Property Management Flashcards
What is an assignment of a lease?
When the new tenant has a direct relationship with the landlord (takes over the existing lease on current terms)
What is a sub-let?
When the new sub-tenant with the leaseholder and then the leaseholder continues the relationship with the landlord
What alienation clauses can leases have ? (3)
Allowing alienation (open)
Subject to some conditions (qualified)
Not allowing either (absolute)
Reasons to sub-let rather than assign?
Requirement of the lease
For part of the demise not the whole
Profit rent
If the tenant wants to reoccupy in the future
Actions undertaken when dealing with an application for assignment or sub letting?
RTL
Tenant undertaking
Effect on investment
Strength of covenant
Rent deposit
Landlord and Tenant Act 1988
To ensure that landlord deal with consents without unreasonably withholding consent
Landlord and tenant covenant act 1995
Relates to assignment of leases
Abolished probity of contract for new leases (once assigned the previous tenant is not liable for breaches)
Introduced authorised guarantee agreement (AGA)
RICS Code for leasing premises
Leases should allow tenants to assign the whole premises with consent (not to be unreasonably withheld)
Leases should allow tenants to sublet the whole premises
What insurance act covers the policyholder?
Insurance Act 2016
What rate is Insurance premium tax?
IPT IS 12%
Difference between standing order and direct debit?
Tenant sets up standing or client sets up direct debit.
Direct debit is variable rate
Standing order is set amount
Rent recovery methods?
- Court proceeding
- Rent deposit
- AGA
- Stat demand
- Commercial rent arrears recovery (CRAR)
- Forfeiture
Statutory for arrears recovery through guarantor?
Landlord and Tenant Act 1995
Landlord must serve on the guarantor a notice of what is due and that they wish to recover this from the guarantor (WITHIN 6 months of the arrears being due)
Details on CRAR?
Minimum of 7 days unpaid rent
Minimum of 7 clear days warning notice
Agents visit
2 days to follows
Re-entry by agents to seize goods
Allow 7 days before sale of goods
Can the tenant relieve forfeiture?
Tenant has the right to relief from forfeiture from the court within 6 months should the clause be rectified.
(Pineport Ltd v Grangeglen Ltd 2016)
Shows it can go beyond 6 months if alternative circumstances arise e.g debt vs asset value
What is a section 146 notice?
S.146 of the Law of Property Act 1925 is a notice issued by the landlord for when a tenant breaches a covenant in the lease.
Do landlords have the ability to repair the property themselves if the tenant does not?
Jervis V Harris 1996, allows the landlord to re-enter the property to undertake the repairs and then claim the cost back from the tenant as a debt
What governs SC?
RICS Professional Statement - Service Charges in Commercial Property 2018
RICS Professional Statement - Service Charges in Commercial Property 2018 what are the aims?
Aims to:
- improve general standard of management and administration of SC
- ensure budgets are issued one months prior to start of SC year
- reduce disputes
What is a sinking fund?
Fund formed by periodically setting money aside for the replacement of a wasting asset
What is a reserve fund?
Fund formed to meet the anticipated future costs of maintenance
Types of insolvency
Administrations
Receivership
Voluntary arrangements
Level 2 - Retail (Property management)
5-7 church street Basingstoke
- no contracts in place
- implemented new budget
- resistance to arrears
Level 3 - Letter licence
14-18 Vulcan way
Licence for temporary waiting area
Letter licence issued
