MG - property management Flashcards
How do you calculate PM fees when issuing a SC budget to the client?
Under rics should be a fixed fee (norm 10%) - check the PM agreement and check what you agreed as there might be allowance for uplift year on year
In dealing with tenant arrears at Nottingham how did you implement payment plans?
Normally by emailing or setting up a call with tenants after agreeing this with the client - DECIDED THIS ON CLIENT CALL FOR TENANTS THAT WERE GOOD PAYERS WHO INFORMED THAT THEY WERE STRUGGLING
What measures can you use to chase tenant arrears?
CRAR
7 day letter
Then enforcement agentsn - pay it or take goods until received
Are they are laws in the uk on the installation of ev chargerS?
There are gov regulations on the sale of ev charging points and conditions they must comply with e.g. have smart functionality e.g. send and recevie info
What were the reinstatement obligations for the tenant who installed the ev chargers?
How do you fulfil your duty of care to a client?
communicate with clients regularly
reporting
have necessary discussions
try to ensure site is running well
what needs to be changed or budgeted for.
What else did you make the tenant aware of when reviewing the application for the ev charger?
That no Licence can be granted until all information requested has been supplied and we have had a reasonable opportunity to establish that it is satisfactory under the terms of the lease
what did the lease say about alterations for the shopping centre in Nottingham?
Their lease permits them to undertake alterations but any alteration requires landlord consent.
What sort of cosmetic alterations was the tenant at Nottingham proposing?
Largely cosmetic alterations to internal signage, general decorations, and new vinyl flooring.
who did the fee for the letter license at Nottingham get paid to ?
Savills - it was reviewed and document by savills letter license - on site manager and surveyors reviwed the request and charged our standard fee for this
What do you include within your client recommendation for the alterations at Nottingham?
- The plans
- confirmation from on -site engineer regarding scope of the works
What did the letter license agree and any conditions?
That the tenant could carry out the proposed alterations on condition that a pre-start meeting to be arranged with Centre Management and works carried out within 3 months
what did the Nottingham lease say about reinstatement?
There was an obligation to reinstate the property to the plan and design of the unit before the works
why did you chose a letter license?
Not necessary to get a formal license and cheaper for the tenant - to maintain L and T relationship
how did you follow up on the works?
followed up with tenant on the signing of the letter license/ payment
- and ensured that the site team were informed and that a pre work meeting had been arranged
What are 3 of the mandatory requirements laid down by rics service charge professional standard?
1 All expenditure that the owner and manager seek to recover must be in accordance with
the terms of the lease.
2 Subject to section 4.2.7, owners and managers must seek to recover no more than 100%
of the proper and actual costs of the provision or supply of the services.
3 Owners and managers must ensure that service charge budgets, including appropriate
explanatory commentary, are issued annually to all tenants - INCLUDE AN APPT MATRIX
What does the rics guidance say about transparency and sc ?
All costs should be transparent so that all parties, owners, occupiers and managers, are
aware of how the costs are made up. Management fees should be on a fixed-price basis
with no hidden mark-ups.
Where are sc monies held?
In a separate sc - the interest is then credited once admin costs have been deducted
how was your SC budget laid out?
- 3 schedules in line with the lease for this property (estate, road and security)
- Using the subheadings from the rics prof statement (management, soft services( security, waste man), hard services (drainage maintenance and repair), utilities, insurance
what were the overall key considerations when updating the SC budget?
Review each cost heading to ensure they are correct
Consider what the current budget is, what has changed, is there anything that will impact the next year?
how did you determine the appropriate management fee?
Management fees should be on a fixed-price basis
with no hidden mark-ups. and check the lease !
why did you see an increase in security costs within the budget?
Increase in national minimum wages
what kind of sc exemptions did you find in the leases at Enstone?
some leases provide for only contributing towards the road or towards security of the site
What type of service charge caps?
FIXED SC CAPS
What are service charges normally based on?
Floor areas but check in the lease
If you were to have RPI - SC caps how do you deal with this?
Refer to the lease and multipy by rpi - Rpi – if you don’t have correct year figure reconcile the difference at year end when published
What did you provide to the LL and the tenant?
LL- a copy of the budget explaining what’s payable and the tenant costs - ask for sign off
Tenants - tenant pack explaining the services and appt matrix with the tenant name redacted
According to RICS professional standard when should SC budgets be completed and reconciled?
Budgets should be issued at least one month prior to commencement, and reconciled accounts issued within four months of the end of the service charge year in question.
How did you choose between 7 day letter and payment plans
Tenants who had been good payers we accepted that they had expereienced a dip in business and client instructed payment plan in good faith for these clients (could ask for turnover figures over 1 year to compare it to now if you wanted to check)
What are the general consents around tenants and signage?
Often leases have ability to change signage as long as its in keeping with the corporate branding so don’t need LL approval
Was the FM fees for the SC budget shown as a management cost or a staff cost?
Put under staff costs under the RICS - split them out as this is more transparant
What are common sc exemptions?
marketing and promotions, seasonal decorations, security or road (industrial), not to improve if it is not necessary,
Why are seasonal decs ?
If they aren’t explicitly excluded rics says they have to contribute as it is under external landscaping
what other basis can you use for SC?
FLOOR areas
weighted floor areas (shopping centre e.g. debenhams)
fixed - lease specifies that tenant contributes x
what is a sc cap and what basis?
cap on sc payable by tenant
fixed % increases
RPI
fixed fee
cpi index
Why does the LL have to pay for the sc shortfall?
Within rics principles it states that LL must pay for the shortfall
- also normally specified within the lease that the tenant will not be liable for the shortfall
what are 5 of the rics sc principles?
if doing a sc reconcliation what do you look for?
See if the costs charged are in line with those that have been spent - balance the charges
If SC consultant is witholding the entire sc monies due to an account charge?
They are not allowed to withold all monies - only the amount within dispute
Case law says pay now, dispute later - but generally for l&t relationships if its a small amount within dispute then don’t ask this - just ask them to pay what is not in dispute and then deal with the dispute
What would you do if you issued a balancing charge and tenants weren’t happy?
Issue variance report, explain why it has happened
In the indsutrial business park what were common examples of damage/ required repair to the units?
- Fire risks
- Impact damage (lorries and cars)
What were the units at industrial business park like?
Steel portal frame with sheet metal rooves and metal cladding to the outside
What is a common defect of sheet metal rooves?
- Cut edge corrosion - v common - the sheets overlap and if water runs down where they have been cut and not treated they corrode
- in high winds the panels can also lift
why should you treat cut edge corrosion?
if it corrodes too much will get leaks in the roof
In ethics - gesture of goodwill you suggest LL pays for the leaks. What would you have done if the ll didnt offer this?
Could issue a repair notice if them not doing it would materially affect value of the building- ll can do the works and recharges the tenant
check lease- remind them they are breaching the insurance and their repairing covenant within the lease
apart from business rates liabilities on void units what are other ll?
- SC for multi let estates
- Insurance
