Property Management Flashcards
What is the primary duty of care for a property manager according to the RICS Guidance Note on Commercial Property Management?
The primary duty of care is to the landlord, the client.
What are the two fundamental principles of rent collection?
- Accuracy of information, 2. Timing
When are the usual English, Welsh and Irish quarter days for rent payment?
25th March, 24th June, 29th September and 25th December
What are Scotland’s quarter days for rent payment?
28th of February, May, August and November
What is the easiest collection method for rent?
Bank direct debit
What are the two main types of alienation discussed in the document?
Assignment and sub-letting
In an assignment, what is the relationship between the new tenant (T2) and the landlord?
The new tenant (T2) has a direct relationship (privity of contract) with the landlord.
In a sub-letting, what is the relationship between the sub-tenant (T2) and the original tenant (T1)?
The new sub-tenant (T2) has a direct relationship with the tenant (T1) and pays them the rent, who then pays rent to the landlord.
What are the three types of alienation clauses mentioned?
Absolute, open, and restrictive (qualified)
What is the usual clause regarding landlord’s consent for alienation?
Landlord’s consent is not to be unreasonably withheld or delayed.
What is a Licence for Alterations?
A document to be completed before alterations works commence, protecting parties at rent review and dilapidations at the end of the lease.
What are two useful functions of a Licence for Alterations?
To protect the parties at rent review and dilapidations at the end of the lease.
What does Section 19 of the Landlord and Tenant Act, 1927 state regarding improvements?
If a lease prohibits improvements without Landlord’s consent, Section 19 imposes a proviso that such consent cannot be unreasonably withheld.
What is the formula for dilapidations recovery?
Breach + Loss + Evidence = Recovery
What are the THREE forms of Schedules mentioned for dilapidations?
- Interim Schedule, 2. Terminal Schedule, 3. Final Schedule
What is the aim of the RICS Professional Standard: Dilapidations, 7th edition 2016?
To reduce claims between landlords and tenants.
Who is usually responsible for arranging insurance in a commercial property lease?
The landlord, who then re-charges the tenant.
What is the usual basis of measurement for building reinstatement valuations?
Gross internal areas for commercial properties, by reference to the RICS Building Cost Information Service (BCIS).
When did RICS become a Designated Professional Body for insurance matters?
February 2005.
List three actions a property manager should consider for empty buildings.
Any three of: Building insurance, Maintaining fabric, Obtaining EPC, Clearing combustible material, Regular inspections, Health and safety assessment, Informing rating authority, Arranging security, Sealing letterbox, Planned maintenance, Setting frost controls, Disposal strategy, Maintaining asbestos register, Landscaping/gardening.
What is the normal commercial lease allowance for interest on late rent payments?
2%-4% above Bank Base Rate, 7-14 days following the rent payment date.
What is the Commercial Rent Arrears Recovery Scheme (CRARS)?
A scheme that replaced the ancient law of distress for rent, available only to commercial property landlords where a minimum level of rent is due under a commercial lease.
What is the timeline for CRARS?
Minimum of 7 days unpaid rent, Minimum of 7 clear days warning notice, Enforcement agents visit, 2 clear days to follow, Re-entry by enforcement agent to seize goods, Allow 7 clear days before sale of goods.
What does Section 6 of the Law of Distraint Amendment Act, 1908 allow?
It allows the landlord to serve a notice to ensure that any sub-tenant’s rent paid for any arrears due from the tenant can be received by the superior landlord.
What are the FOUR main options open to a landlord to deal with a tenant who is not repairing their property?
- Serve a repair notice, 2. Forfeit the lease, 3. Serve an interim schedule of dilapidations, 4. Do the works and charge the tenant.
What is the Jervis v Harris clause used for?
It gives the landlord a right to re-enter the property to undertake repairs and claim to recover the cost from the tenant as a debt, in the event of the tenant not complying with the repairing covenant of their lease.
What are service charges?
Charges to tenants of multi-tenanted properties or estates of costs incurred by a landlord to maintain and manage a property.
How many principles must professionals involved in the management of service charge accounts act in accordance with?
9 principles.
What should a service charge Budget be agreed with before the commencement of the service charge year?
The tenant.
What does the RICS Professional Standard: Service charges in commercial property, 2018 aim to improve?
General standards and promote best practice, uniformity, fairness and transparency in the management and administration of services charges in commercial property.
What is a planned maintenance programme?
A planned maintenance activity supervised by a property manager or building surveyor, including cyclical maintenance, preventative maintenance, and responsive maintenance.
What is the purpose of a Schedule of Condition?
To limit the tenant’s repairing obligation in respect of agreed items of disrepair for the duration of the lease.
What is lease ‘engineering’?
Actions taken by landlords to maintain value in their investment or retain a tenant, such as granting a longer lease in return for a lower rent or rent-free period.
What does the Leasehold Property (Repairs) Act 1938 aim to protect?
It aims to protect tenants against onerous interim schedules of dilapidations.
What is an effective FRI lease?
When the landlord is responsible for repairs & re-charges via the service charge.
What is the name of the RICS guidance note for commercial property management in England & Wales?
RICS Guidance Note on Commercial Property Management in England & Wales, 2011
What does the RICS Guidance Note on Commercial Property Management focus on?
It focuses on how a property manager can be efficient, effective and accountable to their client and comply with statute law.
What is the primary duty of care for a property manager according to the RICS Guidance Note?
The primary duty of care is to the landlord, the client.
What are some key areas covered in the RICS Guidance Note on Commercial Property Management?
It gives specific advice on many key areas including the property manager’s core duties of rent collection, service charges, managing buildings, H&S and procurement of third-party suppliers.
What additional useful information does the RICS Guidance Note on Commercial Property Management contain?
It also contains a useful summary of all relevant statute law and a model terms of engagement.
What is the status of the RICS Guidance Note on Commercial Property Management as mentioned in the document?
The document states that this publication is to be replaced shortly.
What is the name of the RICS professional standard related to service charges?
RICS Professional Standard: Service charges in commercial property, 2018
What are the main aims of the RICS Professional Standard on Service Charges?
The aims include improving general standards, promoting best practice, uniformity, fairness and transparency in the management and administration of services charges in commercial property, ensuring timely issue of budgets and year-end certificates, reducing disputes, and providing guidance on lease negotiation and operation.
How many principles must professionals involved in the management of service charge accounts adhere to according to the RICS Professional Standard?
Professionals involved in the management of service charge accounts must adhere to 9 principles.
When is a new edition of the RICS Professional Standard on Service Charges expected to be published?
The document mentions that RICS plans to publish a new edition of this Professional Standard on Service Charges in summer 2025.
What are three of the principles that professionals involved in the management of service charge accounts must follow according to the RICS Professional Standard?
- All expenditure that the owner and manager seek to recover must be in accordance with the terms of the lease.
- Owners and managers must ensure that service charge budgets, including appropriate explanatory commentary, are issued annually to all tenants.
- Service charge monies (including reserve and sinking funds) must be held in one or more discrete (or virtual) bank accounts.
