PE Property Management Flashcards
What is the key RICS guidance for property management?
> Commercial property management in England and Wales 2nd edition, Guidance Note
> Real estate management 3rd edition, Professional Statement
> Service charges in commercial property 1st edition, Professional Statement
Which of these are statutory obligations for a property manager to be aware of?
> Asbestos management
Business rates
Contamination
Equality Act 2010
EPCs and MEES
Fire Safety
H&S
Legionnaire’s disease
Occupiers’ liability
PAT testing
Planning
Waste management
What does the Cost of Leases Act 1958 say?
Unless agreed in writing, a party to a lease is under no obligation to pay all or part of other party’s costs, i.e. each party pays their own costs
Which of these are the current English quarter days?
25 March, 24 June, 29 September and 25 December (MJSD)
When invoicing for rent, what should you check for?
> Timing of payments
Interest on arrears
VAT position
If service charge is reserved as rent
Circumstances where rent should not be accepted
When might you not recommend accepting a rent payment?
> To avoid waiving right to forfeit
Where an outside Act lease has expired as it may create security of tenure
What are the warning signs for rent arrears?
> Bounced cheques
Tenant ceased trading
Persistent late payment
Arrival of post-dated cheques
What is a remedy for a rental default?
> Payment plan
Court proceedings
Use rent deposit
Pursue former tenant(s)/guarantor(s)
Statutory demand
CRAR
Forfeiture
What type of notice can be used to pursue a former tenant or guarantor?
> Section 17 - Landlord & Tenant (Covenants) Act 1995
What is the timescale for a Section 17 notice to be served?
> 6 months
What is the limit of debt for a statutory demand to be issued?
> £750
When did CRAR come into force and what did it abolish?
CRAR came into force in April 2014 and it abolished the Common Law of Distress (Distraint)
What sums can it not be used for?
> Service Charge
Insurance
How long does the rent need to have been outstanding for to use CRAR?
7 days
Can an enforcement agent enter through a window?
No - only an open/unlocked door
Can forfeiture be implied?
No - it must be an express provision in a lease
What is the effect of forfeiture?
A landlord can re-enter and gain posession for breach of lease
What RICS guidance relates to service charges?
Service charges in commercial property, Professional Statement - 1st edition (September 2018) - effective from 1 April 2019
What is the main change in the new Professional Statement?
Mandatory not just best practice
What should service charges be?
Not for profit, not for loss
Can the RICS Service Charge Professional Statement override the terms of a lease?
No - but it can be used to interpret a lease
What information must be provided to tenants if a service charge is operated?
> Service charge budgets, including appropriate explanatory commentary (annually)
Approved set of service charge accounts (annually)
Service charge apportionment matrix (annually)
If a dispute exists, what sums can a tenant withhold?
Only service charge sums in dispute
What is an accrual?
Expenses incurred in a period for which no invoice has been received at the period end
What is a balancing charge?
Difference between an individual tenant’s apportionment of expenditure and on-account service charges demanded for an accounting period
What is an on-account service charge?
An estimated charge raised in advance and anticipation of the final service charge liability, calculated from the service charge budget
What does PPM stand for?
Planned preventative maintenance
What is PPM? (Planned Preventative Maintenance)
Maintenance performed purposely and regularly to keep the fabric, facilities, plant and equipment of a building on satisfactory operating condition
How often is a PPM usually prepared?
5-10 years in advance, but reviewed and updated regularly
What is the purpose of a reserve fund?
To meet anticipated future costs of maintenance and upkeep in order to avoid fluctuations in the amount of service charge payable each year
What is the purpose of a sinking fund?
To periodically set aside money for the replacement of a wasting asset
What does SICC stand for?
Standard Industry Cost Classifications
Why might an occupier decide to sublet rather than assign a lease?
> Requirement of the lease
Relates to part not whole of the demise
If there is a profit rent
If the tenant might want to re-occupy in the future
What duty does the Landlord & Tenant 1988 impose on a landlord?
To deal with consents diligently and within a reasonable time
When did the Landlord & Tenant (Covenants) Act 1995 come into force?
1 January 1996
What did the Landlord & Tenant (Covenants) Act 1995 abolish?
Privity of contract
What is the position in an ‘old’ pre 1 January 1996 lease?
Original tenant remains liable until expiry
What should you request if considering a tenant’s application to alter?
> Full plans and specification (in line with the terms of the lease)
Undertaking for surveyor’s and legal costs
Whether planning permission or Building Regulations approval is required
Compliance with legislation, eg. Equality Act 2010 and CDM 2015
Risk Assessment & Method Statement (RAMS)
Finance bond held by the landlord (if approp)
What does a breach of repairing covenant require?
Both disrepair and an obligation to repair
What is the effect of a Section 146 Law of Property Act 1925 notice?
Served on the tenant during the lease to remedy a specific repairing or decorating breach
What is the impact of a Jervis v Harris clause?
Express right for a landlord to enter, carry out repairs and recover the cover from the tenant as debt, not damages
What is the impact of the Leasehold (Property) Repairs Act 1938?
Protects tenants by limiting a landlord’s right to claim damages or forfeiture for disrepair during a tenancy
What does the 1938 Act apply to?
Leases over 7 years with more than 3 years to run
What is a Schedule of Condition?
Limits a tenant’s repairing liability in respect of agreed itmes of disrepair during a lease
What is the basis of a typical full insuring clause?
Landlord insures, tenant reimburses
What is an insured risk?
Risks that a landlord is obligated to insure against
What happens if a property is damaged by an uninsured risk?
> Tenant responsible for remedying damage under repairing obligations, unless this is limited under the lease
> Tenant continues to pay rent, despite the building being damanged and being potentially uninhabitable
What are typical examples of uninsured risks?
> Flooding
Terrorism
Subsidence
Heave
