Practice relations to Residential Property Management

Katie Shellard
Flashcards by Katie Shellard, updated more than 1 year ago
Katie Shellard
Created by Katie Shellard over 2 years ago
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ARLA Property Flashcards on Practice relations to Residential Property Management, created by Katie Shellard on 05/26/2018.
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Under common law, whose interests must the agent put first? Landlord's
5 requirements for the Agent under common law relevant to property management? - Act with reasonable skill and care - Not to make a secret profit - Account to client in full - Not to delegate instruction - Not to allow a conflict of interest
Examples of using reasonable skill and care? Advising LL of legal obligations Using app't contractors Aware of appliance guarantees Repair rather than replace
Examples of secret profit? Contractor offers financial incentive
Account to client in full includes? Pay LL rent asap Pay rent in advance at once CPUTR 2008 - pay rent within 1 month
Why is 'delegation' in the terms of business? Without, it would not be possible for agent to to instruct a contractor
Overriding responsibility to LL is? x 3 1. Meet statutory obligations 2. Use LL's resources effectively 3. Maximise LL's investment
Obligations under the terms of business Agent must follow terms of business e.g periodic visits CPRs require client to have full details of the management service before commitment
Redress schemes - date and names of schemes? 1st October 2014 agents must belong to a dress scheme - The Property Ombudsman TPO - Ombudsman Services - Property Redress Scheme PRS
Complaint to the redress scheme can result in...? x 5 - Apology from agent - Reprimand - Compensation to the complainant - Fine up to £25,000 - Expel member Complainant can still go to court Penalty of £5k if agent not a member
What is the purpose of a routine property visit? - See if tenant is in breach of agreement - Report any maintenance issues
Notice of a visit must be? 24 hours written notice Deemed served by hand next day before 5 Visit in line with time away from property Courts can sanction a visit
Main legislation covering LL's obligations to look after the property are ? x2 LL and Tenant Act 1985 Housing Act 2004
Section 11 LL and Tenant 1985 x 3 responsibilities of the LL? - Fabric and STRUCTURE of the property - Supply of SERVICES, inc sanitary ware - Supply of space HEATING & hot water Tenant must allow access under Sec 11(6) of LL and Tenant act 1985
HHSRS introduced under which legislation? 3 main types are? Housing Act 2004 Dwelling house free from 29 hazards - 1. physiological, 2. psychological and 3. harm/infection LA can issue improvement notices or hazard awareness. Cat 1 & 2 hazards
What should LL do re legionella? - Risk assessment - Ensure hot water is 60 degrees + - warn tenants re infrequent showers - keep records of checks - undertake periodic inspections
Property defects - leans to walls are caused by? Roof spread - can worsen. Not urgent repair of rafters Bulges - gable wall not restrained Outer leaf of cavity walls - too few ties
Types and causes of wall cracks Horizontal cracks - due to vertical mov't Vertical cracks - due to horizontal mov't Settlement - takes place when property built Steel lintels rust over doors & widows Vertical cracks - due to heating/cooling
Diagonal cracks are due to? Forces that act at an angle - when part of a building moves Or timber lintel failure
Subsidence is? When weaker ground causes movement - eg burst water main, defective drain or tree root Diagonal cracking at ground level
Problems of flat roofs? x 3 Ponding Blistering Ridges
Defects associated with the damp proof course? - Blocking of the cavity - Breakage of the DPC - Breaching DPC by build up of soil by wall
Causes of wet rot to timber? Roof leak Gutter leak Pipework leak Condensation Defective/missing DPC
Where is Dry rot found? Starts in dark unventilated spaces eg under floors Extends beyond the damp area
Distance for positioning flues away from doors and windows? 300mm from doors and windows
NICEIC recommend inspection of electrical every? 10 years or change of ownership HMOs every 5 years
Part P electrical work regulations cover? From January 2005 Notifiable work Work in special locations Must be done by a competent person All work must comply with BS7671
Competent person is someone registered with schemes...? x 5 NICEIC BSI Napit Bre Elecsa
Notifiable work includes...? New circuit New consumer unit Swimming pool/sauna room Circuit in a 'special location'
Gas boilers must be replaced by a...? Condensing boiler, since 2007 Should have TRVs
Hazardous materials? x 2 Register? Radon - odourless, colourless gas, ventilation or membrane Asbestos - if not releasing fibres, leave. Special Waste Regulations 1996 Must keep a register of any asbestos since 2004
Obligations on the tenant to take care of the property would be: - Covenants in the tenancy - Implied obligations; not to damage the property, maintain garden, repair/replace any damages To carry out small jobs, pay rent, report faults
Obligations of the agent regarding maintenance are? x 3 Not to allow LL to breach obligations Spend clients' money wisely Identify who is responsible for costs
Landlord's choice of contractors - what should be included in the terms of business? Suitably qualified for the work Evidence of qualifications Refuse to instruct if unqualified Instruct different contractor if unavailable
Name of the scheme to insure properties in high risk flood areas? Flood Re Excludes houses built after 1/1/09 Excludes highest council tax band H
