Property Management Flashcards
What is an easement?
In UK property law, an easement is a right that one person has to use or enjoy another person’s land for a specific purpose. An easement is a type of legal agreement that allows one person (the “beneficiary”) to use another person’s land (the “servient land”) for a particular purpose, without actually owning the land.
Common examples of easements include:
Right of way: This allows someone to cross another person’s land to access their own property.
Right to light: This allows someone to enjoy natural light entering their property from a particular direction, even if it means that their neighbor’s building obstructs the light.
Right to park: This allows someone to park their car on someone else’s land.
Right to access: This allows someone to access a shared space, such as a driveway or communal garden.
Easements can be created in a number of ways, such as by express agreement, by implication, or by prescription (i.e., through long use).
Easements can be beneficial for both the beneficiary and the owner of the servient land, as they can allow for greater use and enjoyment of the property without having to purchase additional land.
How did you advise your Client on dilapidations in your case study?
- RTL: this lease was FRI due to nature of railway arches
- No Schedule of Condition on file. Tenant had been in occupation for more than 20 years
- Property was kept in good condition
- Advised to carry out an Interim Schedule of Dilapidations, but for the claim to be rolled over until the end of the next lease granted
Followed the RICS G/N on Dilapidations, 2016 by instructed a chartered building surveyor who would give out professional expression on value of claims
What liability does a landlord have in an IRI lease?
FRI lease => more favourable to landlords, as they shift most of the maintenance and repair costs onto the tenant.
Tenant is responsible for all repairs and maintenance to the property, including the structure and exterior of the building, as well as any fixtures and fittings. The tenant is also responsible for arranging and paying for insurance for the property.
IRI lease => more favourable to tenant.
The tenant is responsible for repairing and maintaining the interior of the property, such as the walls, floors, and internal fixtures, BUT not the structure of the building or exterior. The landlord is responsible for these external repairs and maintenance, and also arranges and pays for insurance for the property.
in an Internal Repairs and Insurance lease, is the landlord responsible for repairing or broken windows?
In an IRI lease, the landlord is generally responsible for repairs to the exterior of the building, including the windows, unless the damage was caused by the tenant’s negligence or lack of maintenance. In such cases, the landlord may be able to recover the cost of repairs from the tenant.
It is important to note, however, that the terms of an IRI lease can vary depending on the specific agreement between the landlord and tenant. The lease may include specific provisions outlining the responsibility for repairs and maintenance, including any exceptions or conditions under which the tenant may be responsible for repairs.
If the tenant is responsible for the cost of repairs to the windows, the landlord may be able to deduct the cost of the repairs from the tenant’s security deposit, or seek reimbursement from the tenant through other means.
However, if the terms of the lease do not clearly place responsibility for the repairs on the tenant, it may be more difficult for the landlord to recover these costs.
What are the landlord’s options to deal with a tenant not repairing their property?
FOUR OPTIONS
- Serve a s.146 notice (Law of Property Act 1925)
- detailing the repairing or decorating breach which has occurred
- timescales allowed to remedy the breach
- a course of action proposed of the tenant fails to remedy the breach - Forfeit the lease
- either serve a s.146 (if excluded from LTA 1954), or serve a hostile s.25 on the grounds of s.30(1)(a) (for Protected leases)
- if s.146, the tenant must be given reasonable time to undertake the works - Serve an interim Schedule of Dilapidations
- instruct a building surveyor - Landlord entry to carry out works
- leading case: Jervis v Harris (1996) where landlord could enter the property to carry out repairs and could recoup the cost through debt (rather than ‘damages’ - it was NOT a claim for compensation for the breach of the tenant’s covenant to repair, but reimbursement of the sum by the landlord)
- this gives LL the right to pursue an effective remedy against defaulting tenants, to ensure that premises are kept in good repair for the duration of the term of the lease
Give me example of strategic advice your gave your client, and your recommendations?
Case study examples
1. alienation with AGA,
2. rent arrears recovery through a payment plan
What are your takeaways from P/S Real Estate Management 2016?
Property manager has two core duties:
1) collection of rent and other sums
2) management of the property
What are the steps you’d take for non payment of rent?
Covid-time moratorium prevented landlords from using CRAR to collect arrears
Always first Make contact with tenant to understand their position, in order to advise your client. This will tell you about their activity
Recourse:
1. Check to see if there’s a rent deposit
2. Check for guarantor (s.17 notice of the Landlord and Tenant Covenants Act 1995, within a 6 months period)
3.
How would you go about advising your Client on Service Charge matters?
P/S of Service Charge 2019
Provides standardisation across industry and help to resolve disputes
Mandatory obligations:
1. Recover no more than 100% of the cost
2. Budgets must be issued annually to all tenants
3. Signed statement must be provided annually
4. All interest earned on SC accounts must be given to tenant
Client money
- In separate account
- Available on demand
- Bank account is titled as the name of the firm and the word client
- Advised client in writing
- Obtained written consent to obtain interest
What is dilapidations
Dilaps entitles the landlord to obtain the property back in the same condition as it was handed over to the tenant
- Is the lease FRI?
- Does the lease have a schedule of condition?
Once SoD is served the landlord and tenant can agree for the tenant to carry out the work, or to pay the landlord the dilapidations claim
Claim is based on the cost of the works (or the diminution in value) according to the s.18 of the L&T Act 1927
What are the 3 forms of dilapidations schedules?
Interim
At least 3 years remaining
Lease needs to be min of 7 years
Terminal
Served within last 3 years
Final
At lease expiry or after a tenant has vacated
What is tenant insolvency?
- Going in administration. An administration deals with the assets of the company
- Receivership/liquidation. Receiver will sell assets to pay off debts
- Company Voluntary Adminstration. Company can enter into CVA when insolvent but they think company can pay their debts. They can go in this if 75% of creditors agree
What to do if tenant is insolvent?
- Check the lease for deposit/guarantor
- Contact adminstrator and make a claim for arrears
- Do not take the keys back to avoid a surrender of the lease (you can keep it locked)
What are your client’s responsibilities regarding insurance?
Depends if FRI or IRI lease
For our tenants, we give out IRI lease and re-charge insurance
What are tenants responsible for in an IRI lease?
You are required to carry out minor repairs internal to your property, including:
* Electrical fittings and wiring within your premises
* Plumbing (including appliances supplied by you)
* Individual heaters, heating systems and hot water appliances previously installed by us and exclusively serving your premises
* Intruder alarm systems you have either inherited or installed
Roller shutters you have either inherited or installed
* Internal decorations, including painting of wall finishes
* Replacement of floor finishes
* Replacement of any internal cracked or broken glass
* Letter boxes, flaps, door knockers and doorbells, door locks, latches and bolts
* Kitchen cupboard door handles, catches and hinges
* Kitchen drawer handles
* Plugs and chains to sinks, washhand basins and baths
* Hat and coat rails and hooks
* Pull chain or cord to high level toilet flushing cistern
* Any fire grates, surrounds and bars
* Electric plugs (but excluding plug sockets)
* Draught-proofing of doors and windows
* Plasterwork inside your unit
* Shop front and entrance door, unless it is a communal door shared with other customers
* Basins, sinks, baths, toilets and cisterns within your premises
* Waste pipes, overflows and other plumbing serving your premises
You must take reasonable care of the property and report any repairs to us.
You should inform us of any damage to your property caused by neglect or negligence by you or a visitor.
