Level 2 - Leases and the Legislation

Question 1

Which act provides a duty of care around Health and Safety for Employers for their employees?

Answer 1

Health and safety at work act 1974

Question 2

Which one of the following is NOT an important law that sets the parameters governing liability for those responsible for a property portfolio?

1.Occupiers’ Liability Act 1957, (Occupier of a premises to keep ‘invited/permitted’ visitors safe);

2.Construction Design and Management Regulations 2015

3.Health and Safety at Work Act 1974.
4. Section 4 of the Act sets out the parameters for those ‘in control of premises’.

5. Planning Law

6.Data Protection Act 2018

Answer 2

6..Data Protection Act 2018

Question 3

What is Employers Liability Insurance?

Answer 3

Where managers employ staff, they are legally required to arrange employer’s liability insurance and display a current employer’s liability insurance certificate at any estate where staff are employed.

Question 4

What is professional indemnity insurance?

Answer 4

Managers also need to have their own professional indemnity insurance in case they are sued by leaseholders, the landlord or third parties for professional negligence.

Question 5

What is engineering insurance?

Answer 5

Engineering insurance covers all the plant and equipment that is required under law to have periodic testing for example lifts, pressure vessels, gas appliances etc.

Question 6

What risks are normally covered by building insurance

Answer 6

fire
explosion
lightning
aircraft
riot
civil commotion and malicious damage
storm or flood
escape of water or oil
impact
sprinkler leakage
theft
subsidence or landslide
accidental damage

Question 7

What is the Construction (Design and Management) Regulations 2007.

Answer 7

The Construction Design and Management Regulations 2015 (CDM Regulations 2015) is a UK health and safety law that sets out the requirements for managing health and safety on construction projects. The regulations aim to ensure that construction work is carried out safely from start to finish by all parties involved, including clients, designers, contractors, and workers. The regulations apply to all construction projects, regardless of their size or duration.

Question 8

What is a management agreement?

Answer 8

A management agreement is a legal contract between the Freehold entity and a managing agent. This agreement outlines the responsibilities of the managing agent in maintaining and managing the building and common areas of the flats.

The management agreement typically covers the service level agreement.

It also sets out the rights and obligations of both parties, including fees, site inspection requirements, and termination of the agreement.

Question 9

Is the management agreement a prescribed document?

Answer 9

No, the management agreement is not a standard document

Question 10

What is a Covenant?

Answer 10

the parties’ promises to each other and their obligations under the lease

Question 11

what is a restrictive covenant

Answer 11

A restrictive covenant limits or prevents the use of land in a specified way to the benefit of other land. Restrictive covenants are said to run with the land. This means that the benefit and burden of the covenant relates to land itself and not to the landowner. If one of the original parties to the restrictive covenant sells their property, the covenant will remain enforceable

Question 12

What is a positive covenant

Answer 12

A positive covenant requires some form of action to be taken e.g. to erect a fence along a boundary. Positive covenants are generally a contract between the original parties to the deed imposing the covenant and do not bind future landowners.
With residential long leases, the freeholder may assign his interest to another person. When the leaseholder ‘sells’ the property they typically assign their interest for the remainder of the term to the ‘purchaser’. The person receiving the benefit of the assignment agrees to comply with all covenants agreed to by the original parties.

Question 13

What is case law

Answer 13

Case law – decisions by the courts on a variety of issues affecting the leasehold sector which can determine how a particular piece of legislation or words used in leases are to be construed

Question 14

What is Section 22 of the Landlord and Tenant Act 1985

Answer 14

Leaseholders have the right to inspect supporting documents e.g. invoices.

Question 15

What legislation allows leaseholders’ rights to challenge the payability and reasonableness of service charges at a first-tier tribunal (F-tT).

Answer 15

Landlord and Tenant Act 1985, specifically Section 27A which was added to the Act by the Commonhold and Leasehold Reform Act 2002.

Question 16

Does a managing agent need to be part of a redress scheme?

Answer 16

Since 1st October 2014 it has been compulsory for all letting and managing agents to belong to a government approved redress scheme.

Question 17

What redress schemes have been approved by the government and private sector letting and managing agents are required to be members of any one of them.

Answer 17

Property Redress Scheme
The Property Ombudsman

Question 18

What are the best Code of Practice of the Association of Retirement Housing Managers (ARHM) pracitices codes for management?

Answer 18

The 1993 Leasehold Reform, Housing and Urban Development Act gave the Government the power to ‘approve codes designed to promote desirable practices in relation to any matters concerned with the management of residential property’. Two codes have so far been approved for England and Wales.

RICS ‘Service Charge Residential Management Code’

Code of Practice of the Association of Retirement Housing Managers (ARHM)

Question 19

What Act approved the code of practises?

Answer 19

1993 Leasehold Reform, Housing and Urban Development Act

Question 20

What is the RICS ‘Service Charge Residential Management Code’

Answer 20

The RICS Service Charge Residential Management Code applies to flats, houses, and dwellings of all lease lengths and tenancy types, except where the landlord is a public sector authority or registered social landlord. However, social landlords managing for a private sector owner must follow the code’s best practices. The 3rd Edition of the Code, effective from 1 June 2016, is a comprehensive document including a summary of relevant legislation, and all property managing agents and employees should be familiar with it.

Question 21

What is The Code of Practice of the Association of Retirement Housing Managers (ARHM)

Answer 21

The Association of Retirement Housing Managers’ Code of Practice applies to anyone managing leasehold retirement housing and covers properties specifically designated for retired older people. It summarizes the law in statements requiring action by the manager and identifies best practices. The code is essential for those managing leasehold retirement housing, and the Government approved a revised 3rd edition effective from 1st June 2016. The ARHM’s codes of practice also apply to social landlords managing leasehold retirement housing, and a private retirement code of practice was approved by the National Assembly for Wales in March 2007.