Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

APC Revision > Property Management > Flashcards

Property Management Flashcards

1
Q

What guides commercial property management?

A

RICS Guidance note: Commercial Property Management in England Wales. 2nd Edition. Effective Oct 2011

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What does Commercial Property Management 2nd Edition Eff October 2011 contain?

A

3 Key principles - acting as agent of the landlord, managing third party suppliers, duty of care
4 Property Managers core duties - liaising and reporting with landlord, collection of moneyed, client accounts, defaulting occupiers, service charges, deposits, managing the building, management policies, insurance, occupier liaison, energy management, building management systems, health and safety, procurement, management fees
5 Additional responsibilities of the property manager
6 Landlord responsibilities to the property manager
7 Employees and employment law
8 Specialist issues - managing a portfolio, mixed use developments, offshore ownership, duty of care deeds, insolvent landlord and LPA receivers
Appendix
1 - Main English legislation relevant to the management of a commercial property
2 - Property management contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What to do with service charge funds?

A

Keep monies in separate service charge account with transparent record of income and expenditure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is TUPE?

A

Transfer of Undertakings (Protection of Employment) Regulations 2006

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the Occupiers Liability Act 1957?

A

Section 7 - Act imposing duty of care on persons occupying or in control of any premises in relation to visitors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is Occupiers Liability Act 1984?

A

Duty on the occupier of a premises to any persons other than visitors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the Electricity at Work Regulations 1989?

A

Regulation imposing duty of employers to carry out PAT testing

Every employer and employee to ensure safety in the workplace regarding electric

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the Control of Asbestos Regulation 2006?

A

Obligations on duty holder to assess whether or not asbestos is present in the premises

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is Regulatory Reform (Fire Safety) Order 2005?

A

Improve responsibly on employers to create a safety working environment

Responsible person

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is Gas safety (Installation and Use) Regulations 1998?

A

Duty of employer to take reasonable steps to ensure that person undertaking work is approved under HSE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is the Landlord and Tenant Act 1988?

A

Duties on the landlord regarding assign, underlet, charge or part with possession

Occupier requires landlord consent not unreasonably withheld

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the requirements of Energy Performance of Buildings (Certificates and Inspections) Regulations 2007?

A

Duty to present occupier with EPC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the Disability Discrimination Act 1995 and 2005?

A

Not to discriminate against disabled persons

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the 4’Ps?

A

Price
Place
Promotion
People

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Detail main landlord and tenant function

A

Read lease
Handle lettings
Rent review
Lease renewals
Alienation
Subletting
Dilapidations
Appoint landlord and tenant surveyor
Code of Leasing Business Premises 2007

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Outline function of agency?

A

As per leasing and letting
7 chapters of UK Commercial Real Estate Agency 1st edition Oct 2016
1 Scope
2 Standards and ethics
3 Securing Instructions
4 Disposals: marketing the property
5 Implementing the disposal
6 Acquisitions
7 Ending the instruction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Types of maintenance

A

Reactive = repair of a leak

Proactive = planned regular maintenance

Cost reduction = utility switch

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

How does a tenant arrange improvements?

A

Requires consent

Licence to Alter
- specification
- certification

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Types of certification required

A

EPC
Electrical
Gas safety

Health and Safety = fire safety

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Why avoid void periods?

A

Empty business rates - relief for 3 months or extended based on criteria
Vandalism
Disrepair
Insurance
Security
Disposal strategy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What are empty rates

A

Shop and offices = 3 months relief
Industrial = 6 months relief

Mitigations
= 42 day rule = occupy before reapplying for exemption
= meanwhile use - pop up, short term
= charity shop

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Outline a piece of Case Law around rates?

A

Monk V Newbigin
- property incapable of beneficial occupation on account of building works
- apply RV of £1 removing rate liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is the Service Charge in Commercial Property 1st edition 2018?

