Property Management Flashcards

Question

What is privity of contract?

Answer 1

Privity of contract is a common law doctrine which provides that you cannot either enforce the benefit of or be liable for any obligation under a contract to which you are not a party. The underlying premise is that only parties to a contract can sue or be sued under it.

Answer 2

An absolute covenant prohibits alienation absolutely. A qualified covenant prohibits save with the landlord’s consent. A fully qualified covenant (the most common) says that what is prohibited may only take place with the landlord’s consent, which must not be unreasonably withheld.

Answer 3

Insolvency Act 2010 5 types: 1. Administration 2. Company & Voluntary agreement 3. Receivership 4. Voluntary liquidation 5. Bankruptcy

Answer 4

1. Acting as agent for the landlord - landlord has ultimate responsibility 2. Managing third party suppliers - i.e security not necessarily doing everything but by managing others to do so 3. Duty of Care - to the landlord primarily, but also to tenants ( commercial and reputational duties )

Answer 5

A liability cap is a contractual agreement that a client can only claim damages up to the amount agreed, even if the law would otherwise award a greater sum in damages.

Answer 6

• In assignment the assignee / new tenant has a direct relationship with the landlord (contract). • In subletting, the sub tenant has a direct relationship with the tenant and pays them the rent, who then pays the rent to the landlord.

Answer 7

• To protect the parties at rent review and at dilapidations. • Acts as a record of the work that has been completed.

Answer 8

• Service charge budget agreed with the tenant prior to the service charge year. • Quarterly billings based on this. • Annual accounts prepared at the year end. • Balancing payment made at the end of the year upon the presentation of audited accounts. • Service Charge reconciliation provided to tenants with information as to how the money has been spent / explanation of any unexpected costs

Answer 9

• Record of the state of repair and condition of a property before a tenant occupies. • Agreed by negotiation prior to the lease commencement • Recorded with supporting photographs and notes/ plans. • Often contained in the lease • Limited the tenants repairing obligation in respect of agreed items of disrepair for the duration of the lease.

Answer 10

• Dilapidations can be served throughout the lease term. • Interim schedule – served by the landlord or tenant during the lease with at least 3 years remaining. • Terminal schedule – served normally in the last 3 years on the lease. • Final schedule – served at or after the lease expiry or break clause date when the tenant is out of occupation and the landlord wants to agree a claim for damages.

Answer 11

Follow RICS GN planned preventative maintenance 1st edition 1. Obtain client scope of service 2. Gather detail and information on the property 3. Inspect 4. Report KEY is the PPM schedule spreadsheet contained within the report, which will outline: condition > Good - Hazardous timeframe over years > Urgent to long term

Answer 12

• Prohibited landlords from forfeiting a business tenancy for non payment of rent or other sum between 25 March 2020 and 25 March 2022. • The Taking Control of Goods and Certification of Enforcement Agents (Amendment) (Coronavirus) Regulations 2020 prevented landlords from using CRAR unless an mount of at least 90 days rent was due. • This was increased to 366 days rent from 25th December 2020 and up to 554 days rent arrears for enforcement notices served from 24th June 2021

Answer 13

1 All expenditure MUST be in accordance with the terms of the lease. 2 Recover no more than 100% of the proper and actual costs. 3 Budgets & explanatory commentary, are issued annually. 4 Service charge accounts showing a true and accurate record are provided annually to all tenants. 5 A service charge apportionment matrix for their property is provided annually. 6 Service charge monies held in one or more discrete (or virtual) bank accounts. 7 Interest earned on service charge accounts must be credited to the service charge account. 8 Disputes advice to tenant = only the actual sums in dispute. 9 Must advise clients that following resolution of a dispute, adjusted to reflect the error without undue delay.

Answer 14

Would affect the character of the property Where all recommendations have been completed and still not enough If savings are not paid back within 7 years Decrease property price by 5% or more

Answer 15

Reactive - repair emergencies Planned - regular condition schedule checks Cost reduction - utility switching

Answer 16

1. Visit tenant on site to discuss 2. Seek a payment plan 3. Failing this check if there is a AGA, Guarantor, former tenant. 4. Serve a S17 on the guarantor 5. No guarantor? consider a Statutory demand 6. Consider a surrender 7. Forfeiture

Answer 17

- Granting of new leases must be E or higher. - From April 1 2023 this will include existing leases too

Answer 18

- Government Proposed - C by 2027 - B from 2030.

Answer 19

- Amends the Regulatory Reform (Fire Safety) Order 2005 - Places a legal obligation on the designated responsible person to commission a fire risk assessment (FRA) that includes the external walls of a building and fire doors to individual flats. - Fire and rescue authorities have enforcement powers to hold owners or managers to account.

Answer 20

Breaches of lease covenants that relate to the condition of a property during the term of the tenancy or when the lease ends.

Answer 21

1 Conduct business in an honest, fair, transparent and professional manner. 2 Carry out work with due skill, care and diligence. 3 Ensure that clients are provided with terms of engagement which are fair and clear. 4 Do the utmost to avoid conflicts of interest. 5 Not discriminate unfairly in any dealings.