Leasing & Letting

Where the tenant underlets or assigns the lease

AGA

When the tenant is able to assign the lease subject to LL consent, NTBUW

• Yes, if you assignees financial strength is not good enough 
• Where the existing tenant has arrears of rents, service charges or insurance premiums that are not the subject of a
• legitimate dispute

RICS Global RE Agency and Brokerage Professional Statement 2016

RICS UK Commercial Estate Agency Professional Statement 2016

It is the mandatory rules and guidelines for RICS members involved in agency work

• Acting Ethically 
• Securing instructions
• Marketing the property 
• Method of disposal 
• Acquisition of property

The Purple Book

• OML
• Acquisition 
• Subleases 
• Assignments

• Agency basis: sole / joint 
• Proposed fee
• Marketing costs and disbursements
• Timescale for the payment of fees 
• Confirmation no conflicts of interest   
• CHP 
• Signatures and dates

• Sole agency - one agent on the instruction
• Joint agency - two agents share a fee regardless of who introduced 
• Multiple agency - a number of agents on the instruction in a winner takes all basis

• Sole agency rights - due a fee only within the instruction 
• Sole selling rights - due a fee after the instruction if it was introduced by them during the instruction

• The Code for Leasing Business Premises 2020 
• Estate Agents Act 1979 
• Misrepresentation Act 1967 
• Unfair Trading Regulations 2008

It is for the disposal and acquisition of land and property, and is based on 7 key principles; 

• Clarity in terms of agency 
• Honesty and accuracy 
• Agreement and liable for costs 
• Legal obligation to inform client of offers received
• Keep clients money separate 
• Against all discrimination 
• Openness in terms of personal interests

• Policed by Trading Standards Office (local authority) 
• Warning order 
• Prohibition order 
• Fine

• S18 - Terms of business
• - Specify all costs 
• - Itemise all payments 
• S21 - Declaration of personal interests

Relates to new lettings in England and Wales 

As of September 2020 it is a professional statement therefore mandatory

Improve quality and fairness during lease negotiations 

Promote the importance of using a comprehensive HOT's

If a party is unrepresented, the surveyor must stress the importance of the code

Outline the importance of using a comprehensive set of HOT's

4 parts; 

• Introduction 
• Mandatory requirements 
• Lease negotiation best practice 
• Appendices (comprehensive set of HOTS's)

• Request rent deposit and / or guarantee 
• Bank, accountant and 2 x trade references 
• Previous / existing LL reference 
• 3 years audited accounts / credit rating (D&B) / business plan 
• Apply profits test which is Net Profit needs to be 3 x the annual rent for 3 consecutive years

It is the misrepresentation or false statement of truth which may induce a party to acquire

• Sued for financial damages or contract rescinded
• Civil

• Limits liability of negligent statements 
• Disclaimer states the details are produced in good faith 
• Interested parties should make their own investigations

Hedley v Byrne 

Test of reasonableness to apply to agents liability for negligent statements

• 1. Foreseeability 
• 2. Fairness 
• 3. Proximity

Protects consumers against unfair trading and misleading information.

Applies from business to consumer before throughout the whole agency process

Providing misleading information such as the property is comprised of 2k sq ft when in fact it comprises of 1k sq ft 

Marketing a property in a way that may confuse consumers 

Displaying aggressive tactics that may impair the consumers freedom of choice

• Unlimited fine
• Prohibition order 
• Up to £25k compensation payable to consumer
• Criminal act

• Misrepresentation Act 1967 
• For pre contractual agreements

• Consumer Protection Regulation 2008 
• Throughout the whole process

Reasonably well informed person

Gives new rights and remedies for consumers 

Letting agents must declare their costs on their website and in the office 

Information must be provided on who is responsible for which costs

• Lease term 
• Break
• Alienation 
• RR 
• Restrictive user clause 
• Security of tenure 
• AGA
• Use

When you acquire legal ownership through undisturbed timings of more than 10 years

