  • remuneration
17
Q

what is the cooling off period

A
  • up to 14 days allowed for clients to change their mind o instructing the agent in accordance with the consumer protection regulation
18
Q

What is the Consumer Protection from unfair trading regulations 2008

A
  • provides protection over misleading information
  • relates to business to consumer work
  • broader non-specific consumer protection for estate agents
  • duty of care extended to not just clients but all consumers (viewers, buyers, potential clients, vendors)
  • unfair practices include giving false or misleading information or hiding or failing to provide information
19
Q

what are the penalties Consumer Protection from unfair trading regulations 2008

A

unlimited fine and/or prohibition order
compensation may also have to be paid to complainant up to £25,000

20
Q

What are the 10 key facts in the Consumer Protection from unfair trading 2008

A
  • applies to lettings and sales
  • duty of care to clients and all interested parties
  • must declare everything known about property
  • must not exert pressure on buyers
  • if any info is discovered during - must be shared
  • any omissions can also lead to a breach
  • due diligence is required
  • must be validated by the client
  • policed by the Trading Standards Office
    declaimers do not apply to this criminal offence
21
Q

what does the caveat ‘let the buyer beware’ mean

A

the buyer should satisfy itself on all the matters relating to the property

22
Q

what is the Consumers rights act 2015, who is it policed by and what is the penalty

A
  • letting agents must clearly display summary of charges both in their offices and on the website
    -policed by the Local authority and penalty £5,000 for each breach
23
Q

what is the Misrepresentation act 1967?
what are the penalties?

A
  • relates to the misrepresentation or false statement of the fact made by a party during pre-contractual enquiries
  • agent has a duty to check the information is reliable
  • vendor and agent can be sued for damages and or contract rescinded
  • civil offense
24
Q

what is the case that relates to the misrepresentation act and what are the 3 tests to decide agents liability for negligent statements

A

Hedley Byrne & Co v Heller & Partners
1. foreseeability
2. proximity
3. Fairness

25
Q

What are the rules over market signage

A
  • Under the Town and Country Planning (Control of advertisements) England Regulations 2007
  • Planning is required for non-resi boards over 2sq m (flat) and 2.3 sq m (V board)
  • only one board per building
  • must not project more that 1, from the face of the building and not above 4.6m from ground safe condition
  • also need planning consent for:
  • illuminated boards
  • remote boards
  • boards on listed buildings or conservation areas
  • must be removed 14 days after completion of the transaction
  • some local authorities have more restrictive requirements
  • must have owners approval
  • policed by local Planning Authority who can remove boards, issue fines and order costs
26
Q

What are capital allowances

A

important form of tax relief upon capital expenditure for the construction or purchase of commercial property or business assets

they can generate substantial tax relief on the value of plant and machinery fixtures such as AC and lifts

27
Q

What is the purpose of the Land Registration Act 2002

A

provides a framework for electronic property conveyancing by allowing formal documents to be executed electronically

all freeholds and new leases granted or over 7 years or existing leases sold or assigned with 7 years left to run must now be registered with the Land Registry

adverse possession - have to prove 10 years of use

trying to achieve comprehensive registration of all Property and by 2030

28
Q

what must freehold transactions have in their compliant plan under the Land Registration Act?

A
  • drawn to a metric scale (normally 1:100 or 1:200)
  • have a scale measurement bar
  • have the scale noted on the plan
  • include a 1:1,250 scale location map
    full address including post code
    a north point
    demise in red outlines on the inside edge of the property

ROSIE APC (16 decks)

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