Property Management Flashcards
What does CDM stand for?
Construction (Design and Management) Regulations 2015
What is the purpose of the CDM Regulations?
Created to help control the risks related to construction, as well as to more effectively manage the people involved in a building project.
What are the 9 Principles of Prevention under the CDM Regulations?
- Avoid risks where possible
- Evaluate the risks which can’t be avoided
- Combat risks at the source
- Adapt the work to the individual
- Adapt to technical progress
- Substitute high-risk for low- or no-risk
- Develop a coherent overall prevention policy
- Give collective protective measures priority over individual protective measures
- Give appropriate instructions to workers
What are the 5 key elements of the CDM Regulations?
- Manage risks & apply the general principles of prevention
- Appoint the right people at the right time
- Provide information, instruction, training, and supervision
- Cooperate with dutyholders, and
- Consult with workers to develop effective risk management
When is a project notifiable to the HSE?
If work is scheduled to:
Last more than 30 working days,
and have more than 20 workers working
at the same time at any point;
or
It has more than 500 person days
The client must complete
an F10 form notify project to the HSE.
What are the CDM project requirements?
All projects must have:
- A Client’s Brief
- Pre-Construction Information
- Construction Phase Plan
- The right skills, knowledge, training, and
experience - Appropriate supervision, instruction and
information
Multi-contractor projects must have the above, in addition to:
- A Health & Safety File
- A Principal Designer and a Principal Contractor
Who are the key duty holders under the CDM Regulations?
- The Client
- The principle designer
- Designers
- The principle contractor
- Contractors
- Workers
What are the main duties of the Client under the CDM Regulations?
- Making suitable arrangements for managing a project: appointing other dutyholders; ensuring sufficient time and resources are allocated; ensuring that relevant information is prepared and provided to other dutyholders; the principal designer and principal contractor carry out their duties; welfare facilities are provided.
Domestic clients are in scope of CDM 2015, but their duties as a client are normally transferred to: the contractor.
What are the main duties of the principal designer under the CDM Regulations?
- Plan, manage, monitor and coordinate health and safety in the pre-construction phase of a project, including: identifying, eliminating or controlling foreseeable risks; ensuring designers carry out their duties. Prepare and provide relevant information to other dutyholders. Provide relevant information to the principal contractor to help them plan, manage, monitor and coordinate health and safety in the construction phase.
What are the main responsibilities of the Principal Contractor under the CDM Regulations?
Plan, manage, monitor and coordinate health and safety in the construction phase of a project. This includes: liaising with the client and principal designer; preparing the construction phase plan; organising cooperation between contractors and coordinating their work, ensuring that suitable site inductions are provided; take reasonable steps to prevent unauthorised site access; consult and engage workers in securing their health and safety; provide welfare facilities.
What are the main duties of workers under the CDM Regulations?
- They must: be consulted about matters which affect their health, safety and welfare; take care of their own health and safety and others who may be affected by their actions; report anything they see which is likely to endanger either their own or others’ health and safety; cooperate with their employer, fellow workers, contractors and other dutyholders.
To what projects do the CDM Regulations apply?
All construction projects defined as ‘the construction, alteration, conversion, fitting out, commissioning, renovation, repair, upkeep, decoration or other maintenance,…
de-commissioning, demolition, or dismantling of a structure’
Who produces the Pre-Construction information under the CDM Regulations?
The Client.
Who is responsible for producing the Health and Safety File under the CDM Regulations?
The Client / Principle Designer
Name 3 types of asbestos found in buildings
Chrysotile (white asbestos) is the most commonly used form of asbestos. It can be found today in the roofs, ceilings, walls and floors of homes and businesses. Manufacturers also used chrysotile asbestos in automobile brake linings, gaskets and boiler seals, and insulation for pipes, ducts and appliances.
Amosite (brown asbestos) was used most frequently in cement sheets and pipe insulation. It can also be found in insulating board, ceiling tiles and thermal insulation products.
Crocidolite (blue asbestos) was commonly used to insulate steam engines. It was also used in some spray-on coatings, pipe insulation, plastics and cement products.
Rare types include Anthophyllite, Tremolite and Actinolite.
What are the mandatory obligations of the RICS Professional Standard - Service Charges in Commercial Property?
- All expenditure that the owner and manager seek to recover must be in accordance with the terms of the lease.
- Subject to section 4.2.7, owners and managers must seek to recover no more than 100% of the proper and actual costs of the provision or supply of the services.
- Owners and managers must ensure that service charge budgets, including appropriate explanatory commentary, are issued annually to all tenants.
- Owners and managers must ensure that an approved set of service charge accounts showing a true and accurate record of the actual expenditure constituting the service charge are provided annually to all tenants.