Time is always of the essence with a strict timetable

• Is it mutual or one party
• What is the notice period 
• Is there a break penalty 
• Are there any preconditions such as returning the property in good order and payment of rent

• Payment of all rent 
• Covenants observed by the tenant 
• Vacant possession

• The lease - shall be executed once the developer has fulfilled their obligations 
• Licence to alternations - tenant able to undertake fit out works 
• Specification of plans 
• Warranties - any tenant taking an FRI lease will want collateral warranties with main contractor, professional team and any sub contractors with an design input

• Receive instructions 
• CIT check 
• ML check 
• Understand clients aims and objectives 
• Inspect and measure 
• Research comparable evidence 
• Form opinion of value 
• Prepare marketing report 
• Undertake marketing campaign 
• Arrange inspections 
• Receive interests and report through all interests and offers to client 
• Negotiate offer and agree TOE 
• Instruct solicitors 
• Complete 
• Invoice

Not if it is within the allowed sizes

• Flat boards under 2 sq. m 
• V Boards under 2.3 sq. m 
• 1 board per building 
• Sub 4.6m in height
• Must not project more than 1m from the face of the building

Within 14 days of completion

• Illuminated boards
• Remote boards 
• Boards erected on listed buildings

It is a Transfer of Going Concern 

If the asset is neither a supply of goods nor a supply of services

The purchaser intends to use the assets to carry on the same kind of business as the seller

Where the seller is a taxable person, the purchaser must be a taxable person already or become one as the result of the transfer

The asset is neither a supply of goods nor a supply of services and the purchaser must carry on the same business

YES. They must be VAT registered or register for VAT

A form of tax relief when constructing or purchasing a commercial asset

They can generate tax savings / relief on the value of plant and machinery such as air con and lifts

Provides a framework for electronic property conveyancing by allowing formal documents to be executed electronically 

All leases for longer than 7 years must be signed and registered with land registry

2030

Compliant lease plan

• Drawn to metric scale (1:200 or 1:200) 
• Scale clearly identifiable
• Scale bar 
• Include a 1:1250 location map 
• Full address and postcode 
• A north point 
• Demise highlighted in red on inside of structural walls

• Existing client wanted to acquire a site in Dartford after successfully acquiring 6 sites for them 
• I created a requirements flyer and sent this to the relevant agents and around on PIP
• Received a number of properties
• Shortlisted the properties down to 5 outlining benefits and limitations and arranged an inspection on all 5 
• Agreed with client which unit was the most beneficial and submitted an offer subject to contract 
• Negotiated the terms 
• Agreed Heads of Terms 
• Concluded and completed transaction 
• Invoiced client 
• Recorded appropriately

• Existing client wanted to dispose of the leasehold interest 
• Received all material matters relating to the property 
• Carried out Due Diligence such as obtaining EPC and rates 
• I inspected and measured the property 
• Collated comparable evidence 
• Formed opinion of value 
• Drafted marketing particulars in accordance with Misrep Act 1967 and got them checked by client before making them available 
• Carried out GAP analysis
• Conducted viewings 
• Received two offers, one from A5 and one from A1 
• Client had concerns surrounding A5 occupier due to historical difficulties in obtaining A5 consent 
• Agreed with A1 charity shop occupier 
• Agreed Heads of Terms 
• Instructed solicitors 
• Completed

• Existing client on shopping centre instruction we are already on
• Carried out required due diligence including obtaining a EPC for the property 
• Inspected and measured property 
• Search and selected comparable evidence 
• Formed opinion of value for the property 
• Drafted marketing particulars in accordance with Misrep Act 1967 and got them checked with client before uploading 
• Fully marketed the property 
• Received an offer almost immediately for the property 
• Negotiated and agreed HoTs 
• Instructed solicitors 
• Completed

Can be applied to the owner of any asset over £50k where the government has reasonable grounds for suspecting criminal funds

• The ability to compromise on certain aspects 
• Ensure you have full statement of facts 
• Discuss alternative options 
• Avoid disputes from escalating