SW Q's (Ethics, PM, LL&T) Flashcards
What are the main aspects of the RICS Rules of Conduct?
1) Honesty, integrity and professional obligations
2) Maintaining and acting within competence
3) Providing good quality service
4) Respect and encouraging diversity and inclusion
5) Public interest, responsibility and public confidence
What date is the RICS Rules of Conduct effective from?
2nd February 2022
What are the aims of the updated RICS Rules of Conduct?
- Simpler structure
- Provide clear examples
- Focus on respect, diversity and inclusion
- Respond to evolving technology
- Tackling global challenges
What does the RICS Conflicts of Interest professional standard outline and when is it effective from?
Provides clear rules for RICS members and regulated firms to identify and manage potential conflicts of interest (effective 01/01/2018)
Informed consent must only be sought when all parties agree that proceeding is in the interest of all parties
What are the 4 offences under the Bribery Act?
- Bribing another person
- Being bribed
- Bribing a foreign public official
- Failure of commercial organizations to prevent bribery
What is your firms policy regarding bribery and corruption?
-Undertake customer due diligence
-Bound by laws of Bribery Act 2010
-Take zero tolerance approach to Bribery/corruption
-Committed to acting professionally, fairly and with integrity
Are you aware of any RICS mandatory regulations relating to bribery/corruption/money laundering?
RICS Professional Standard (Bribery, Corruption, Money Laundering and Terrorist Financing) 1st ed Feb 2019 - Effective September 2019 (Proff standard in July 2023)
Outlines requirements to comply with local laws
Must report suspicious activity
Must not accept/offer bribes
What are the considerations within the RICS ethics decision tree?
- Legality of action under law
- Does it comply with RICS rules and professional standards
- Is it consistent with public interest
- Is it consistent with Rules of Conduct
- What are the consequences of your actions
- Seek guidance if unsure
What are CPD requirements?
20 hours a year, of which at least 10 hours must be formal CPD.
How do I ensure compliance with my firms policy regarding bribery and corruption regarding gifts?
- Regularly read and understand the policy outlines prohibited behaviors and consequences of non-compliance
- Conduct due diligence on third parties (suppliers/agents/contractors)
- Keep records of business dealings that may be scrutinized under the laws/firm policy
- Undertake regular training
Report any suspicious activity to partner
ONLY ACCEPT GIFTS WHEN RECEIVED OPENLY AND TRANSPARENTLY LOGGING ON GIFT REGISTER - NEVER ACCEPT CASH OR EQUIVALENT
RICS professional standard that governs service Service charges and when is it effective from?
RICS professional standard: Service charges in commercial property (1st edition, 2018)
RICS guidance note that governs property management?
RICS guidance note: Commercial property management in England and Wales (2nd Edition, 2011).
What are typical headings in an office budget?
Management fees, accounting fees (audit fees at YE), utilities (gas, electricity, water), soft services (security, FoH, cleaning), hard services (m&e fees, redecoration, lift fees), and any major project works.
What are the common methods of apportionment for service charges?
Floor Area basis, weighted floor area, percentage, or Rateable Value.
When should a service charge budget be produced according to RICS guidance?
One month prior to SC year.
When should a service charge be reconciled according to RICS guidance?
Within 4 months.
What are the consequences of delays in reconciliations?
Tenant can complain to RICS of persistent delays.
What is the difference between sub-letting and assignment?
Assignment transfers legal interest to the new tenant, forming a new relationship with the landlord;
sub-letting forms a relationship between the sub-tenant and the original tenant, while the original tenant and landlord retain their relationship.
What statute governs consents for License to Alter applications?
S1 of LL & T Act 1988
S19 of LL & T Act 1927.
What are the usual assumptions for a rent review?
a) premises is fit for immediate use and occupation
b) market rent will be payable after any incentives/rent free
c) tenant has complied with existing lease covenants
d) no work has been carried out by the tenant that has reduced the rental value
e) if the property has been damaged or destroyed then it has been reinstated.
What are the usual disregards in a rent review?
a) tenants’ previous occupation
b) any goodwill
c) certain improvements
d) any licence to sell intoxicating liquor belonging to the tenant.
What are examples of special assumptions in a rent review?
a) planning permission has or will be granted
b) if vacant then let on defined terms
c) if let then vacant
d) any redevelopment or works have been carried out according to plans.
What is a Calderbank offer in relation to a rent review?
A party may seek to settle and protect themselves against liability for costs by making an unconditional offer to settle on specified terms, expressly stating the right to refer the offer to the arbitrator after he has made his award except for costs.
What options for resolution exist if a rent review could not be agreed?
Independent expert or arbitrator, depending on what is stated in the rent review clause of the lease.
What are the usual contents of a rent review clause?
- Normally upwards only and time is not normally of the essence.