- Owners and managers must ensure that a service charge apportionment matrix for their property is provided annually to all tenants.
- Service charge monies (including reserve and sinking funds) must be held in one or more discrete (or virtual) bank accounts.
- Interest earned on service charge accounts – or where separate accounts per property are not operated, a proper and reasonable amount of interest calculated on normal commercial rates – must be credited to the service charge account after appropriate deductions have been made.
- Where acting on behalf of a tenant, practitioners must advise their clients that if a dispute exists any service charge payment withheld by the tenant should reflect only the actual sums in dispute.
- When acting on behalf of a landlord, practitioners must advise their clients that following resolution of a dispute, any service charge that has been raised incorrectly should be adjusted to reflect the error without undue delay.
What are the Core Principles of the RICS Professional Standard - Service charges in
commercial property
- The service costs
- Allocation and apportionments
- Communication and consultation
- Duty of care
- Financial competence
- Occupier responsibilities
- Right to challenge/alternative dispute resolution (ADR)
- Timeliness
- Transparency
- Value for money
- Exclusions
What is included in the appendix of the RICS Professional Standard -Service charges in commercial property?
- Compliance checklists
- Servicer charge accounting sample reports
- Service charge handover procedures
What are the timescales in relation to service charge budgets?
- Budgets should be issued at least one month prior to commencement, and reconciled accounts issued within four months of the end of the service charge year in question.
What were your client’s long term objectives for the parade?
- Agree leases and re-let the vacant units in the parade.
- Look to sell the parade in the future
Did you notice any defects during your inspection? What was your advice to your client ahead of the lease renewal?
- Staining on the ceiling to suggest their had been a leak previously.
- Tenant advised this was not getting worse, staining appeared to be historic - in rings rather than one patch.
- mainly decoration that was required throughout the property rather than any disrepair.
- there was not significant risk to further damaging my clients building / other properties within the parade. Advised the client to seek to agree the renewal first and not raise the repair issues immediately. Tenant was already holding over at the commencement of my negotiations, going in too forcefully could have encouraged the Tenant to serve notice if they were struggling with cash flow etc during Covid. Could use this as a bargaining chip later on in negotiations to get the Tenant to agree to some of our terms. Once the Tenant had agreed that they would hold over I advised the client that we approach them and ask the Tenant to decorate the property, failing this they could serve a schedule of dilapidations / repairs notice, however, given it was only minor decoration required it is unlikely that this would be necessary.
What is the process for dealing with dilapidations?
- Advise the client that they must follow the dilapidations protocol (each party has an overriding responsibility to keep the matter out of Court)
- Appoint a surveyor to inspect the property and prepare a Schedule of Dilapidations
- Instruct a solicitor to serve the Schedule of Dilapidations (and Quantified Demand) - should be served within 56 days of the end of the lease
- parties negotiate
- Section 18 valuations under the Landlord and Tenant Act 1927 - can’t make a claim for dilaps that is greater than the diminution in value.
What is the process for serving a repairs notice?
Section 146 of the Law of Property Act 1925
Notice must:
- specify the breach complained of,
- if the breach is capable of remedy, require the leaseholder to remedy the breach, and
- in any case require the leaseholder to make compensation in money for the breach.
The leaseholder is given a reasonable time to remedy the breach.
Court proceedings cannot be commenced unless the leaseholder fails within a reasonable time to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money for the breach, to the satisfaction of the landlord.
How could you deal with repairs to a property if a Tenant had breached their repairing obligations / failed to undertake a repair.
- Serve a notice to repair (S146 Law of property act 1925)
- Forfeit the lease (if there’s a forfeiture clause)
- Serve Interim Schedule of Dilapidations
- Do works and recharge to tenant
Talk me through how your advice on Service Charge budgets for this year has been impacted by recent events.
- rise of utilities costs
- advising clients to secure contacts for 12 months rather than a long period in the hope that costs will decrease.
- consider measures that can be put in place on site to reduce energy consumption
- where it’s been necessary to increase service charge budgets I’ve obtained a minimum of 3 quotes to ensure that Tenants are getting best value.
Who produces the construction phase plan?
The principle contractor
What advice would you provide to the client if a Tenant is in breach of their lease for non-payment of rent?
- consider what the landlord is wanting to achieve and the circumstances of the tenant
- e.g. if it’s the first time that the tenant has not paid their rent then chase the tenant in the first instance
- consider writing to the tenant to advise that interest will be charged on unpaid balances if the lease allows
- forfeit the lease either by peaceful re-entry alone (bailiffs or solicitors) or forfeiture of the lease and court action
- if looking to forfeit the lease stop demanding rent to ensure this does not waive the right to forfeit.