Check buildings insurance covers what? Kitchen and bathroom fitments White goods, curtains, carpets
Types of insurance are for LLs? x 6 Buildings Contents Public liability - usually contents Appliance insurance Legal protection - fees and court costs Rent guarantee
Types of insurance for an agency? x 5 Employer's liability - legally required Professional indemnity - no legal req't but demanded by professional bodies-neglgnc Buildings and contents Fidelity - client money protection ins Car
Advice to LL regarding insurance under duty of care? In tenancy LL contracts to insure the property Also included in agents terms of business LL must inform own insurance co PI required
What insurance activities are regulated by the FCA? - By way of business -Giving ADVICE, eg insurance is high/low - ARRANGING insurance as go-between - ADMIN ins contract, claim, negotiation
Insurance levels of service x 4 PRINCIPAL firm - directly reg'd by FCA APPOINTED rep - reg'd by principal INTRODUCER appointed rep - gives leaflets for principal firm & pass customer details on NON-REG'D introducer - leaflets to take away
If asked, agent can carry out non-regulated activity such as...? x 6 Advise LL to take out insurance Pay an initial premium Pay a renewal premium Instructing contractor in emergency Getting quotes in emergency Forwarding completed claim form in emergency
Contractors working on gas appliances must be registered with? Gas Safe Register and work on appliances under National Accredited Certification Scheme or ACS
Qualification for electricians is? Part P qualified Member of approved body
Contractors working on windows and doors must be members of FENSA - fenestration self assessment scheme Sign off work & register with LA
Inventory providers may be registered with? Association of Professional Inventory Providers APIP
Choosing contractors - Public liability insurance - Employers liability - Recommendations - Safety policy - Companies house search - Professional indemnity insurance? neglign
Terms of engagement with a contractor will include...? - Method of payment - Detailed invoice - carry ID - phone from site if problem or no access - not to use tenants' goods - recall if work unsatisfactory - any guarantee - out of hours work - key collection - Public liability insurance - No instructions from tenant - Risk assessment or method statement
Why is the invoice from the contractor needed? Shows LL carrying out repairs not improvements May be a guarantee
Client money include ..? x 4 TYPES Rent Deposits for applicants and tenants Contingency for repairs Any money held for another
For the client account, the agent must.. Be able to identify the money for client/tenant Reconcile account Not to deduct fees without authority Audit annually - required by professional body Terms of business state how money is to be paid to client
who gets the interest on deposits? - Agent for LL - whoever receives the money - Stakeholder - usually the agent Best to include in contract terms of business Tenancy deposit scheme - will depend on scheme used. Written consent
Can charges be made for writing debt chase letters? Yes, if it is in the tenancy contract and charges are fair (UTCCR 1999)
Why should the agent communicate terms of business in writing before the start of a business relationship? - Under terms of professional bodies - Under terms of redress scheme - Under CPR
Why does the agent have to declare any conflict of interest or connected person? - Common law requirements - Regulatory bodies - Redress scheme - Under CPR
Consumer Protection from Unfair Trading Regulations 2008 To be open and honest to LL and tenant Fees Explicit at an early stage In written form & on website Rounded view of the property Advise on tenant giving notice CMA - Guidance for lettings professionals
Competition and Markets Authority guidance doc https://www.gov.uk/government/news/cma-publishes-consumer-protection-guidance-for-lettings-industry
Taking a complaint at face value when not true breaches Harassment - Protection from Eviction Act 1977
Remedies for the LL for breach of the contract? Damages eg loss of rent Specific performance -fulfil obligations Injunction eg stop making noise Possession
Noise coming from 'fixed premises' is covered by? - Environmental Protection Act 1990 Environmental department at LA can issue abatement notices Or individual can take action through court
Noise from dwelling AT NIGHT is covered by? The Noise Act 1996 Between 11:00 p.m and 7:00 a.m. Police can confiscate equipment
Actions following discovery of damage to the property by tenant? Discuss with tenant Confirm in writing for tenant to repair Visit property If not complete, write to tenant Give notice that contractor will do work If access denied, make file note Make claim at end of tenancy, deposit
Breach by having pets? Court not likely to see this as serious Unless serve S21 notice
Examples of LL breaches? x 6 - Quiet enjoyment - Maintenance to property - Insuring property - Repairing electrical equipment - Repair in line with Section 11 LL&T 1987 - Not providing LL's address Sec 47 LL&T 1987
Options for the tenant if LL breaches the lease? - Withold rent. Must demonstrate money is put aside - Offsetting rent for work to be done - Repudiation of the lease, if severe breach
Role of agent at end of tenancy will be ? Establish any breach by tenant Assess damages and prepare cost schedule Assess if costs are LL or tenant
Lord Denning 1953 said? To use the premises in a tenant-like manner Do little jobs which a reasonable tenant would do Not damage wilfully or negligently If damaged, by family/friends, then repair
