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Commercial Real Estate 2023 > Property Management > Flashcards

Property Management Flashcards

1
Q

What RICS guidance is there on service charges?

A

RICS PS on Service Charges in Commercial Prop 2019

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2
Q

can an owner profit from service charges?

A

No

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3
Q
  1. How would you prepare a service charge for a client?
A

Procure all landlord services in the lease in a best value for money fashion, not the cheapest services.
-Budget to be agreed with tenant prior to the commencement of year.
-annual accounts prepared at year end.
-balancing payment made at the end of the year upon presenting audited accounts.

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4
Q

What happens to interest on SC accounts?

A

Must be credited to account

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5
Q

How are management fees for SC calculated?

A

fixed fee

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6
Q

how is service charge apportioned?

A

usually psf
rateable value
fixed percentage
weighted floor area

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7
Q

what is a sinking fund?

A

For replacement of a wasting asset, ie a lift.

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8
Q

what is a reserve fund?

A

For meeting the anticipated costs, of maintenance.

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9
Q

Are there time restrictions on sending the service charge budgets to the tenants?

A

budgets need to be sent one month in advance

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10
Q

When did RICS Pro Statement on Service Charges become effective?

A

2019

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11
Q

Can you name some uninsured risks?

A

flood risk

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12
Q

why do you need a RCA?

A

to insure the property against full cost of rebuild in the case of damage, equal too the previous building.

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13
Q

where can you find the insured risks?

A

In the lease

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14
Q

how is insurance organised and paid?

A

landlord insures and charges to tenant normally by way of insurance rent.

Insurance rent to cover the cost of BUILDING INSURANCE proportion to tenant.

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15
Q

what are the english quarter days?

A

25 march, 24 june, 29 sept, christmas day

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16
Q

what is a schedule of condition? when would you use one?

A

attached to lease with photos and text to limit TENANTS repairing obligations upon yield up

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17
Q

How would you deal with the management of an empty property?

A
  • arrange insurance telling them its empty
    -cut off power, turn radiators to frost.
    -inform local authority for payment of empty rates
    -think about security
    -maintain asbestos register
    -remove flammable material
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18
Q

what floor area basis are RCA’s calculated

A

normally GIA in line with BCIS

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19
Q

would you collect rent on a tenant holding over?

A

no, could create security of tenure

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20
Q

what law deals with insurance?

A

Insurance Act 2016

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21
Q

What are the two main purposes of a license to alter?

A

protect parties at rent review, protect parties at dilaps

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22
Q

what is that main legislation relating to applications for alterations? and what does it say?

A

Landlord and Tenant Act 1927, specifies under leases landlords cannot unreasonably withhold consent for improvements

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23
Q

can you tell me about a time that you have advised a client in relation to a request for alterations?

A
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24
Q

is there any RICS guidance that deals with alterations?

A

RICS guidance note on alterations 2013

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25
Q

What insurance should a building have?

A

Insurance against damage, including loss of rent. And public liability insurance

26
Q

How should a property manager manage contracts with third party suppliers?

A

Contract would be between landlord and tenant. PM to ensure they hold a copy, and are stated at agent to landlord.

27
Q

What should a property manager do when landlord stops paying rent.

A

Notify landlord immediately and discuss sensible approach forward.

28
Q

When was the most recent business rates valuation?

A

April 23 based on RV from April 21

29
Q

What other things to property managers do?

A

Rent reviews
Disposal strategy’s
Dilaps advice

30
Q

Can you talk me through your service charge example?

A
  • Service charge for a multi-let asset of three tenants.
    -I read each of the leases to find out what the services were.
    -I prepared a budget using the costs from a pre-procured service provider.
    -I apportioned these for each tenant and sent the budget and apportionment schedule to the tenant ahead of the service charge year.
  • As the draft budget exceeded the ‘maxmimum’ cost I applied the RPI multiplier.
    -I advised the landlord they would need to make up the shortfall.
31
Q

Why might a landlord want to restrict alterations?