How did you deal with pursuing the tenant at court for their outstanding arrears?
- didn’t actually go to court as the statutory time limit for a court claim for rent arrears is 6 years from the date the rent became due, advised the client that they would incur costs in the court process and therefore may be something to consider in the future if they became aware that the Tenant is good for the money.
What do you need to consider when advising the client on whether to forfeit a lease by court or by peaceful re-entry?
- Forfeiting a Lease by peaceful allows the landlord to gain back possession of the unit, however, this would not allow for any recovery of the arrears owed by the Tenant to date. This would need to be pursued separately through the courts. Could forfeit the lease by peaceful re-entry and go through court process at a later date.
- The statutory time limit for a court claim for rent arrears is 6 years from the date the rent became due so you could forfeit now and then recover arrears in the future.
- Client will be responsible for void costs from the point in which possession to the property is gained, consider the timing to forfeiture alongside any new letting of the property.
- Court process involves letter before action, tenant may dispute the charges, issuing of proceedings.
What can a tenant do if a landlord is in breach of their lease?
- Tenant should try to resolve the matter with the Landlord.
- Tenant can take legal action against them to court.
- If a leaseholder is successful on a claim for breach of the lease they can be awarded damages, a court order to force the landlord to comply with their obligations in the lease, or to carry out any particular tasks or obligations. The successful party can also try to claim the costs that they have incurred from bringing the claim.
- If the breach relates to unsatisfactory management or unreasonable service charges you could apply to the First-tier Tribunal (Property Chamber).
What should a landlord do if the Tenant makes an application to Court following the service of a Section 25 Notice?
- Notify their solicitor and complete the acknowledgement of service within 14 days.
- can either contest the claim or not contest the claim or dispute the courts jurisdiction.
What do you know about the changes to the RICS professional standards surrounding property management and agency?
RICS are working to consolidate the current guidance into three more succinct professional standards:
Current guidance =
1. Professional Statement - Real Estate Agency and Brokerage
2. Professional Statement - Real Estate Management
3. Professional Statement - UK Residential Real Estate Agency
4. Professional Statement - UK Commercial Real Estate Agency
5. Guidance Note - Commercial Property Management in England and Wales
New guidance
1. Global Property Agency and Management Professional Standards
2. UK Property Agency Professional Standards
3. UK Property Management Professional Process
What are the key principles of the RICS Professional Statement - Real Estate Management
- Conduct business in an honest, fair, transparent and
professional manner. - Carry out work with due skill, care and diligence, and
ensure that any staff employed have the necessary
skills to carry out their tasks. - Ensure that clients are provided with terms of
engagement which are fair and clear. These should
meet all legal requirements and relevant codes of
practice including reference to complaints-handling
procedures and, where it exists, an appropriate
redress scheme. - Do the utmost to avoid conflicts of interest and, where
they do arise, deal with them openly, fairly and promptly. - Not discriminate unfairly in any dealings.
- In all dealings with clients, ensure that all
communications (both financial and non-financial
subject matters) are fair, clear, timely and transparent. - Ensure that all advertising and marketing material
is honest, decent and truthful. - Ensure that all client money is held separately from
other monies in appropriately designated accounts
and is covered by adequate insurance. - Have adequate and appropriate professional
indemnity insurance or equivalent in place that
complies with the RICS Rules of Conduct. Having
proper cover is a key part of managing your risk. - Ensure that it is made clear to all parties with whom you
are dealing the scope of your obligations to each party. - Where provided as part of the service, give a
realistic assessment of the likely selling, buying or
rental price, associated cost of occupancy or of the
likely financial outcome of any issues, using best
professional judgment. - Ensure that all meetings, inspections and viewings
are carried out in accordance with the client’s lawful
and reasonable wishes, having due regard for the
security and personal safety of all parties.
What should be included in the pre-construction information?
What is included in a works order?
How did you deal with scaffolding being placed around tenants units?
How do you instruct emergency reactive maintenance works?
How would you deal with setting up a service charge budget?
What was the dispute raised by the Tenant in relation to the service charge expenditure and how did you deal with this?
How would you deal with instructing repair works in a mixed use building?
If commercial on the ground with residential uppers I would serve a Section 20 Notice on the Tenants of the residential uppers where the cost to each Tenant is £250 or more.
First stage – a notice of intention to do the works (30 day consultation process)
Second stage – notification of estimates obtained by the landlord (30 day consultation process)
Third stage – where applicable, notification of award of contract - only needed where you have chosen a contractor that was not nominated by a leaseholder AND you are not choosing the cheapest quote (provided within 21 days of entering a contract)
Can apply to the tribunal for dispensation of the Section 20 process requirements for fairly urgent works
Can apply for retrospective consent, however, not reccommended.
