Property Management Flashcards
WHat is the professional statement for property management?
RICS Proff Statement on Real Estate Management 2016
What does profesional statement include??
12 principles:
-= honest and fair
- dont discriminate
- carry out work with due skill
- try and avoid COI
Provides specific advise:
- ethics - duty of care
managing RE - collection of rent
safety and security
What is the other guidence note?
RICS Commercial Property Management 2011
What does the RICS commercial property management 2011 state?
States how managers cam be effective, efficient and accountable
a guide to best practice
duty of care to the LL/ client
gives advise on rent collection, SC and managing buildings
What is the statement on Service charges?
RICS professional statement on service charges in commercial property 2018
What does RICS professional statement on service charges in commercial property 2018 state?
aims to promote best practise, fairness and transparency
what does the SC professional statement ensure? two things and how many principles
ensures budgets are sent out annually
apportionment schedules are sent out annually
9 principles
what are the 4 ways to apportion a schedule?
- fixed percentage
- rateable value
- floor area
- weighted floor area
Talk me through your balancing SC example
- received an invoice for balancing SC
- requested the recon report
- asked the LL as to why there had been a significant increase in costs compared to the previous year?
- requested a breakdown of the costs
- apportionment schedule was wrong.
- requested an up to date schedule
new schedule was correct and I approved the invoice.
Talk me through the break option you dealt with?
- client wanted to serve their break notice.
- providing not less than 3 months written notice.
- reviewed the break terms in the lease
- must pay full quarters rent and SC
- I made sure that the stepped rental increase was accounted for
- following solicitors advice, I also advised that a SC contingency payment is made
- LL refunded the money and the break clause was exercised.
What are the quartely payment dates
24th March, 25th June, 29th September, 25th December
Talk me through your sub-tenant arrears log
- property was sub-let
- requested arrears log from our accounts team
- T was paying incorrect amount following a RR increase
- provided a SOA to the tenant
- established what legal action could be taken against the sub tenant
- there was no rent deposit
- recommended a payment plan to pay back the money over a 3 month period
What is alienation?
When a tenant can assign or sub-let a lease
What are the main reasons to sub-let over assign?
- requirement of the lease
- to sub-let part of the demise and not the whole
- if the tenant wants to re-occupy in the future
- if MR is greater than the PR = profit.
Talk to me about rent arrears?
always read the lease
interest is normally between 2-4% - 7-14 days following rent payment date
always seek legal advice
What are the ways to recover the rent and talk about each?
- rent deposit
- court proceedings - costly, timely, usually scares them into paying
- approach the guarantor or former tenant - check if AGA is in place
- Commercial Rent Arrears Recovery Scheme - enforcement agents can enter and take possessions and sell them. Certain time frames.
- Forfeiture - landlord can repossess the property, and peacefully re enter the property or court proceedings. procedure must be followed and relief offered to the tenant.
What lease events are important to property managers?
- rent terms
- break clauses
- Service charge clauses
- Repairs
I see you are aware of the commercial property management guidence note 2015, can you state how you use this?
I have never had to refer to the guidence not, but I believe it is there so that managers can be efficient, effective.
Gives guidance on managing buildings, rent collection and service charges
What remedies did you have for your sub-tenant arrears?
- I installed a payment plan with the sub-tenant having agreed with the client.
- Other options include; rent deposit taking, taking money from guarentor, CRARS, forfeiture, court proceedings.
No deposit for the property.
What was the repairing liability of your building with the leak?
IRI lease
what is an effective FRI lease?
Liable for repairs on the whole property as stated in the lease. But the tenant pays the LL a service charge.
What happens when you get the money for client accounts?
client accounts must be kept separately
the word client must be listed on the bank account
clients must have their money on demand
annual audit and reporting obligations by certified accountant
is the professional statement on handling clients money?
RICS proff statement on client money handling 2019
What are the six main areas set out in the professional statement for client money?
- holding client money
- providing info to clients
- receipts of client money
- payments from client accounts
- accounting records and controls
- compliance
