Property Management Flashcards
What are the responsibilities for occupied buildings?
Ensure compliance with lease terms, service charge management, and health & safety.
What are the responsibilities for vacant buildings?
Secure property, manage utility disconnections, inspections, and insurance.
What are the responsibilities for communal areas?
Maintain cleanliness, safety, and fair service charge apportionment.
What is the Occupiers’ Liability Act 1957?
Duty of care to lawful visitors (e.g., tenants, contractors).
What is the Occupiers’ Liability Act 1984?
Extends duty to trespassers if hazards are known.
How do the Occupiers’ Liability Acts impact your role?
Ensure regular inspections, risk assessments, and compliance with health & safety legislation.
What are the key principles of the RICS Professional Standard: Property Agency and Management?
Transparency, integrity, client care, and compliance with legal obligations. Fair and reasonable dealings with tenants.
What is the RICS Professional Statement on Service Charges (2020)?
Ensures fairness, transparency, and accountability.
What does the RICS Real Estate Management Guidance cover?
Covers strategic management, landlord-tenant relationships, and legal compliance.
What does the Commercial Property Management Guidance address?
Addresses leases, repairs, and service charge obligations.
What is the RICS Code for Leasing Business Premises (2020)?
Includes best practices on service charge clauses.
How does alienation affect service charge responsibility?
Alienation (assignment/subletting) affects service charge responsibility.
What is the rule of privity of contract?
Original tenant remains liable under the lease terms even after assignment, unless overridden by the Landlord & Tenant (Covenants) Act 1995.
What is the difference between absolute, qualified, and fully qualified covenants?
Absolute: No alterations permitted. Qualified: Alterations allowed with landlord’s consent (but no obligation to grant it). Fully Qualified: Consent must not be unreasonably withheld or delayed.
What is the statutory duty placed on landlords under the Landlord & Tenant Act 1927?
Tenants may claim compensation for landlord improvements.
What is the statutory duty placed on landlords under the Landlord & Tenant Act 1988?
Landlords must reasonably consider applications for assignment/subletting and respond promptly.
What remedies are available to landlords for breach of repairs?
Specific performance, damages, forfeiture, or self-help provisions.
What are the remedies for rent default?
CRAR (Commercial Rent Arrears Recovery), forfeiture, debt recovery action.
What are the main rent arrears recovery options for landlords?
CRAR, statutory demand, court action, or insolvency proceedings.
What are the various forms of corporate insolvency?
Liquidation, administration, Company Voluntary Arrangement (CVA), receivership.
What does the Corporate Manslaughter and Corporate Homicide Act 2007 do?
Holds organisations criminally liable for fatal health & safety failings.
What are your duties under the Corporate Manslaughter Act?
Ensure safe management of properties to prevent tenant and occupier risks.
What are the offences and penalties under the Corporate Manslaughter Act?
Unlimited fines, reputational damage, and remedial orders.
What information is required to hand over a service charge account upon sale or change of manager?
Service charge budgets, historic accounts, unpaid arrears, sinking funds, lease obligations.
What does the RICS Guidance Note on Licences for Alterations cover?
Covers landlord consent process and lease obligations.
What is the process of considering a tenant’s application to alter?
- Review lease terms (covenants on alterations). 2. Assess impact on the building, services, and value. 3. Seek third-party approvals (superior landlord, planning, building control). 4. Issue a licence to alter, specifying conditions.
Why is it important to handle applications properly?
Ensures compliance, protects asset value, and prevents unauthorised works.
What protection does a licence to alter provide?
Formalises consent and conditions for alterations to avoid disputes.
How should an application to alter be submitted?
In writing, including plans, specifications, and risk assessments.
What is a cost undertaking?
A tenant’s agreement to cover landlord’s professional fees for reviewing alteration proposals.
What information should be provided with the application to alter?
Full plans, method statements, structural impact assessment, contractor details.
What would you look for in the lease if you received an application?
Type of covenant (absolute, qualified, fully qualified). Tenant’s repairing obligations.
What are improvements under the LTA 1927?
Works that enhance a property’s rental or capital value.
How does this impact landlord’s consent?
Landlord must act reasonably when considering applications for improvements.
What is an improvement?
Enhancement of property beyond standard repair obligations.