A
  • landlord recover 100% cost in accordance with the lease
  • based on £m2, Rateable value, % rent
  • clarity, communication and financial competence
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What are the aims and objectives of the Service Charge in Commercial Property 1st edition 2018?

A

1 Improve standards to promote best practice, uniformity, fairness and transparency in management and administration of service charge
2 Timely issue of budget and year end
3 Reduce disputes and guidance to resolve
4 Guidance to solicitors, clients, managers of service charge in negotiation, drafting, interpretation, operation of lease

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What is the service charge benchmark?

A

OSCAR (Office Service Charge Analysis Report) - JLL benchmark
International Total Occupancy Cost Code
24 Core principles 2018 service charge code
Reconciliation - check vs accounts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What are the 24 core principles laid out in the Service Charge in Commercial Property 1st edition 2018 PS?

A

Service cost
1 all costs be transparent
2 services be procured
3 owners not make profit

Allocation and apportionments
4 costs to relevant expenditure categories
5 basis and method of apportionment fair and reasonable

Communication and consultation
6 consult occupiers regarding standard and quality
7 communicate to ensure service benefits all
8 demonstrate compliance with professional standard

Duty of care
9 certifying accounts have duty of care to owner/occupiers
10 owner duty to manage
11 clear policies on managing service charge

Financial competence
12 issuing statement in non-partisan spirit
13 statements supported by independent review in line with ICAEW Technical Release
14 use Industry Standard Cost Classification in reports

Occupier Responsibilities
15 prompt payment
16 lease has legal effect
17 proactive in assisting owners in operation

Right to challenge/alternative dispute resolution
18 all new leases require resolution through ADR
19 not agree mediator/independent expert = President of RICS nominate (on request)

Timeliness
20 communication and consultation timely
21 budget with commentary one month before start

Transparency
22 in accounts, notes, policies, day to day management

Value for money
23 effective value for money rather than lowest price

Exclusions
24 not include:
- initial costs
- set up costs (fit out/equipping management office)
- improvement costs above the cost of normal maintenance, repair or replacement. May include enhancement where justified
- future redevelopment costs
- costs and fees relating to owners investment (letting fees)
- costs attributable to void
- cost from negligence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What type of insurance for property management?

A

Property manager arrange on landlord behalf
Equivalent reinstatement basis
All risks covered
Shop around

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

How is rent collected?

A

Requires accurate information
Timing
Usual quarter days
25 March, 24 June, 29 Sept, 25 Dec

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What are rent arrears

A

Behind rent payments
Penalties outlined in lease
Includes interest
Section 17 Landlord and Tenant Act 1997 - request rent from former tenant under AGA within 6 months
Interest usually 2-4% above base rate after 14 days
Chase guarantor or use deposit
Forfeit if continuous

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What are commercial rent arrears recovery (CRAR)?

A

Tenant apply to court for relief from forfeiture
Landlord provide 7 days notice of enforcement
Rent arrears only
Landlord seize only certain goods
Favours tenant
Careful landlord does not waive right to forfeit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

What is an easement?

A

Legal right grants over a building or piece of land

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

What governs client money?

A

Rule 8 of the obligations for firms under Rules of Conduct
Client account for service charge and rent payments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

What is the Insolvency Act 1986?

A

Legal framework for dealing with financial problems of individuals, partnership and companies

Administration - called in by the bank
Company Voluntary Agreement - payment from creditors
Receivership
Voluntary liquidation
Bankruptcy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Define Equality Act 2010?

A

9 protected characteristics
Access for disabled through reasonable adjustments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

What is Capital Allowance Act 2001?

A

Depreciation of qualifying expenditure
How capital allowances are deducted from income taxable under Income Tax Act 2007
Specialist area

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

What is data security?

A

Protection of data
Data Protection Act 2018
- UK implementation of EU GDPR

37
Q

What is Corporate Manslaughter Homicide Act 2007?