- Assumptions:
- Premises are fit for immediate use and occupation
- Market Rent will be payable after any rent-free period for fit-out works
- No work has been carried out by tenant that has reduced the rental value
- If premises have been destroyed/damaged, they have been reinstated
- Tenant has complied with covenants in the lease.
What are the usual disregards in a rent review clause?
- Tenant previous occupation
- Any goodwill
- Certain improvements
- Any licence to sell intoxicating liquor if that licence belongs to the tenant.
What are the three main factors to be covered within a rent review clause?
- Machinery for effecting the rent review
- Basis of valuation
- Means of settling a dispute.
What is in a Rent Review memo?
- Name of both parties and company registration numbers
- Address of property
- Date of lease and rent review
- Confirmation of new rent
- Signed and dated by both parties.
What would you advise your client if rent review negotiations hadn’t been straightforward?
- Calderbank offer
- Arbitrator/independent expert.
What is the hypothetical term on a rent review?
Something other than remaining term on the lease, e.g., if lease was initially 10 years, it could be this.
What’s the difference between the Lease Renewal and Rent Review procedure?
A lease renewal is a statutory procedure.
A rent review is a contractual procedure.
What lease terms affect the rent at review?
The rent review clause itself - definiton of rent, assumptions we need to make, and matters that are disregarded
The frequency of review (the longer the period between reviews, the higher the rent)
Restrictions on user/alienation, insurance provisions, repairing liability etc
Overall, the more flexible a lease is, the higher the rent
Protected tenancies (inside 1954 act) should demand higher rent - T has security at lease expiry
What does it mean if a tenant’s lease is within the Landlord and Tenant Act 1954?
They have security of tenure – tenant can remain in occupation on the agreed terms of the lease at the end of the term until the tenancy is terminated in accordance with the act.
What makes up the contents of the section 25?
- Name and address of landlord and tenant
- Address of property
- Notice to end tenancy - either friendly or hostile
- Notice of date a response is required by
- Landlord proposals for new tenancy if friendly
- Landlord ground(s) for opposition if hostile
- Recommendation to tenant to seek professional advice.
What are the implications of the Landlord and Tenant Act 1988?
Not to be unreasonably delayed.
Where do hypothetical terms originate from?
They originate from Section 34 of the Landlord and Tenant Act 1954.
When was the Landlord and Tenant Act 1954 last amended?
1st June 2004
What sections are in part 1 of the Landlord and Tenant Act 1954?
Section 1 to 22
What sections are in part 2 of the Landlord and Tenant Act 1954?
Sections 23 to 43
What does section 23 of the Landlord and Tenant Act 1954 outline?
Tenancies to which the Act applies.
What does section 43 of the Landlord and Tenant Act 1954 outline?
Tenancies to which the Act doesn’t apply to.
Name the tenancies to which the 1954 Act does not apply.
- Agricultural holdings
- mining leases
- residential tenancies
- tenancies granted as a condition of employment
- tenancies not exceeding 6 months unless:
a) there is a provision for extension or;
b) T has been in occupation for more than 12 months
What does security of tenure mean?
Tenants can remain in occupation on the agreed terms of their lease until the tenancy is terminated in accordance with the act.
Name the different ways in that a tenancy within the Act may come to an end?
Tenant vacated the unit on the last day of the lease term.
Landlord serves notice of termination (S25)
Tenant requests a new tenancy (S26)
Tenant serves notice of termination (S27)
Landlord and Tenant agree terms for a new tenancy (S28)
What can the landlord do if the tenant doesn’t move out/vacate the unit are justifiably being opposed to a new tenancy under S30(1)?
The landlord can double the tenants rent from the date the Landlord gives notice (as per Landlord and Tenant Act 1730).
What are sections 24-28 of the act?
- S24 is holding over/interim rents
- S25 is landlord termination
- S26 is tenant request
- S27 is tenant termination
- S28 is landlord/tenant agree new lease.
What are the 7 grounds under section 30?
- A) Breach in repairing obligations
- B) Tenant persistently late in paying rent
- C) Substantial breach of another covenant
- D) Suitable alternative accommodation offered
- E) Uneconomic sub-tenancy
- F) Landlord intends to demolish/reconstruct
- G) Landlord intends to occupy the premises.
NOTE = E, F and G are “No-Fault Grounds”
What compensation is payable under S30?
- If the tenant has been in occupation for 14 years + = 2x rateable value
- If the tenant has been in occupation less than 14 years = 1x rateable value.
What does ‘time of the essence’ mean?
If time is of the essence, the timescales in the lease must be strictly adhered to.
When is time of the essence?
Time is of the essence when:
a) the lease explicitly states it
b) lease makes it clear that the time limits are strict
c) tenant serves notice making time of the essence
d) there are deeming provisions.
What happens if the lease does not expressly state that time is of the essence?
Time is not of the essence, as held in the Burnley and Cheapside cases.
