Property Management Flashcards
1
Q
What are the 2 core duties of a management surveyor?
A
- Outlines in RICS Guidance Note - Commerical Property Managment England and Wales 2011
- Collection of rent, Service Charges and other sums owing by occupiers to the landlord from the occupier
- Management of a property
2
Q
What is outlined in the RICS Guidance note for Commercial Property Management in England and Wales 2011?
A
- Guide for best practice for commercial property managers
- Focuses on how PM’s can be efficient, effective and accountable to their client and comply with law and statute
- Primary duty of care to landlord - your client
- Gives advice on key areas, including core duties of rent collection, service charges, managing buildings, H&S and procurement of third-party suppliers
- Summary of statute law and a model of terms of engagement
3
Q
Checklist for LTA
A
- Read the lease - is the landlord’s approval required for the alteration?
- Request a full set of plans and a specification
- Obtain an undertaking for the surveyors and legal costs
- All alterations need to be documented by a Licence to Alter
- Consider the long-term impact on the property - what happens if the tenant defaults?
- Consider whether a financial bond would be appropriate to be held by the landlord
- Consider reinstatement required at lease expiry
- Has the tenant got the necessary planning consent and building regulation approval?
- Check Equality Act 2010 and CDM 2015 compliance and there is a RAMS and Method Statement and a Public Liability Insurance in place for the works
- Report to the client and obtain instructions
- Instruct the Clients Lawyers to prepare Licence
- Inspect the completed works to ensure they are as agreed
4
Q
RICS Professional Statement - Real Estate Management 2016 - 12 principals
A
- Act is an honest, fair, transparent and professional manner
- Carry out work with due skill, care and diligence and ensure all staff employed have the necessary skills to carry out their task
- Ensure that clients are provided with terms of business that are fair and clear, with details of the firm’s complaints handling procedure
- Do the utmost to avoid conflicts of interests and where they do arise, deal with them openly and fairly
- Do not discriminate unfairly in any dealings
- All communications with clients are fair, decent, clear, timely and transparent
- All advertising and marketing material is honest and truthful
- Any client money is held separately and is covered by adequate insurance
- Hold appropriate PII/ errors or omissions insurance to ensure a customer does not suffer loss because of a negligent act
- Make clear the identity of your client and ensure all parties are clear of your obligations to each party
- Give realistic assessments of selling prices/rents/financial costs having regard to market evidence and using best professional judgement
- Ensure all meetings, inspections and viewings are carried out in accordance with the clients wishes having due regard to security and personal safety
5
Q
RICS Professional Statement - Service Charges in Commercial Property 2018 - 9 mandatory principals
A
- All expenditure that is being recovered must be in lease terms
- No more than 100% of the proper and actual costs of the provision or supply of services must be recovered
- Service charge accounts must show a true and accurate record of actual expenditure within the service charge provided annually to all tenants
- Apportionment matrix must be provided annually to all tenants
- service charge moneys (including reserve and sinking funds) must be held in one or or morediscrete (or virtual) bank accounts
- interest earned on service charge accounts must be credited to the service charge account after appropriate deductions have been made
- where acting on behalf of a tenant, practitioners must advice their clients that if a dispute exists any service charge payment withheld by the tenant should reflect only the actual sums of the disupuit
- when acting on behalf on the landlord, you must advise your client that following the resolution of any dispute, any service charge raised incorrectly should be adjusted to reflect the error without undue delay
6
Q
What would typical lease terms for an industrial unit be?
A
- 10 year lease
- 5 year tenants break option with 6 months notice
- 6 months rent free
- Open Market rent review in year five
7
Q
What would typical lease terms for a retail unit be?
A
8
Q
What would typical lease terms for an office be?
A
9
Q
What are some of the costs you recommended going in the service charge in Cardiff?
A
- Management Fees
- Facility Manager Fee
- Help desk/call centre
- Risk assessments and audits
- Health and safety remedial works
- security guarding
- Cleaning of common areas
- Utilities for common areas
- M&E repairs and maintenance
- External maintenance, repairs and landscaping
- Engineering and building insurance
10
Q
What cannot be recovered through the service charge?
A
Improvements
11
Q
What are the different methods of apportionment?
A
- Floor area
- Fixed Percentage
- Rateble value - difficult if these change or get appealed no longer advised
- Weighted floor area - such as a department store in a shopping centre
12
Q
How can you benchmark service charge costs?
A
Global Estate Measurement Code for Occupiers (MSCI) for commercial property occupiers
13
Q
What must be included in a rent review memo?
A
- Name of landlord and tenant
- Address of the property
- Date of the lease and rent review
-Confirmation of new rent agreed - Signed and dated by both parties
14
Q
How often should fire doors be inspected?
A
6 months - for common areas
12 months - for sole occupancy
15
Q
What is a letter licence?
A
- A licence drafted internally and approved by the landlord that documents minor alterations
- Details works to be done, reinstatement, date, property and both landlord and tenant signatures
16
Q
Why did the landlord wish to instigate service charge?
Setting a service charge budget, Cardiff
A
- they were selling the property as an investment
- were no longer going to be in possetion of a large propotion of the building
- wanted to recover costs
17
Q
Before the sale, was there any recomended works?
Setting a service charge, cardiff
A
- any improvments to the building for the sale were not put through the service charge
- service charge included sums ongoing maintence including life saftey systems, communal area energy and cleaning
18
Q
If a tenant was not paying their rent what would you do?
A
- Go to premesis to meet tenant (establish if they are trading/ minor reason for delay in payment)
- Check to see if hold a rent deposti (will have a rent deposit deed - issue is rent deposits often have to be topped up by tenant if used)
- Check the lease for a guarentor (if guarntor then pay rent they can take overididing contract)
- Serve a statutory demand
- CRAR
- Forfiture