A

Covers death caused by negligence
Unlimited fine
Property managers role to examine
Serious failure in heath and safety

38
Q

RICS Surveying Safely 2nd edition 2018

A

Outlines health and safety precautions for aspects at work

39
Q

How to manage asbestos?

A

Control of Asbestos Regulation 2012
Property Manager duty to remove landlord liability
Refer to specialist
Implement register and plans

40
Q

Describe asbestos?

A

Asbestosis is fatal
Caused by disturbing fibres
Regulated removal but can be costly
Blue = crocidilite
White = chrysotile
Brown = amosite
Remedy by removal or encapsulation

41
Q

What is AC Refridgeration 22?

A

Banned in AC units since Jan 2015
Affects ozone layer
EC Ozone Regulation number 1005/2009

42
Q

What is Construction and Design Management Regulation 2007 updated 2015

A

CDM
Responsibility with duty holder
Main health and safety duty
- principle contractor
- principle designer

43
Q

What is health and safety at work act 1974?

A

Employers duty to protect employees

44
Q

What is health and safety at work 1999?

A

Duty to protect employees and PAT testing

45
Q

What are the headings for the 11 core principles under Service Charges in Commercial Property 2018?

A

1 Service cost
2 Allocation
3 Communication
4 Duty of Care
5 Financial competence
6 Occupiers responsibilities
7 Right to challenge/ADR
8 Timeliness
9 Transparency
10 Value for money
11 Exclusions

46
Q

What are the recognised impacts of Covid 19 on service charges?

A

Lack of use = lower costs
Additional costs to Health and Safety
Landlord seek to reduce cost where possible
Spread payments
Lack of use to reduce cost and pass to tenant by year end
Management fee to reflect work
Solutions accounts RICS professional statement service charge in commercial property

47
Q

What is the Technical Due Diligence in Commercial Property 1st edition effective 1 April 2020?

A

Technical due diligence report - balance and professional opinion of the condition of the property

Allows purchase, occupier, financier to make an informed decision

48
Q

What does a technical due diligence report include/

A

Defect need repairs:
- deficiencies in design and construction quality
- lack of planned and actual maintenance
- neglect/misuse
- insufficient capacity in services items
- deleterious materials
- non-compliance with statutory/mandatory requirements

49
Q

What is technical due diligence used for?

A
  • provide basis for optimisation of design
  • gain understanding of condition and design
  • establish suitability for intended use
  • understand need/quantity of future works
  • level of protection for occupier, owner, founder
  • provide basis for negotiations
  • basis for allocation of risk
  • basis to improve life safety
  • basis for performance improvement
50
Q

What is RICS Dilapidations?

A

Professional statement 7th edition, effective 1 Dec 2016

Covers:
Role of the surveyor
Taking instructions
Documentation
Inspection
Schedule of dilapidations and Scott schedule
Dilapidations during lease term
Dilapidations at the end of the lease term
Dilapidations claims against landlords
Diminution valuation
Break clauses
Settlement of disputes

51
Q

How might forfeiture be waived?

A

Unequivocally recognising the continuing existence of the lease - demanding rent/accepting rent

52
Q

What does management fees include?

A

Any profit element for managing the services in the service charge

Supervision of site, overseeing contractors, accounts/budgets

53
Q

What is a reserve fund?

A

Fund to meet anticipated future cost of maintenance and upkeep - external cleaning and redecoration

Short term nature - costs reasonably incurred during the term of occupiers lease

54
Q

What is a sinking fund?

A

Funds set aside for replacement of a wasting asset (heating plant, equipment, lifts)

Set out clear policy

55
Q

What is recoverable within the service charge?

A

Reasonable cost of maintenance, repair, replacement (usually where beyond economic repair) of fabric, plant, equipment and materials necessary for the property’s operation

56
Q

What are the mandatory requirements set out in Service Charges in Commercial Property 2019?