Fair wear and tear, based on? Length of tenancy Number and age of tenants Condition, age, cost of item at start Useful lifespan of item Reasonable usage of the item
What is Voluntary waste? Tenants cause damage to the property by their action. Or anyone who came into to do work on the tenant's property
What is permissive waste? Inaction of the tenant has caused damage
What are the 3 remedies for damage by the tenant? Repair Replace Compensate
Return of deposits - Stakeholder Get agreement from both parties If not agreed, Alternative Dispute Resolution process via scheme Pay out non-disputed amount within 10 days of agreement
Process for deposit return for stakeholder not protected by a scheme? Get parties to agree Part/all distributed Receive notification of agreement both If not agreed, go to court or use ADR
Betterment means? Apportionment is? Betterment - LL cannot expect improvement Apportionment - allow for fair wear and tear
What is a renewal? A further fixed term tenancy
What is an extension? Becomes periodic - statutory periodic for a HA tenancy
Does deposit need reprotecting? Only if parties to tenancy change or property changes
How often are electrical tests required for HMOs? Every 5 years
Requirements for HMO management? x 5 For NON-licensed and licensed Electrical installations Fixtures, fittings, appliances Information to occupiers Waste disposal facilities Fire safety arrangements
NATIONAL Statutory requirements for a licensed HMO? x 6 - Provide gas certificate to LA annually - safe furniture - automatic fire detection system - declare fire alarm locations to LA - tenants must have a tenancy agreement - Property must be in good repair
LA's own HMO conditions for bathrooms? - Bathroom not more than 1 floor away - Max no people per bath/shower - Tiling to bathroom - Ventilation, heating, flooring - Max no people per toilet - Hot/cold hand washing per toilet - Facilities fit for purpose
Local Authorities also have HMO conditions for kitchens? - Adequate space for food prep & cooking - Provision of cookers - Elec sockets in room - Food storage - Work surface, sinks, draining boards - Impervious floor coverings - Fire detection and fire blankets
PLANNING restriction for HMOs? Permitted development to change from Planning category C3 (ordinary residential) to C4 (HMO) LA may require planning permission for ordinary HMO
If planning is required, what do you do about extra occupier? Issue licence to occupy, in case planning turned down or costs are prohibitive and need to terminate license
HMO breaches by LL might include? - allowing too many to occupy - not having a licence - refusing to repair - build up of rubbish
Actions by agent if LL in breach of HMO? - Write to LL - Advise LA can carry out the work OR serve an improvement notice OR take over management of property - Disinstruct LL - Agent has equal responsibility as LL
From what date must all agents belong to an approved redress scheme? October 2014
What are the 3 regulatory bodies? ARLA RICS - blue book, ARLA endorsed NALS (National Approved Letting Scheme)
Regulatory body sanctions include...? - Suggest changes to practice - Formal warning - Fine unto £200 per breach - Disciplinary hearing £5k per breach - Suspending membership
What are the 3 redress schemes? TPO (most popular) Ombudsman Services Property PRS
Requirements for membership of TPO? - Display ombudsman logo - Advise at point of instruction - Leaflets available on request - Acknowledge written complaint in 3 days - Respond to complaint in 15 days - Review procedure if not satisfied TPO notified within 6m of final offer from member
Maximum award from TPO compensation is? £25,000 but most less than £500
Ombudsman will reject cases ...? x 4 - Raised maliciously - More than 12m after event - 9m after complaint raised - 6m after agents' final response
Ombudsman sanctions are...? x 7 - Agent rectifies problem - Agent apologises - Written explanation - Informal warning - Fine - Compensation up to £25k - Banning agent from scheme
Mediation/conciliation is? - Independent 3rd party negotiates dispute - Voluntary - Encouraged by courts - Private interviews - Not very common - Not binding on the parties
Adjudication is...? - More formal than mediation - Results are binding - Common in construction industry - Used in tenancy deposit scheme - Evidence based
Arbitration/independent expert? - More formal still - Written submissions - Indep experts use own knowledge
Small claims court if no recognised body or redress scheme ...? - Claims less than £10k - Claim interest - Claim form, cost fee - Defendant can not respond, acknowledge, admit claim, enter defiance, counterclaim
If a complaint is likely to result in a compensation claim, what should the agent do? Put their professional indemnity insurance on notice
What can a Principal firm do? Regulated directly by the FCA Offer a range of insurance products Range of insurance providers Handle claims Large firms, insurance brokers
Appointed representatives? Regulated by a chosen principal firm Offer certain products from principal Can take premiums Can claim settlement cheques Can be appointed to several firms
Introducer appointed representatives can? Gives out information from principal firm Generally leaflets Pass customer details to principal firm
Non-regulated introducer? ONLY provides leaflets to take away NO intro, negotiation, selling, admin
Consumer protection Regulations CPRs require the agent to be? Open and honest with all parties Charges Terms of business must be explicit what fees will be charged Sufficient info given to make decision Include detracting features
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