A

-maintain investment value
-maintain rental value
-leave themselves liable to building regs
- could harm structural integrity

32
Q

what dispute resolutions are recommended for service charge?

A

independent expert
mediation

33
Q

What is a service charge shortfall?

A

can occur if landlord has voids, or cannot recover 100% of the cost, or it is capped.

34
Q

When would rent be overdue?

A

Anything after the payment date.

35
Q

How could you advise an occupier in relation to service charges?

A

Advise them to request an index linked cap.

36
Q

What legal regulation is there any relation to service charges?

A

None

37
Q

what is the difference between direct debit and standing order?

A

direct debit is money going out controlled by the service provider, is notified and can be cancelled

standing order is money going out controlled by you.

38
Q

How should a property manager deal with rent deposits?

A

As per the rent deposit deed, usually in a separate interest bearing account.

39
Q

when would it be reasonable to withhold consent for tenant alterations?

A

lowers value, prohibited in lease, failed repairing covenant.

40
Q

What did CRAR replace?

A

Ancient law of distress

41
Q

How would you CRAR someone

A

After 7 days unpaid rent, you give 7 days notice of CRARing. Then the enforcement officer does inventory. 2 clear days follow. Then seize goods. Then allow 7 days before sale.

42
Q

Explain privity of contract?

A

For leases before 1996, the original tenant no matter how many assignments was always on the hook.

43
Q

How would you use a rent deposit?

A

Landlord draws down on it and tenant tops it up.

44
Q

How would you use an AGA

A

If arrears are less than six months old, if lease has been assigned could claim from previous tenant. Although they have a right to ask for overriding lease.

45
Q

How long is empty rate relief for shops and offices?

A

3 months

46
Q

How long is empty rate relief for industrial?

A

6 months

47
Q

What property’s can you not CRAR?

A

Anything with resi in it

48
Q

What goods can you not CRAR

A

anything essential to the landlords running of a business, or is on a finance plan.

49
Q

What are dilapidations?

A

when a tenant doesn’t uphold their repairing covenant in the lease.

50
Q

how are dilaps claims calculated?

A

either the diminution value of the property (difference in value of the property upon possession had it not been in good repair) OR cost of the works.

51
Q

What if the landlord proposes redevelopment?

A

the value of reversion would be nil, no dilaps.

52
Q

What are the three schedules of dilaps?

A

interim- with at least three years of lease remaining.
terminal- less than three years.
final- at end of lease, or at the break.

53
Q

How does a Stat demand work?

A

Serve on tenant if the level of arrears is known, then they have 21days to pay. then the landlord can present a winding up petition if the company still hasn’t paid.

54
Q

Was there any special relief for tenants during covid?

A

Commercial Rent (coronavirus) act 2022, which stopped landlords pursuing tenants for any debts which fell in the ring fenced period.

55
Q

would you advise a client in relation to dilapidations?

A

No I would always advise my client that they sought the advice of a building surveyor.

56
Q

What are the four remedies for breach of repair?

A
  • Section 146 notice under the Law of Property Act 1925
  • Forfeiture, also section 146 notice in the lease.
    -Jervis and Harris clause- landlord can undertake the works and reclaim the cost as debt.
    -Serve interim schedule of dilaps if three years left on the lease
57
Q

What does the Real Estate Management Professional Statement say in essence?

A

Underpins the mandatory ethical behaviours of a property manager.

58
Q

what does the service charge professional statement do?

A

Sets out mandatory best practice for the administration of service charges?

59
Q

What can you tell me about Professional Statement on Real Estate Management 2016

A

Underpins the principles and ethics of a property manager?

60
Q

Can you tell me how you abide by the principles set out in the real estate management statement?

A

-acting fairly
-avoiding conflicts
-providing terms of business.
-making sure meetings and inspections are carried out in accordance with client wishes.
-client money separately held.
-hold PII cover.
- give realistic assessments of costs

61
Q

Can you tell me about the Property Management Guidance note?

A

Gives guidance on beat practice in property management in CONJUNCTION with client money statement, and service charges.

Commercial Real Estate 2023 (13 decks)

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