A

1 expenditure must be in accordance with the lease 2 recover no more than 100% of proper and actual costs
3 budgets issued annually within commentary
4 accounts show true and accurate record of actual expenditure
5 provide apportionment matrix
6 monies held in more or more discrete bank account
7 interest must be creditied to service charge
8 advise client is disputes exists
9 after resolution of dispute, charge raised incorrectly should be adjusted to reflect error

57
Q

What are the timescales for service charges?

A

Budget - 1 months before with commentary

Reconciliation - 4 months after with commentary

58
Q

What is included in the total cost of management?

A

Reasonable costs and overheads borne in the process of operating and managing the services

Exclude: rent collection, asset management

Fixed price

  • fee charged by the manager and related entities for managing and supervising the services
  • cost of the site specific management staff including accommodation and ancillary office costs
59
Q

How to procure services in a service charge?

A

In line with RICS Procurement of Facility Management

  • defined scope of service
  • clear objectives
  • evaluation criteria
  • clear pricing structure
  • clear timescales for process
  • clear payment mechanism
  • comply with relevant data protection rules
60
Q

What is a sweeper clause?

A

Avoids risk of incurring costs outside the service charge - those listed and other miscellaneous services might be provided in the future

61
Q

What is the right to challenge?

A

Occupiers reasonable period - four months from issue - to raise queries

62
Q

Recommended ADR for service charge disputes?

A

Mediation
Independent expert determination

If not agree, seek assistance from RICS dispute resolution service

63
Q

What are service charge and reserve fund best practice?

A

Held in separate accounts
Reasonably estimate amount of contribute to specific expenditure
Explain lifecycle

64
Q

How to manage cost for replacement but modern equivalent?

A

Additional cost justify with reduction in ongoing maintenance costs

65
Q

What is appendix A of the Services Charges in commercial property

A

Compliance checklist:

Value for money
Transparency
Timeliness of reporting
Approval
Management fee
Duty of care to occupiers
Standardised financial reporting
Interest income and expenses
Professional standard
Support for ADR

66
Q

What is appendix B of service charges in commercial property?

A

Standard industry cost classification

Management
-management fees
-accounting fees
- professional fees

Utilities
-electric
-gas

Soft services
-security guarding/systems
-cleaning and sustainability
- landscaping and environment
- Marketing and promotions

Hard services
-mechanical and electrical services
- Lifts and escalators
- suspended access equipment
-fabric repairs and maintenance

Income
- interest
-income
- income operating expenses

Insurance
- engineering insurance
- all risk insurance cover
- terrorism insurance

Exceptional expenditure
-major works
- forward funding

Miscellaneous charges
-irrecoverable VAT
-external contributions

67
Q

What are appendix C and D in service charges in commercial property?

A

C - accounting sample report include schedule, report summary,

D - handover procedures

68
Q

What is CRAR?

A

Commercial Rent Arrears Recovery

Replaces distressed

Debt can only be pure rent arrears. Only rent, VAT and interest. Only applies to commercial property unless overriding lease.

Not service charge/insurance - split out if included

Debt must be a minimum sum set at 7 days rent arrears

69
Q

What is Sara & Hossein v Blacks Outdoor case law?

A

Sets a precedent for service charge payment whereby a tenant must ‘pay now, argue later’

70
Q

What are the remedies for non-payment?

A

Contact tenant (email, letter, call)
Meet tenant onsite - sock, occupation (CRAR 7 day notice)
Check accounts (turnover, costs)
Check rent deposit/guarantor
Options: payment plan, AGA, guarantor, deposit
CRAR
Statutory demand
Surrender
Forfeiture

71
Q

What is payment plan?

A

Short term measure to help tenants when in arrears

Read accounts first
Agree in writing
Personal to the tenant

72
Q

How would you use a guarantor?

A

For non-payment of rent
Section17 Landlord and Tenant Act 1995 give 6 months to claim
Guarantor settles they entitled to override the lease

73
Q

What is AGA?

