SofE - Leasing & Letting Flashcards
What is the Code for Leasing Business Premises (2020)
A professional standard used to improve transparency, clarity, and fairness within leasing negotiations.
It sets out a new set of HoTs which are used so that both parties understand exactly what they are agreeing to.
Key takeaways:
1. HoTs must be STC for VP letting
2. Lease negotiations must be approached in a collaborative manner
3. Must advise unrepresented parties to seek representation
What is the estate agents act? Its principles?
A law regulating estate agents so that they act in their clients and the publics best interest.
Principles are:
1) Be honest
2) Don’t discriminate
3) Agreement and liability for costs
4) Keep client monies separate
5) Comply with Terms of Engagement (s18)
6) Openness regarding personal interest (s21)
7) Legal obligation to tell clients about any offers
What is commercial estate agency act (2016)? And its principles?
Mandatory professional statement to improve best practice - there are 12 principles:
1) Be Honest
2) Work with due skill, care and diligence
3) Avoid conflicts
4) Don’t discriminate
5) Use Professional Indemnity Insurance
6) Clear communication
7) All advertising to be true
8) Keep client monies separate
9) All viewings carried out with LL consent
10) Use realistic assessments on pricing
11) Each party to be clear of each others obligations
12) Provide fair terms of business
What is CAT B?
Refurbished office space which has been fitted out and ready for immediate occupation. It is a growing trend which is typically seeing higher rents of £10psf premium to CAT A space.
Walk us through your retail disposal in Birmingham?
I was instructed to market a small retail unit in Birmingham. This was an existing instruction and my firm had already completed the relevant CDD checks and I checked we had signed terms of engagement.
Following several viewings, I received an offer from a tattoo business and discussed this with my client.
The retail units current use was Class E and a tattoo business needed Sui Genesis - I informed the tenant that they would need a change of us.
I advised the client that the terms be a subject to an AFL.
Given the tenant was a start up business and had no audited accounts I recommended a security deposit.
With all parties agreeing I drafting Heads of Terms and followed the process to completion.
How do you get a change of use?
Need to get LL consent.
Need to contact the Local Planning Authority and follow directions.
What is an agreement for lease?
It is a contract outlining the conditions for a future lease. Typically used in pre-lets for development projects.
What is a security deposit and how do you determine when you need one?
A security deposit is money from the tenant held in a 3rd party account which the Landlord can obtain if the tenant breaks their obligations within the lease.
Use NET ASSET TEST or NET PROFIT TEST
What happens between going under offer and exchange and completion?
Heads of Terms
Contract
CPSEs (set of questions)
Surveys
Agree contract
Exchange
Completion
Can you walk us through your warehouse disposal in Birmingham?
This was a new instruction so I completed KYC, AML and COI checks.
I then received signed terms of engagement.
I pulled together an in house brochure as the client didn’t want to spend too much on marketing - given the size of the units - being around 500 sq ft and simple but informative 2 page brochure was the most optimal.
While the client was being cost effective and did advise him to erect a board on the estate as it was a prominent location with a lot of footfall.
We conducted a media marketing campaign using several data bases like Rightmove, Zoopla, LoopNet and separately conducted a LinkedIn post.
I conducted several inspections with various parties and received a suitable offer not long after. I drafted Heads of Terms and consequently followed the process to completion.
What are the size requirements for marketing boards?
2 sqm board
Must be removed within 2 weeks of a letting
Can you run us through the regional office disposal in Halesowen?
Completed CDD and got signed ToE
The property had been vacant for over a year and recently had received a CAT A refurbishment to improve the let ability.
We were seeking offers for both leasehold and the freehold
After a marketing process we received 2 offers one for leasehold and one for freehold.
We advised for the leasehold offer as this was the clients preference from the outset and it was proposed by a profitable tenant alongside good terms. The FH offer was subject to 3rd party finance and signifcantly below what we were quoting.
The tenant wanted to make alterations so we used a license to alter - which essentially is a document permitted the tenant to make alterations subject to LL consent.
I prepared Heads of Terms and followed the process to completion.
Run us through the office acquisition instruction you undertook for offices near Blythe Valley Park
A client contacted us explaining they were looking for a new office HQ centre in an out of town location within a 10 mile radius of Blythe Valley Park.
After going through the relevant CDD and receiving confirmed instruction through signed terms of engagement we commenced a process.
I ran an OAS search which captures the attention of all the leasing agents in the area detailing them of our clients requirements.
The agents sent through various possible options for us to use and I populated into a report.
I also used websites and data bases such as CoStar and Rightmove to look for any other options which may have been missed and before adding to the report I verified the information with the respective agents.
I discussed the options with my client and advised that an existing option may suit their requirement better - given their stance on ESG. I also detailed the risks associated with pre-lets on development agreements such as the contractor going burst.