What does ‘not to be unreasonably withheld’ mean?
Landlord must have valid reasons for refusing consent.
What does ‘not to be unreasonably withheld or delayed’ mean?
Landlord must respond within a reasonable timeframe.
What happens if superior landlord’s consent is required?
Seek superior landlord consent early, ensuring compliance with the lease’s hierarchy.
What are your duties in relation to timings/reasonableness?
LTA 1988 requires landlords to respond to assignment applications within a reasonable time.
Is there any case law relating to unreasonable withholding of consent?
International Drilling Fluids v Louisville Investments (1986) – Defined what is ‘unreasonable withholding’ of consent.
How would you consider the nature of the works?
Assess whether structural, cosmetic, or operational impact exists.
What does Section 3 of the LTA 1927 relate to?
Tenant’s right to compensation for landlord improvements.
What would happen if you discovered unlicensed works on review or assignment?
Assess risk and lease implications. Seek retrospective consent or require reinstatement.
How would you consider the impact of proposed alterations on building operations?
Impact on services, compliance, and lease obligations.
Why would a licence to alter be requested?
To ensure landlord’s control over tenant works and protect asset value.
What is a warranty?
A contractual guarantee ensuring specific conditions or standards are met, often in construction or insurance.
Why would one be requested?
Protects landlords and tenants from defects, breaches, or failures in service provision.
What are reinstatement provisions?
Lease clauses requiring tenants to return a property to its original condition at lease expiry.
How do dilapidations relate to alterations?
Alterations may increase or decrease dilapidations liability depending on lease obligations.
How does the Equality Act 2010 relate to alterations?
Landlords may need to approve reasonable adjustments for disabled occupiers.
What H&S considerations relate to alterations?
Structural safety, fire risk, asbestos management, contractor safety procedures.
How does MEES relate to alterations and your reasoned advice?
Alterations must not reduce EPC below MEES standards, and landlords may need to improve energy efficiency.
What levels of approval decision are there?
- Unconditional consent 2. Conditional consent (e.g., reinstatement clause) 3. Refusal (must be reasonable under LTA 1927/1988).
If consent is refused, what remedies does a tenant have?
Apply for statutory declaration, challenge refusal, or negotiate terms.
Can consent be granted retrospectively?
Yes, through a retrospective licence for alterations.
How do you document consent?
Through a Licence to Alter (LTA) or side letter confirming agreed conditions.
What is a final inspection and why would you carry one out?
Assess compliance with lease obligations and identify dilapidations at lease expiry.
Following alterations, can you adjust a service charge?
Yes, if alterations impact shared services, common areas, or maintenance costs.
What is TUPE?
Transfer of Undertakings (Protection of Employment) Regulations, protecting employee rights when a business transfers.
What is the purpose of TUPE?
Ensures employees retain pay, terms, and conditions when transferred to a new employer.
How might TUPE relate to property management?
Staff in FM or security services may transfer when a contract or property manager changes.
What are the effects of TUPE?
Employers must consult staff, ensuring continuity of employment rights.
What is a duty of care deed?
A legal agreement ensuring contractors owe a duty of care to a third party (e.g., funder, landlord).
Why is a duty of care deed often required?
Provides recourse for poor workmanship or negligence.
What is included within a duty of care deed?
Scope of liability, obligations, warranties, dispute resolution clauses.
What would you do if you were asked to sign a duty of care deed?
Seek legal advice, review obligations, and ensure compliance with firm policy.
What are 3 key principles in RICS Commercial Property Management?
- Transparency and fairness in service charges. 2. Compliance with lease terms and legislation. 3. Proactive property maintenance and risk management.
What are some core duties of a property manager?
Lease compliance, service charge management, H&S, occupier liaison, property inspections.
What are some key obligations associated with the collection of monies?
Clear invoicing, compliance with lease terms, proper accounting of rent and service charges.
What would you do if an occupier defaulted on payments?
Send reminders, negotiate payment plans, pursue legal recovery actions if necessary.
How would you deal with rental deposit deeds?
Hold deposits in an approved scheme, ensure proper documentation and lease compliance.
What is a key principle for good property management?
Proactive risk management and clear communication with stakeholders.
What are the usual insurance requirements for a landlord?
Buildings insurance, public liability, loss of rent, terrorism cover.
How can you pass on the costs of insurance to tenants?
Through a lease insurance clause or service charge recovery.
What are the issues associated with lack of insurance?
Financial loss, legal disputes, inability to recover damages.
How do you ensure that insurance cover is appropriate?
Regular policy reviews, professional valuations, checking lease obligations.
What is public liability insurance and why is it important?
Covers third-party injury or damage claims on a property.
Why is effective occupier liaison important?
Reduces disputes, ensures compliance, fosters good relationships.
What is the role of property managers in relation to energy management?
Monitor energy usage, improve sustainability, ensure MEES compliance.
What is a BMS?
Building Management System, controls HVAC, lighting, and energy efficiency.
What are your H&S/fire safety obligations as a property manager?
Fire risk assessments, compliance with RRO 2005, regular safety inspections.
What is third-party supplier procurement in relation to property management?
Fair procurement processes, contract management, compliance with lease obligations.
What are specific issues relating to the management of a property portfolio?
Coordinating multiple service providers, varying lease terms, compliance across different properties.
How do you ensure good management of mixed-use developments?
Separate service charge structures, clear demarcation of residential/commercial responsibilities.
Does the RICS provide any relevant guidance on mixed-use developments?
RICS Mixed-Use Property Management Guidance Note.
Under the Occupiers’ Liability Act 1957, what happens if an injury was caused to a visitor due to the faulty work of a third party?
The occupier may be liable unless they took reasonable steps to check the third party’s competence.
How can you satisfy your duty of care to persons other than visitors under the Occupiers’ Liability Act 1984?
Implement safety inspections, risk assessments, warning signage.
What are the Management of H&S at Work Regulations 1999?
Employers must assess risks and implement control measures.
What do the Control of Substances Hazardous to Health Regulations 2002 (COSHH) manage?
Manages hazardous materials (e.g., asbestos, cleaning chemicals).
What do the Water Supply (Water Fittings) Regulations 1999 ensure?
Ensures safe water supply, prevents contamination.
What do the Electricity at Work Regulations 1989 require?
Requires regular electrical system inspections and maintenance.
What does the Defective Premises Act 1972 require from landlords?
Landlords must ensure properties are fit for habitation.
What does the Regulatory Reform (Fire Safety) Order 2005 require?
Requires fire risk assessments, safety measures, clear evacuation plans.
What do the Gas Safety Regulations 1998 require?
Landlords must ensure annual gas safety checks by certified professionals.
What do the CDM Regulations 2015 cover?
Health & safety requirements for construction and maintenance works.
What are the two tests for corporate insolvency?
- Cash Flow Test – Can the company pay debts as they fall due? 2. Balance Sheet Test – Are liabilities greater than assets?
What are the consequences of insolvency?
Liquidation, administration, CVA, or restructuring.
What is administration in the context of insolvency?
A company enters protection from creditors while an administrator attempts rescue or restructuring.
What is the difference between administration, administrative receivership, CVA, liquidation, and restructuring plans?
Administration aims to rescue, while liquidation terminates the business. Administrative receivership focuses on creditor recovery, not rescue.
How would you deal with property management in the case of tenant insolvency?
Secure the property, assess impact on service charges and lease obligations. Limited options to recover arrears (via insolvency practitioners, guarantors, rent deposits).
What are 3 key principles of RICS Real Estate Management?
- Transparency and fairness in lease obligations. 2. Proactive maintenance and compliance. 3. Effective financial and risk management.
What is CSR?
Corporate Social Responsibility – Ensuring businesses operate ethically and sustainably.
What are the requirements under the RICS REM guidance for rent demands/rent arrears?
Clear communication, fair treatment, transparent accounting.
What is PPM and why is it beneficial?
Planned Preventative Maintenance – Reduces long-term costs, prevents major repairs.
What is the difference between an insured and uninsured risk?
Insured: Covered by policy (fire, flood). Uninsured: Not covered (war, nuclear risk).
What advice would you give close to the end of a lease?
Review dilapidations, service charges, and reinstatement obligations.
What types of dilapidations claims are there?
Interim (during lease), terminal (end of lease), statutory (LTA 1927).
What is an S18 valuation and why would one be used?
Limits landlord’s claim for dilapidations.
What is an insured risk?
Covered by policy (e.g., fire, flood).
What is an uninsured risk?
Not covered (e.g., war, nuclear risk).
What is an S18 valuation?
Limits landlord’s claim for dilapidations if the works do not reduce value.
How do empty rates affect property managers?
Owners liable for business rates after 3-6 months vacancy.
How can you protect the security of client’s money?
Client accounts, reconciliation, segregation of funds.
What requirements do RICS place on firms holding client’s money?
RICS Money Protection Scheme, regular audits, compliance with professional statements.
What is an annual return?
A regulatory submission confirming compliance with RICS requirements.
What is a regulatory review?
An RICS compliance check on regulated firms.
What happens if you have surplus money in a client account that is not claimed after 6 years?
Donate to a registered charity after reasonable attempts to return it.
What is a key issue relating to holding client’s money?
Ensuring segregation of funds and preventing misuse.
What is a reconciliation?
Matching financial records with bank statements to ensure accuracy.
What controls should be in place relating to holding client’s money?
Regular audits, dual-authorisation for payments, separate accounts.
When was RICS Service Charge guidance last updated?
2020, introduced as a Professional Statement (PS).
What are 3 mandatory principles of the RICS Service Charge PS?
- Transparency in service charge budgeting. 2. Fair allocation and apportionment. 3. Timely reporting of service charge accounts.
What status does the PS hold?
Mandatory for RICS members and regulated firms.
What is a SC? Where is the SC arrangement set out?
Service Charge, detailed in the lease agreement.
What does a SC usually include/exclude?
Includes maintenance, security, insurance, cleaning. Excludes rent, tenant’s business costs, internal fit-outs.
How does the PS differ from the former SC code?
Stronger regulatory enforcement, clearer reporting standards.
When does the new PS apply from?
April 2020.
Who pays the SC?
Tenants, as per lease terms.
What are the aims of the PS?
Fairness, transparency, value for money.
Can it override a lease?
No, but it provides best practice guidance.
What are the options for recovering rent arrears?
CRAR, rent deposit drawdown, payment agreements, forfeiture.
What is forfeiture?
Landlord’s right to terminate a lease due to tenant default.
Where would you find out if you can forfeit a lease?
Lease agreement, legal advice.
What is a waiver?
Action that negates the right to forfeit (e.g., accepting rent after breach).
What is a S146 notice?
Formal notice before lease forfeiture for breach.
What is CRAR? When did it come into force?
Commercial Rent Arrears Recovery, 2014.
What did CRAR replace and how does it differ?
Replaced distress for rent, requires 7 days’ notice before seizing goods.
When can CRAR not be used?
If the property is mixed-use or residential.
What is a statutory demand?
Formal notice requiring payment of debt within 21 days.
What is a winding-up petition?
A legal request to liquidate a company due to unpaid debts.
What is the difference between a sinking and a reserve fund?
Sinking Fund: Long-term savings for major repairs. Reserve Fund: Covers short-term maintenance costs.
Explain the provisions of the Commercial Rent (Coronavirus) Act 2022.
Introduced binding arbitration for Covid-19 rent arrears disputes.
What precedent was set in the Criterion Buildings Ltd v McKinsey & Company Inc (UK) case relating to service charges?
Landlords must comply strictly with lease provisions when claiming service charges.
What contract have you set up with an external service provider?
Set up a hygiene contract for a shopping centre. Included SLAs, KPIs, cost breakdowns, and termination clauses.
What is a reactive/proactive management plan you have set up?
PPM strategy for a victoria centre. Regular inspections and maintenance schedule reduced unexpected costs.
What legislation/guidance have you complied with in doing so?
RICS Professional Statement on Property Management (2023), Landlord & Tenant Act 1985, Health and Safety at Work Act 1974.
What challenge have you faced and how did you overcome it?
A tenant disputing service charge apportionment. Reviewed lease terms, provided transparent cost breakdowns, and sought independent audit confirmation.
What is Commercial Rent Arrears Recovery (CRAR)?
A statutory process allowing landlords to recover rent arrears by seizing tenant goods.
Why did you advise your landlord to sign an agreement?
To formalise a repayment plan, avoiding legal enforcement costs and tenant insolvency risks.
How did you check for inaccuracies?
Cross-checked lease agreements, reviewed service charge accounts, verified previous statements, and conducted site inspections.
What RICS guidance did you adhere to?
RICS Service Charge Professional Statement (2020) – Ensuring transparency, fairness, and accuracy in budgeting.
What is included in the yearly service charge budget?
Planned maintenance costs, insurance, security, cleaning, utilities, management fees, and sinking/reserve funds.
How have you advised on the preparation and presentation of reports relating to property management?
Compiled service charge reports, rental arrears summaries, and PPM schedules.
How have you carried out all relevant statutory requirements or other responsibilities for larger portfolios?
Ensured fire safety, asbestos management, health & safety compliance across multi-let portfolios.
How have you provided strategic advice on property management matters?
Advised on lease restructuring to improve tenant retention.
How have you dealt with disputes?
Negotiated service charge disputes, dilapidations claims, and rent arrears recovery cases.
How have you provided advice as to alternative dispute resolution (ADR) options?
Recommended mediation or arbitration to resolve landlord-tenant disputes.
What necessary actions have you taken to protect your client’s position?
Ensured proper documentation of all tenant communications.
What signs of water ingress did you notice?
Damp patches on ceilings, peeling paint, mould growth on walls.
What are the risks to the property for not repairing the windows?
Further structural deterioration, increased repair costs, tenant complaints.
What are the risks to the tenant for breaching their lease?
Potential forfeiture, legal action for damages, loss of goodwill with the landlord.
What caused the damage to the veranda?
Water penetration due to poor drainage and lack of maintenance.
Is the damage posing a safety hazard?
Yes, loose timber and rusting support structures pose collapse risks.
What is the tenant’s response to the proposal to share repair costs?
Tenant may dispute liability based on lease terms.
How did you determine that repairing the leak was the landlord’s responsibility at 26 Augusta street?
I reviewed the lease, which confirmed that the windows were the landlord’s responsibility under a full repairing lease.
What was your advice and recommendation to your client on 26 Augusta street?
I advised instructing a window contractor to carry out immediate repairs to prevent further water ingress and damage.
Why was the repair of the veranda the tenant’s responsibility at 91ms?
Under the lease, the veranda formed part of the demised premises. The tenant held full repairing obligations, including external features attached to their unit, making them liable for the repair.
Why did you recommend that your client pay 50% of the cost at 91ms?
Although the lease placed responsibility with the tenant, the structure had shared visual benefit to the building. My client offered to cover 50% as a gesture of goodwill to maintain a positive landlord–tenant relationship and as part of its stewardship role in the town.
Did you seek to recover this 50% over the term of the lease at 91ms?
No – the contribution was offered without expectation of recovery, but I documented it in case future negotiations required reference to it.
Tell me about the RICS guidance on service charges.
The RICS Professional Statement: Service Charges in Commercial Property (1st Edition, 2018) is mandatory for RICS members. It sets out best practice including:
- Transparency of costs.
- Timely budgeting and reconciliation.
- Fair apportionment of charges.
- No profit from service charges.
It aims to promote fairness and reduce disputes between landlords and tenants.
What is the statutory duty placed on landlords under the L&T Act 1927/1988?
Landlords must give consent to alterations or assignments where it is not to be unreasonably withheld. The 1927 Act also provides for compensation to tenants for improvements in certain circumstances. The 1988 Act amended this, requiring landlords to give a written response within a reasonable time to alteration or assignment requests.
What is the process of considering a tenant’s application to alter?
- Receiving a written application with full specification and drawings.
- Reviewing against lease clauses and user clauses.
- Seeking input from building surveyors or legal advisors, if needed.
- Responding in writing within a reasonable time under the L&T Act 1988.
- If approved, granting a licence to alter to document the consent.
What protection does a licence to alter provide?
It legally documents the landlord’s consent to the works, protecting both parties by:
- Confirming approved works and reinstatement obligations.
- Clarifying ownership and liability of alterations.
- Ensuring compliance with statutory obligations like Building Regulations or Planning Permission.
It protects the landlord’s asset and avoids disputes at lease expiry.
What is a protected tenancy?
Protected tenancy is a kind of tenancy in the UK made under the Rent Act 1997. It gives the tenant both the security of tenure and the right to a fair rent.
What is a tenancy at will?
A tenancy at will is where the tenant has no legal interest and either party can terminate at will. If the tenant stays in after termination, this is classed as trespassing.
What components must be in place to form a tenancy agreement?
Parties must be listed, a physical property and location specified, terms of tenancy specified, value of rent specified, and there must be exclusive occupation.
What is a bare licensee?
A bare licensee is a person who uses or occupies land by permission of the owner and has no legal or equitable interest.
What is a trespasser?
A trespasser is a person entering someone’s land or property without the owner’s permission and has no consent in place.
What is a contractual lease?
A contractual lease is where a license is granted by a contract, and the right to occupy is often called the same.
What is a periodic tenancy?
A periodic tenancy is a rolling tenancy with no fixed end date and does not end until one party gives notice.
What is a tenancy at sufferance?
A tenancy at sufferance is created when a tenant wrongfully holds over past the end of the tenancy period, usually when a tenant stays past the lease term.
How could a tenant apply for a new lease?
A tenant can apply for a new lease by serving a Section 26 notice with terms or making a court application under Section 29 notice.
Under what grounds can a landlord object to a new lease?
Grounds include: A) Tenant’s failure to repair, B) Persistent delay in paying rent, C) Substantial tenant breach, D) Alternative accommodation offered, E) Uneconomic subdivision, F) Landlord’s intention to demolish or rebuild, G) Owner occupier requirements after 5 years of ownership.
What can a landlord do if a tenant does not pay rent?
The landlord can serve a formal demand notice before the rent falls due or use CRAR – commercial rent arrears recovery.
What is forfeiture?
Forfeiture is the ending of a lease by the landlord due to a tenant’s breach of covenant, exercised by re-entering the premises or commencing possession proceedings.
What is a Section 146 notice?
A Section 146 notice is served by a landlord intending to commence forfeiture proceedings following a breach of lease terms. It must inform the tenant of the breach and allow time for rectification.
When can a Section 17 notice be served?
A Section 17 notice can be served if it’s clear the tenant will not be able to pay rent or fixed charges, within 6 months of the charge falling due.
How do you compensate a tenant for improvements at the end of the lease?
The landlord and tenant act 1927 provides for compensation if tenants have served notice of intention to improve and provided specifications before commencing work.
What is a competent landlord?
A competent landlord, as defined in the Landlord and Tenant Act 1954, has at least 14 months of unexpired interest in the property.
What is the difference between a guarantor and a surety?
A surety binds themselves on behalf of the principal debtor, while a guarantee exists independently of any underlying obligation by the principal debtor.
What is an AGA?
An AGA (Authorised Guarantee Agreement) is where an outgoing tenant acts as a guarantor for the performance of the lease covenants by the new tenant.
What are the main points of the new Party Wall Act?
The act provides rights to protect property interests, requires notification of proposed works, and offers mechanisms for resolving disputes.
What is the aim of the Access to Neighbouring Land Act 1992?
The act allows for access orders requiring neighbours to grant access for maintenance and repair of drains.
What are the implied landlord and tenant covenants under a typical lease agreement?
Implied covenants include the tenant’s obligation to pay rent and keep the property in good repair, and the landlord’s covenant for quiet enjoyment.
What is the procedure for a tenant wishing to carry out improvements?
The tenant must check lease provisions, obtain landlord consent, and provide any required documentation.
Which section of the Landlord and Tenant Act stipulates that consent for an alteration cannot be withheld?
Section 19 of the Landlord and Tenant Act 1927 states that consent cannot be withheld unless the landlord demonstrates the improvement is detrimental to property value.
What does the Law of Property (Miscellaneous Provisions) Act 1989 state about new leases?
It states leases must be in writing, express terms contained in one document, signed by both parties, and can be oral if the duration is less than 3 years.
What is a right of pre-emption?
A pre-emption right allows someone the chance to buy land or property before the owner offers it to another party.
What is the difference between assignment and sub-letting?
Assignment transfers all covenants and obligations to a new party, while sub-letting creates a new lease but retains control over the original tenancy.
