What happens if there is a failure to complete on a property?
Serve a notice to complete, legal costs covered by purchaser – deadline to complete.
Rescind the contract – sue for damages of loss
What are the 4 methods of sale?
- Private Treaty – target purchasers, no commitment
- Formal Tender – closed market bids
- Informal Tender – best bids date
- Auction – hammer falls = contract
Difference between formal and informal tender
- Formal = control and transparency – high level of public confidence – bid is contractually obliged
- Informal = no obligation to accept the highest or best bid
Selling by informal tender how would you finalise bid?
- Letter to parties outlining the date and time of best bids
- Name and addresses of applicants solicitors
- Confirmation of finance arrangement
- Detail of any conditions attached to offer
- Confirmation that offers of a variable nature not considered
- Vendor reserve the right to not accept any bid made
What are the 6 principles of estate agent act?
- Clarity as to terms of agency
- Quantity and accuracy
- Agreement and liability for costs
- Openness regarding personal interest
- Absence of discrimination
- Legal obligation to tell client of offers
- Keep clients money separate
What is meant by ‘Caveat Emptor’?
‘let the buyer beware’
Producing marketing boards, what’re legislation around this?
- Not protrude more than 1M
- No less than 2.3sqm
- No greater 4.6M above ground
- 14 days after completion of transaction
- PP required for boards on Listed Buildings and in Conservation Areas
- Governed by Local Authority
What is a protected tenancy?
Tenant benefits from security of tenure - right to a fair rent
Contractual tenancies
What is a Tenancy at Will?
tenant occupies indefinitely – flexibility right to terminate at any point
Give me some of the main points you should consider when inspecting the exterior of a property for valuation purposes
Location / aspect (prime etc), form of construction, any defects, condition, occupation, contamination / environmental hazards, access, parking
Give me some of the main points you should consider when inspecting the interior of a property for valuation purposes
Layout, spec, repair, defects, services, statutory matters, fixtures and fittings, any tenants improvements
What is the standard specification / condition of a retail unit when leased?
Shell condition with shop front ready for retailers fit out
What should you do if you suspect a defect?
Take photos, report, recommend appropriate professional reports
What is in a typical rent review clause?
Higher of passing rent or OMRV, RPI
What are some of the usual assumptions and disregards?
- Willing parties
- Vacant possession
- If destroyed that its been rebuilt
- Ready for immediate beneficial occupation i.e. fitted out.
Disregards (s.34 L&T Act 1954) - Occupation by the tenant
- Any goodwill from the tenant being in occupation
- Tenant’s voluntary improvements
What are the fundamental principles that make a lease different from a licence?
Fixed term, defined rent, exclusive possession
What are the differences between Independent Expert and Arbitrator?
Arbitrator
Arbitration Act 1996 – sets procedure. Sections 16-18 set out process whereby parties appoint an arbitrator and the powers by which the court can give direction. Section 43 of the act allows arb tribunal to call a witness. Can also make an order for discovery if they believe a party is withholding info.
- Section 68 provides mechanism for setting aside the award of an arb tribunal on the basis of procedural irregularity.
- Section 69 allows a challenge of arbitrators award on question of law.
Yes. The fact an arbitrator benefits from immunity means they are more likely to put their neck out in a moving market provided the case is properly argued.
Free to dictate the apportionment of costs to either party.
Can only make decisions based on parties’ submissions.
Independent Expert
Governed by the terms of the contract and the appointed expert’s terms of reference. Cannot call witnesses.
Expert’s decision is binding.
No. Independent experts should consider limiting their liability in their initial terms of engagement i.e. that they are not liable for damages beyond a capped amount. It may also be possible to agree immunity from suit.
Usually equitably split unless otherwise stated in the lease i.e. ‘or by direction by the expert’ in the rent review provisions.
Not limited to parties’ submissions. Usually and generally make their own investigations.
When are the usual quarter days?
25 March, 24 June, 29 September, Xmas Day
What is time of the essence?
- If not accepted in certain timeframe the proposing party (usually landlord)’s offer is deemed accepted.
In what situation would you advise a client to serve a section 26 notice?
S.26 – Tenant’s request for a new tenancy. Notice period - no more than 12 months and no less than 6 months from expiry of the lease. Landlords counter notice within 2 months. CANNOT serve S.25 back or vice versa.
- When doing the lease renewal, under what sections does the court set the new terms for the lease?
Sections 29 - 35
Name 6 key principles of estate agent act.
- Clarity as to terms of agency
- Quantity and accuracy
- Agreement and liability for costs
- Openness regarding personal interest
- Absence of discrimination
- Legal obligation to tell client of offers
- Keep clients money separate
What is the difference between sole selling and sole agency rights?
Sole selling rights – agent liable for a fee no matter how contract finalised
Sole agency – agent receives fee if providing purchaser
Informal v formal tender
Formal tender - unless otherwise stated highest bid accepted. Tender pack provided with all information on property - enables purchaser to make best decision
Informal tender - best bids approach
