MG - property management

Question 1

How do you calculate PM fees when issuing a SC budget to the client?

Answer 1

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

Question 2

In dealing with tenant arrears at Nottingham how did you implement payment plans?

Answer 2

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

Question 3

What legal measures can you use to chase tenant arrears?

Answer 3

CRAR
7 day letter
Then baliffs go in - pay it or take goods until received

Question 4

Why are EV chargers an insurance risk?

Answer 4

• significant fire may reach beyond damage to the located property and could also lead to business interruption, as well as public liability risks of loss, damage or injury to other third parties.

Question 5

Did you notify the client at high wycombe that the ev chargers were an insurance risk?

Answer 5

This was in jan 2023

Question 6

Did you charge a fee for the license for alterations at high wycombe?

Answer 6

We charged surveyors fees (1100) and legal fees to the tenant( LL solicitor - 750)

Question 7

Were the ev chargers at high wycombe fast or standard chargers?

Answer 7

Standard charger

Question 8

Did the building surveying team charge a fee for reviewing the ev charger design?

Answer 8

Yes - was included as part of the surveyors fees - they reviewed the design and spoke to contact on site to confirm it was feasible at the site and it could support the chargers

Question 9

What 3 things can you do when installing an EV charger to reduce the risk of fire/ explosion?

Answer 9

Ideally, electric vehicle charging, and parking should be located at least 10 m from combustible walls.

Electric charging units/parking areas should not be located within a minimum of 10 metres of external
combustible or flammable storage areas, such as waste compound

Charging units should not be
installed in any location where flood or excessive surface water run-off and pooling is considered a risk.

Question 10

who was liable for the insurance of the ev chargers? -

Answer 10

LL pays for insurance cover for the site and re-charges to the tenant

Question 11

Are they are laws in the uk on the installation of ev chargerS?

Answer 11

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

Question 12

What were the reinstatement obligations for the tenant who installed the ev chargers?

Question 13

How do you fulfil your duty of care to a client?

Answer 13

communicate with clients regularly
reporting
have necessary discussions
try to ensure site is running well
what needs to be changed or budgeted for.

Question 14

What else did you make the tenant aware of when reviewing the application for the ev charger?

Answer 14

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

Question 15

what did the lease say about alterations for the shopping centre in Nottingham?

Answer 15

Their lease permits them to undertake alterations but any alteration requires landlord consent.

Question 16

What sort of cosmetic alterations was the tenant at Nottingham proposing?

Answer 16

Largely cosmetic alterations to internal signage, general decorations, and new vinyl flooring.

Question 17

who did the fee for the letter license at Nottingham get paid to ?

Answer 17

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

Question 18

What do you include within your client recommendation for the alterations at Nottingham?

Answer 18

• The plans
• the method statement - scope of works
• the risk assessment
• confirmation from on -site engineer regarding scope of the works

Question 19

What did the letter license agree and any conditions?

Answer 19

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

Question 20

what did the Nottingham lease say about reinstatement?

Answer 20

There was an obligation to reinstate the property to the plan and design of the unit before the works

Question 21

why did you chose a letter license?

Answer 21

Not necessary to get a formal license and cheaper for the tenant - to maintain L and T relationship

Question 22

how did you follow up on the works?

Answer 22

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

Question 23

What are 3 of the mandatory requirements laid down by rics service charge professional standard?

Answer 23

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

Question 24

What does the rics guidance say about transparency and sc ?

Answer 24

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.

Question 25

Where are sc monies held?

Answer 25

In a separate sc - the interest is then credited once admin costs have been deducted

Question 26

how was your SC budget laid out?

Answer 26

• 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

Question 27

what were the overall key considerations when updating the SC budget?

Answer 27

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?

Question 28

how did you determine the appropriate management fee?

Answer 28

Management fees should be on a fixed-price basis
with no hidden mark-ups. and check the lease !

Question 29

why did you see an increase in security costs within the budget?

Answer 29

Increase in national minimum wages

Question 30

what kind of sc exemptions did you find in the leases at Enstone?

Answer 30

some leases provide for only contributing towards the road or towards security of the site

Question 31

What type of service charge caps?

Answer 31

FIXED SC CAPS

Question 32

What are service charges normally based on?

Answer 32

Floor areas but check in the lease

Question 33

If you were to have RPI - SC caps how do you deal with this?

Answer 33

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

Question 34

What did you provide to the LL and the tenant?

Answer 34

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

Question 35

According to RICS professional standard when should SC budgets be completed and reconciled?

Answer 35

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.

Question 36

How did you choose between 7 day letter and payment plans

Answer 36

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)

Question 37

Apart from design and distance from buildings what else did you consider when the ev chargers were being installed?

Answer 37

health and safety risks
insurance risk
other tenants - did this tenant have a right to ‘build’ this within the car park

Question 38

What are the general consents around tenants and signage?

Answer 38

Often leases have ability to change signage as long as its in keeping with the corporate branding so don’t need LL approval

Question 39

Was the FM fees for the SC budget shown as a management cost or a staff cost?

Answer 39

Put under staff costs under the RICS - split them out as this is more transparant

Question 40

What are common sc exemptions?

Answer 40

marketing and promotions, seasonal decorations, security or road (industrial), not to improve if it is not necessary,

Question 41

Why are seasonal decs ?

Answer 41

If they aren’t explicitly excluded rics says they have to contribute as it is under external landscaping

Question 42

what other basis can you use for SC?

Answer 42

FLOOR areas
weighted floor areas (shopping centre e.g. debenhams)
fixed - lease specifies that tenant contributes x

Question 43

what is a sc cap and what basis?

Answer 43

cap on sc payable by tenant

fixed % increases
RPI
fixed fee
cpi index

Question 44

Why does the LL have to pay for the sc shortfall?

Answer 44

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

Question 45

what are 5 of the rics sc principles?

Question 46

if doing a sc reconcliation what do you look for?

Answer 46

See if the costs charged are in line with those that have been spent - balance the charges

Question 47

If SC consultant is witholding the entire sc monies due to an account charge?

Answer 47

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

Question 48

What would you do if you issued a balancing charge and tenants weren’t happy?

Answer 48

Issue variance report, explain why it has happened

Question 49

In the indsutrial business park what were common examples of damage/ required repair to the units?

Answer 49

• Fire risks
• Impact damage (lorries and cars)

Question 50

What were the units at industrial business park like?

Answer 50

Steel portal frame with sheet metal rooves and metal cladding to the outside

Question 51

What is a common defect of sheet metal rooves?

Answer 51

• 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

Question 52

why should you treat cut edge corrosion?

Answer 52

if it corrodes too much will get leaks in the roof

Question 53

In ethics - gesture of goodwill you suggest LL pays for the leaks. What would you have done if the ll didnt offer this?

Answer 53

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

Question 54

apart from business rates liabilities on void units what are other ll?

Answer 54

• SC for multi let estates
• Insurance