Property management

Question 1

Tell me about your responsibilities for occupied/vacant buildings/communal areas.

Answer 1

repairs, compliance, health and safety

Question 2

What is the Occupiers Liability Act 1957/1984?

Answer 2

imposes a common duty of care on occupiers to lawful visitors. By virtue of s.1 (3) (a), the Act applies not only to land and buildings but also extends to fixed and movable structures, including any vessel, vehicle or aircraft.

Question 3

How do these impact upon your role?

Question 4

Tell me about the RICS guidance on Service Charges/Real Estate Management/Commercial Property Management.

Question 5

Are you aware of any additional RICS guidance on Service Charges?

Question 6

Tell me about the relationship between alienation/alterations/repair/payment of rent
and service charge on property management.

Question 7

What is the rule of privity of contract?

Answer 7

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

Question 8

What is the difference between an absolute/qualified/fully qualified covenant?

Answer 8

Fully Qualified Covenant
A fully qualified covenant is the most favourable Licence for Alterations covenant within a leaseholder’s lease. The covenant will ensure that the leaseholder is able to undertake their planned works, with those works and permissions not being unreasonably withheld by their freeholder.

Qualified Covenant
A Qualified Covenant is similar to a Fully Qualified Covenant, albeit the key distinct difference is that the freeholder doesn’t need to provide their permission and consent for the leaseholder’s proposals. In fact, the consent can very much be refused, conditional, or even subject to a premium or levy payable to the freeholder.

Absolute Covenant
As per the title of this blog post, an Absolute Covenant is the least favourable form of alterations covenant that a leaseholder can find within their lease. The covenant itself is highly restrictive and will effectively set out that the leaseholder cannot undertake their proposed alterations works.

Question 9

What is the statutory duty placed on landlords under the Landlord & Tenant Act
1927/1988?

Question 10

What remedies are available to landlords for breach of repairs?

Answer 10

Section 18 (1) of the LTA 1927 states that damages available to the landlord for the tenant’s breach of repair covenants are limited to the diminution in the value of reversion caused by the tenant’s breach – whether that claim is brought during the lease or upon its expiry.

Question 11

What are the remedies for rent default?

Question 12

What are the main rent arrears recovery options for landlords?

Question 13

What are the various forms of corporate insolvency?

Answer 13

Bankruptcy
Individual Voluntary Arrangement (IVA)
Company Voluntary Arrangement (CVA)
Compulsory Liquidation
Creditors’ Voluntary Liquidation (CVL)
Administration

Question 14

Talk me through your understanding of the Corporate Manslaughter and Corporate
Homicide Act 2007.

Answer 14

companies and organisations can be found guilty of corporate manslaughter as a result of serious management failures resulting in a gross breach of a duty of care.

Question 15

What are your duties under the Act?

Answer 15

A duty of care exists for example in respect of the systems of work and equipment used by
employees, the condition of worksites and other premises occupied by an organisation and
in relation to products or services supplied to customers.

Question 16

What are the offences and penalties under the Act?

Answer 16

An organisation guilty of the offence will be liable to an unlimited fine. The Act also
provides for courts to impose a publicity order, requiring the organisation to publicise
details of its conviction and fine. This will be commenced at a later date when sentencing
guidelines are available (expected in autumn 2008). Courts may also require an
organisation to take steps to address the failures behind the death (a remedial order).

Question 17

How would you hand over a service charge account upon sale or change of manager?

Answer 17

When the lease is assigned, your solicitor will fix the service charges based on the date of sale - assignment - and claim a proportion from the buyer. The buyer will be responsible for the following quarterly or annual invoice and any subsequent invoices.

Remember that service charges are first issued as estimates. At the end of each accounting period - after 31 March - an ‘actual’ charge will be issued. This can be lower or higher than the estimated charge.

The person who is the leaseholder of the property on the date the summary notice of the actual or final service charge account is issued, usually by the 30 September, is responsible for payment of the deficit or excess charge. They will also get any credit on the actual service charge account.

Question 18

Tell me about any RICS guidance you are aware of relating to licences for alterations.

Answer 18

Licence for alterations in commercial property

Question 19

What is the process of considering a tenant’s application to alter?

Answer 19

Check the lease
ascertain cost liability

Question 20

What protection does a licence to alter provide?

Answer 20

Licences to alter are designed to protect your (the landlords) interest in a tenanted property so that damaging alterations which could diminish the property’s value are not carried out.

Question 21

How should an application be submitted?

Answer 21

The tenant will need to do all the preparation work to submit designs and specifications.

Question 22

What is a cost undertaking?

Answer 22

is a letter of undertaking from a law firm acting for a tenant to pay the costs of the landlord’s solicitors, managing agents and surveyors in connection with a licence.

Question 23

What would you look for in the lease if you received an application?

Answer 23

alterations clause in the lease

Question 24

What are improvements under the LTA 1927?

Answer 24

LTA 1927, s 19 (2) permits the landlord to require, as a condition of granting consent: * payment of a reasonable sum for damage to or diminution in the value of the property, or of any neighbouring property, owned by the landlord

Question 25

How does this impact upon landlord’s consent?

Question 26

What is an improvement?

Question 27

What does not to be unreasonably withheld mean?

Answer 27

Reasonableness has to be given a broad, common sense meaning. It requires a reasonable process, which means a party must take into account considerations which have a legitimate purpose and disregard irrelevant considerations. It also requires a rational outcome.