A

Bought in under Landlord and Tenant (Covenants) Act 1995
Authorised Guarantee Agreement
Used in assignments of less
Applying guarantee to outgoing tenant
Not to sub letting - word lease so only assign to similar covenant strength
Only applies to one assignment

Should not be a condition of an assignment unless proposed assignee is of a weaker covenant

74
Q

How to recover under CRAR?

A

Certified enforcement officer enter after 7 day notice period. Cease goods to value of the rent arrears

Previous experience they are not been there, can obtain a court order to shorten 7 day period

Enforcement agent permitted to take: tenant assets not essential to operation. Must belong to the tenant.

Not take items for operation or personal use

75
Q

What is statutory demand for rent?

A

Pursuing bankruptcy/winding up procedures
Only when no dispute about level of arrears
Aggressive tactic
21 days to pay
Debts in excess of £750k

76
Q

When to surrender through non-payment of rent?

A

Landlord and tenant agree to release the tenant from obligation
Does not have to be consideration - nil premium
Only when landlord is confident of reletting/wants to redevelop

77
Q

What is forfeiture for non-payment of rent or breach of covenant?

A

Aggressive tactic
Check clause in the lease
Rent must have been demanded or properly
Otherwise breach requires section 146 notice under Law of Property Act - wait 6 months as tenant has right to apply for relief - cannot do anything until expiry
Only by landlord entering the premises peaceably
Tenant has right to apply to the Court for relief and can be delayed by 6 months
Non-payment of rent, 21 days then change the locks assuming lease permits

78
Q

Why sublet and not assign?

A

Where their is a profit rent

Sublet at market rent, keep profit and pay landlord

79
Q

Considerations for assignment/subletting?

A

Read the lease
Undertaking for costs
Covenant strength
Proposed rent
Reasonable grounds to refuse consent - management/covenant
Landlord and Tenant act 1988 - deal promptly
Impact on investment value

80
Q

What is the purpose of dilapidations?

A

Entitles the landlord to get the property back in the same condition as it was handed over to the tenant

Review repairing obligation - FRI

Schedule of Condition - record condition if poor, written record and photos

Schedule of dilapidations - tenant can either do the works or pay agreed amount

81
Q

Types of schedule of dilapidations?

A

Interim - during the lease with at least 3 years left

Terminal - service within last 3 years

Final - served on expiry

Claim is based on cost of works or diminution in value - whichever is the greatest

82
Q

Types of insolvency?

A

Administration:
- appointed by the company, creditors, bank
- deals with asset over an agreed timescale known as moratorium
- directors remain in office but no power
- company continues to pay rent is can be claimed as a cost of administration

Receivership:
- Law of Property Act Receiver is appointed to sell of asset to pay off debts

83
Q

What to do if a tenant becomes insolvent?

A

Check the lease
Is there a rent deposit
Are there guarantors
Contact the administrator and register claim for arrears
Secure property
Inform insurers
Cannot accept keys as this will constitute surrender
Can take back to ensure locked and secure as long as confirmed in writing and not constitute surrender

84
Q

What legislation refers to landlord approval for a licence for alterations?

A

Landlord and Tenant Act 1927

If alterations are an improvements, landlord might need to pay compensation

85
Q

Grounds to refuse consent for alterations

A

Cause diminution of value
Previously failed repair covenant
Lease prohibits

86
Q

Commercial sector market trends

A

JLL report that 60% office staff prefer hybrid
RICS Modus states 70% of London office space below B rating

87
Q

Changes to Town and Country Use Classes?

A

Changes in 2020 with the aim to repurpose towns
Shops, food and beverage, business, non-resi become under E

88
Q

Impact of changes to Permitted Development rights

A

From 21 May 2024 farmers able to develop buildings into commercial uses such as farm shops, sporting facilities, training facilities

89
Q

What is Fitness for Human Habitiation Act?

A

Around standard of housing
If the condition causes harm, tenant can take landlord to court
Landlord enforced to repair and compensate

APC Revision (17 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions