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PM - Summary of Experience - APC > Property Management - Summary of Experience > Flashcards

Property Management - Summary of Experience Flashcards

1
Q

Tell me about RICS guidance on commercial property management

A

RICS Commercial Property Management in England and Wales 2011, 2nd Edition (guidance note)

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2
Q

Tell me about RICS guidance on Real Estate Management

A

RICS Real Estate Management, 2016, 3rd Edition (professional statement)

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3
Q

What are the 3 key principles of RICS commercial property management in England and Wales

A
  • Tennt management
  • Building management
  • Financial management
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4
Q

What status does RICS Real Estate Management hold and what edition is it?

A

Professional statement - mandatory

2016 -> 3rd edition

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5
Q

What are the requirements under RICS Real Estate for Rent Demands ?

A

Submit rent demands in a timely manner and ensure they are clear

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6
Q

What are the requirements under RICS Real Estate Mangement for rent arrears?

A

Ensure efficient system is in place to monitor rent collected and chase those not received

Keep Client informed

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6
Q

What are the requirements under RICS Real Estate Mangement for rent arrears?

A

Ensure efficient system is in place to monitor rent collected and chase those not received

Keep Client informed

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7
Q

Why is effective occupier liason important?

A

Seeking to create a good relationship with occupiers is essential for good property management

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8
Q

What are some of the core duties of a property manager?

A
  • Liaising and reporting with the Landlord
  • COllection of monies
  • Defaulting occupiers
  • Service charge
  • Managing building
  • Occupier liason
  • H&S Compliance
  • Energy management
  • Procurement of third party suppliers
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9
Q

What are some of the key obligations associated with collection of monies?

A
  • Maintian database to record financial position of occupiers
  • Make payment processes clear for occupiers
  • Have mechanisms to notify any default in payment or over-payment
  • Have process to promptly pursure defaults
  • Have process to forward Client money to Client
  • Understand all relevant documents
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10
Q

Explain your understanding of the Occupier Liability Act 1957?

A

Imposes duty of care on persons occupying or in control of any premises in relation to visitors

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11
Q

Under the Occupier Liability Act 1957, what happens if an injury was caused to a visitor due to the fault work of a third party?

A

Occupier not to be treated without more as answerable for the danger, if he acted reasonably, entrusting the work to a competant contractor, taking the necessary steps to ensure competance and skill, and the work had been done properly

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12
Q

What is the Occupiers Liability Act 1984?

A

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

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13
Q

How can you satisfy your duty of care to persons other than visitors under the Occupier Liability Act 1984?

A

Take reasonable steps to give warning of the danger concerned or to discourage persons from incurring the risk

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14
Q

How can you satisfy your duty of care to persons other than visitors under the Occupier Liability Act 1984?

A

Take reasonable steps to give warning of the danger concerned or to discourage persons from incurring the risk

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15
Q

Who is your main duty of care to?

A

the Client

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16
Q

How does the Occupiers Liability Act 1957 impact your role?

A
  • have a duty to ensure any visitor is reasonably safe whilst on the property
  • Won’t be released from liability by putting up a simple warning sign -> sufficiently clear
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17
Q

How does the occupiers liability Act 1984 impact your role?

A
  • Duty owed to any non-visitor if you’re aware of a danger on site or reasonable to believe any person may be at risk on site
  • Expected to offer reasonable protection against danger
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18
Q

What is an absolute covenant?

A

Complete bar/prohibitation against doing something
-> Complete control for Landlord

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19
Q

What is a qualified covenant?

A

Requires Landlord consent -> no statutory implied provision that landlords consent is not to be unreasonably withheld

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20
Q

What is a fully qualified covenant?

A

A covenant that requires landlord consent, but states it is not to be unreasonably withheld

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21
Q

What does it mean for consent not to be unreasonably withheld?

A

Landlord has a duty to consent unless it is reasonable not to do so
-> Duty of providing reasonableness lies with Landlord

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22
Q

What does it mean for consent not to be unreasonably withheld?

A

Landlord has a duty to consent unless it is reasonable not to do so
-> Duty of providing reasonableness lies with Landlord

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23
Q

What is the statutory duty placed on Landlords under the Landlord & Tenant Act 1927?

A
  • Sections 1-3 give a tenant who has made improvements the right to compensation (improvements made during tenancy)
  • Section 18 limits/defines the amount of damages the Landlord is able to recover for breach of the tenant repairing covenant
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23
Q

What is the statutory duty placed on Landlords under the Landlord & Tenant Act 1927?

A
  • Sections 1-3 give a tenant who has made improvements the right to compensation (improvements made during tenancy)
  • Section 18 limits/defines the amount of damages the Landlord is able to recover for breach of the tenant repairing covenant
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24
Q

What is the statutory duty placed on a landlord under the Landlord & Tenant Act 1988?

A

This act imposes statutory duties on landlords in connection with covenants to assign and underlet -> serve notice of decision within a reasonable period

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25
Q

What is the cirporate manslaughter and corporate homicide act 2007 and what are your duties under it?

A

Clarifies criminal liabilities where serious failures in the management of H&S results in fatalities

  • Duty of care to peoples safety
  • Duty of care to systems of work and equipment
  • Duty to the conditions of work sites and other premises
  • Duty of care to products or service supplied to customers
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25
Q

What is the cirporate manslaughter and corporate homicide act 2007 and what are your duties under it?

A

Clarifies criminal liabilities where serious failures in the management of H&S results in fatalities

  • Duty of care to peoples safety
  • Duty of care to systems of work and equipment
  • Duty to the conditions of work sites and other premises
  • Duty of care to products or service supplied to customers
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26
Q

What does unreasonably withheld and delayed mean?

A

The Landlord has a duty to consent unless it is reasonable not to do so

  • reasonableness lies with Landlord to prove
  • Duty to respond within a reasonable period
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27
Q

How does the Equality Act 2010 relate to alterations?

A

Consent cannot be unreasonably withheld regardless of lease wording if works are required for Equality Act compliance

  • must respond within 42 days
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28
Q

What is a duty of care deed?

A

Document between the Property manager and the Landlords funder

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29
Q

What is the purpose of a duty of care deed?

A

To create a direct legal relationship between the PM and funder, particularly to payment of rent, but also more generally

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30
Q

Why is a duty of care deed often required?

A

More security for lending due to volatile prices and risk averse

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31
Q

What are 3 of the key principles in RICS Real Estate Management?

A
  • conduct business in an honest, fair and transparent manner
  • Not discriminate unfairly in any dealings
  • Do the utmost to avoid conflicts of interest -> deal with them openly, fairly and promptly when they do arise
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32
Q

What are some key lease clauses you are familiar with?

A
  • Break clause
  • Rent Review
  • Repair
  • Alienation
  • Rent
  • Service charge
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33
Q

What is alienation?

A

The right granted in a lease to assign, sublet or share occupation of the premsies

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34
Q

Tell me about your responsibilities for occupied areas?

A
  • Collection of rent and SC and insurance
  • Ensure compliance with lease obligations
  • Occupier liason
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35
Q

Tell me about your responsibilities for communal areas?

A
  • H&S compliance
  • Maintain plant & equipment
  • Procure service contracts
  • Understand responsibilities to repair and maintain
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36
Q

What is a service charge?

A

Amount that tenants pay to cover the cost of providing communal services to a building or the surrounding estate

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37
Q

Tell me about RICS guidance on service charge

A

RICS Service Charge in Commercial Property, 1st Edition, 2018

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38
Q

How would you handover a service charge account upon sale or change in manager?

A

provide:
- property financial info
- tenant financial info
- financial transfer
- statement on SC movement
- Info on sinking or reserve funds
- depreciation charges
- security deposits for utilities

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39
Q

When was RICS Service Charge guidance last updated?

A

2018 - 1st edition (professional statement) -> effective 2019

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40
Q

When was RICS Service Charge guidance last updated?

A

2018 - 1st edition (professional statement) -> effective 2019

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41
Q

What are 3 of the mandatory principles of RICS service charge professional statement?

A
  1. All expenditure the owner/manager seeks MUST be in accordance with the lease
  2. Timely issue of SC budgets (minimum 1 month)
  3. Ensure apportionment matrix and explanatory comments issued with budgets
  4. SC monies held in one or more individual bank accounts
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42
Q

What does the Service Charge usually include / exclude?

A

Exclude:
- Improvements above usual cost of repair
- Future redevelopment cost
- Void costs

Include:
- Maintenance contracts
- Repair to communal areas
- Utility chrges

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43
Q

What are some of the core principles of the service charge statement?

A
  • Procure services on a value for money basis
  • Have clear policies on how to manage services
  • Ensure prompt paymnet from occupiers for SC
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44
Q

What are some of the limitations of the Service Charge professional statement?

A
  • Cannot override the lease
  • Extent of following best practice is dependent on property (e.g size, nature) -> proportionality
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45
Q

Tell me about an element of service charge best practice?

A
  • Standard and quality service provision
  • Value for money
46
Q

What do chapters 2, 3 and 4 of the service charge proffessional statement relate to?

A

2 - Mandatory requirements
3 - Core principles
4 - Best practice

47
Q

What do the appendices of the SC proffessional statement provide?

A
  • COmpliance checklist
  • Standard industry cost classifications
  • SC accounting sample report
  • SC handover procedures
48
Q

What are the timescales for reporting within the SC professional statement?

A
  • issue budget minimum 1 month before accounting period
  • issue reconciliation within 4 months of SC year end date
49
Q

What is a budget?

A

The expenditure estimated by the Landlord or its manager that will be incurred in the accounting period

50
Q

What is a management fee and what does the SC professional statement say about them?

A

The reasonable price for managing the provision of services and fulfilling the principles of the professional statement

  • set on fixed price basis
  • cannot override lease cap
50
Q

What is a management fee and what does the SC professional statement say about them?

A

The reasonable price for managing the provision of services and fulfilling the principles of the professional statement

  • set on fixed price basis
  • cannot override lease cap
51
Q

What is your duty of care in relation to service charge?

A
  • Duty of care to both owners and occupiers to act with professional care, iligence, integrity and objectivity
  • Duty to manage the property
51
Q

What is your duty of care in relation to service charge?

A
  • Duty of care to both owners and occupiers to act with professional care, iligence, integrity and objectivity
  • Duty to manage the property
52
Q

How does ADR relate to SC under the professional statement?

A

ADR is supported and recommended as the basis to resolve SC disputes

  • lease should make a provision for ADR
53
Q

Tell me about allocation under the SC professional statement

A

spliting of costs and services to assign them to specific schedule or cost category

54
Q

Tell me about apportionment under the SC professional statement

A

Basis and method of apportionment should be fair and reasonable
- occupiers bear an appropriate propertion of total SC expenditure reflecting the benefit and use of services

-> floor area basis

55
Q

Tell me about communication under the SC professional statement

A

Managers certificate of SC expenditure should be supported by an independent review of the SC account

56
Q

Tell me about financial competance under the SC professional statement

A

Statements / certificate of expenditure issued in non-partisan spirit, acting as experts

Industry Standard Cost Classifcations used in reporting budget and actual expenditure

57
Q

Tell me about consultation in the service charge professional statement

A
  • All occupiers are given the oppertunity to comment on the budget
  • Occupiers are consulted on the levels of service required and introduction of new services
58
Q

Tell me about occupier responsibilities in the SC professional statement

A

Should ensure prompt payment of SC and BSC and recognise the SC provision of the lease has legal effect

59
Q

What are the remedies for default?

A
  • CRAR
  • Rent deposit draw down
  • Statutory demand
  • Winding-up petition
  • Claim on AGA
  • Peaceable re-entry
  • Payment plan
60
Q

What is CRAR and when did it come into force?

A

Commercial Rent Arrear Recovery -> 2014

61
Q

What did CRAR replace and how does it differ?

A

Common law right to levy distress

  • CRAR only applies to leases and not licences
  • Only applies to rent
  • minimum 7 days rent outstanding
  • Only available for commercial
  • 7 days notice prior to seizing
  • Agents only attend in business hours
62
Q

What are the requirements of CRAR?

A
  • Minimum 7 days rent outstanding
  • 7 days notice
  • Details included within notice and served in a specific way
  • 12 months to seizegoods from notice served
  • seized only in business hours
  • Tools of the trade (up to an aggregate value of £1,350) are exempt
  • hold goods for 7 days
63
Q

What goods can be seized by CRAR and by whom?

A
  • only goods belonging to the tenant
  • Cannot recover tools of the trade up to an aggregate value of £1,350
  • Cannot recover goods being used
  • Enforcement agents can seize
64
Q

Can the tenant appeal CRAR?

A

Yes, the tenant has the right to apply to the court for an order that no further steps be taken under CRAR without permission of the court

65
Q

What is a statutory demand?

A

Written notice from creditor -> will state that is debt is not paid, or arrangement made, within 21 days, creditor can apply to make you bankrupt

65
Q

What is a statutory demand?

A

Written notice from creditor -> will state that is debt is not paid, or arrangement made, within 21 days, creditor can apply to make you bankrupt

66
Q

What are the timescales under a statutory demand?

A

21 days to pay debt or make arrangement

67
Q

When can a statutory demand be served?

A

Minimum £750 outstanding

68
Q

When can a statutory demand be served?

A

Minimum £750 outstanding

69
Q

What is the next step following a statutory demand?

A

Winding-up petition

70
Q

What is a winding-up petition?

A

Statement of intent to credit to shut-down business due to unpaid debt
- 7 days before financial info becomes public

71
Q

Under what legislation can you pursue a former guarantor?

A

Section 17 f the Landlord and Tenant (covenant) Act 1995

72
Q

What notices must be served on a former guarantor and what are the relevant timescales?

A

Section 17 notice -> within 6 months of the debt arising

73
Q

What is a bailiff?

A

Legal officer to whom some degree of authority or jurisdiction is given

74
Q

What is TORT notice?

A

Legal document alerting the owner of items that have been abndoned / left on private land or property

75
Q

What is peaceable re-entry?

A

Physically re-entering the property, when it is empty, to regain possession of the unit (changing the locks)

76
Q

How can you avoid recognising the continuance of a lease?

A

Do not communicate with the tenant
Rent stop -> don’t demand sums

77
Q

What is a continuing breach?

A

Re-occurs every day -> a fresh right of forfeiture arises each day

  • breach of user clause
  • Breach of repair covenant
78
Q

What is a once and for all breach?

A

Right to forfeit is lost upon waiver

  • pay rent
  • carry out repairs by a specified date
  • assign or sub-let
79
Q

What does the leasehold property (repairs) Act 1938 say about breaches of covenant to rpair?

A

Limits landlords rights to claim damages or forfeit for disrepair during the current tenancy (3 years unexpired on a 7+ year term)

80
Q

What is a S.146 notice? What time frames relate to it?

A

Section 146 of the Law and Property Act 1925
- Served by a landlord who wishes to commence forfeiture proceedings against a leaseholder following a breach of lease
- Remedy within a ‘reasonable period’ -> dependds on nature of breach

81
Q

Talk to me about relief from forfeiture?

A

tenant can claim relief from forfeiture
- required to remedy the breach in entirety to be successful

No strict time limit, however usually 6 months maximum to apply for relief

82
Q

Can you claim service charge in CRAR?

A

No, CRAR is for rent arrears only

83
Q

What should you consider prior to forfeiture?

A
  • Commercial advantage from forfeiting
  • Waiving rights to forfeit
  • Relief from forfeiture
  • Evidence to forfeit
  • Time frames
84
Q

What are void costs and what do they include?

A

Costs attributed to vacant units

  • Rates
  • Utility bills
  • SC for the vacant unit
85
Q

Tell me about RICS guidance on Licence for Alterations

A

RICS Licence for ALterations in Commercial Property, 2nd edition, January 2022 (guidance note)

86
Q

How would you consider the impact of proposed alterations on building operations?

A
  • nuisance to tenants if multi-let
  • impact on landlord systems and equipment
  • Impact on energy performance
  • Completely within Tenant demise?
  • Obligations on consent?
87
Q

How do dilapidations relate to alterations?

A

Licenec to Alter is an extension of the lease and so will be considered at lease end -> required to reinstate to original condition -> included within dilaps

88
Q

What H&S considertions relate to alterations?

A
  • Risk assessment & site specific method statements
  • Permits required (working from height / hot works)
  • Asbestos register
  • Construction Regulations (2007) apply to refurbishment
89
Q

How do MEES relate to alterations?

A

Reasonable to withhold consent if alterations negatively impact EPC

90
Q

What levels of approval decisions are there in granting alterations?

A
  • Approved
  • Approved with modifications
  • Approved subject to conditions
  • Rejected
91
Q

Can consent for alterations be provided retrospectively?

A

Yes
Can also rentalise unauthorised works at next RR depending on lease

92
Q

How did you advise on the Licence to Alter at Glasshouse Yard?

A
  • Received application including comprehensive plans
  • Reviewed lease to determine obligations and what tenant is permitted
  • Advised my Client we had recieved a request and that third party input was required due to complex M&E
  • COnfirmed fees with tenant
  • M&E experts and building surveyors reviewed and approved works
  • CIF drafted and sent recommending the works are approved, stating the associated lease clause
  • Client approved and sols drafted LTA
  • Works completed and i inspeted to ensure all in accordance with Licence
93
Q

What fees were involved with the Licence to Alter at GHY?

A

Workman fees
Legal fees
Building Surveyor fees
M&E consultant fees

94
Q

What factors need to be considered in a Licence to Alter?

A
  • nature of works
  • Impact on building operations
  • Impact on energy performance
  • Warranties
  • Dilaps / reinstatement provisions
  • Equality Act compliance
  • Improvements
  • H&S
95
Q

How did you assess your competancy in relation to the Licence to Alter at GHY?

A

Reviewed the plans provided

96
Q

What legislation are you aware of in relation to applications to assign?

A

Landlord and Tenant Act 1988
Landlord and Tenant (covenant) Act 1995

97
Q

Why did you request financial information in the Licence to assign?

A

To determine tenant covenant strength and allow me to make a well-informed recommendation to my Client

98
Q

Did you undertake a credit report on the proposed tenant in the Licence to Assign, if so, what was the result?

A

Yes -> credit safe report
Scored 39 -> moderate risk

99
Q

What is an authorised guarantee agreement

A

Agreement where the outgoing tenant guarantees the performance of the incoming tenant in terms of adhering to their lease covenants

100
Q

Would your advice have differed if the Tenant was of a stronger covenant strength?

A

Potentially -> less need for AGA or additional deposit, however, still useful to provide Landlord with additional security

101
Q

How did you assess covenant strength in the Licence to assign?

A
  • Reviewed companies house
  • Creditsafe report
  • Financial review
102
Q

Under what circumstances is it reasonable to reject as assignment request?

A
  • Stipulated in the lease. -> usually if incoming Tenant cannot meet liabilities under lease or if there is a breach in lease covenant

if relying on lease or providing consent with conditions, likely that no statutoryduty is breached

103
Q

Can you refuse an assignment based on the fact property value is reduced as a result?

A

No -> Landlord and Tenant Act 1988 -> reasons for withholding for consent not to be unreasonably delayed

104
Q

What would you do if you discovered unlicenced works on review or assignment?

A
  • potential to reject assignment
  • rentalise unlicenced works on review
  • retrospective licence
  • S.146
105
Q

What is a PPM?

A

Planned Preventative Maintenance

106
Q

Why is a PPM beneficial?

A
  • Ensure issues are identifed before they develop further
  • Assists with management -> less need for major unplanned repair work
  • Ensures H&S compliance
  • Adds value by preserving condition
107
Q

What areas of concern were highlighted by the PPM in Riverbridge House?

A
  • Fire escapes in below average condition - repairs and redecorations required
  • 4 roofs all in poor condition
  • Staircase floor tiles and carpet in poor condition -> heavy traffic
  • Allowances included to repair the damaged and soiled metal composite cladding
108
Q

What works were undertaken at Riverbirdge as a result of teh PPM?

A
  • Fire escapes and roofs have been repairs / redecorated
  • Lower priority items to tke place in Year 2 of structured repair plan
109
Q

How were PPM costs incorporated into the budget?

A

PPM detailed a structured spending plan to complete priority works

3 year structured budget recover plan , reducing high outlays to tenants

Detailed explanatory comments included

110
Q

Whatis a tender?

A

Silent auction

Contractors submit bids for the work, addressing each details in the scope of works

111
Q

What are the benefits of tendering

A
  • Ensures value for money
  • Ensures quality
  • Required by Workmans purchasing policy
  • Ensures best fit for work
  • Market awareness
112
Q

What is your firms purchasing policy?

A
  • obtain 3 or more competitive quotes for works over £5k
  • use Workman approved contractors only
  • Keep records on EFS
  • works / purchases awarded by Workman standard Purchase Order
113
Q

Were there any improvement works incorporated into the PPM works?

A

No -> if there were these would have to be capital expenditure from Client, not SC recoverable

PM - Summary of Experience - APC (16 decks)

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