RICS Commercial property management in England and Wales · that property managers should bear in...
Transcript of RICS Commercial property management in England and Wales · that property managers should bear in...
Commercial property managementin England and Wales
RICS Practice Standards, UK
2nd edition, guidance note
Commercial property managementin England and Wales2nd edition, guidance note
This guidance note details best practice in the management ofcommercial property, with particular emphasis on how the person(s) incontrol of a building should manage, communicate and control incomeand expenditure, as well as minimise the various associated risks.
The guidance applies to all members who undertake propertymanagement for the landlord as managing agent, although the generalprinciples apply to any property manager.
The guidance note is focused primarily on the management ofcommercial properties in England and Wales, however, special mentionis made of mixed use developments. A summary of the main areas ofEnglish statute law relevant to the management of a commercialproperty is also provided.
rics.org/standards rics.org/standards
GN 89/2011
Commercial property management in England
and Wales
RICS guidance note
2nd edition (GN 89/2011)
Published by the Royal Institution of Chartered Surveyors (RICS)
Surveyor CourtWestwood Business ParkCoventry CV4 8JEUK
www.ricsbooks.com
No responsibility for loss or damage caused to any person acting or refraining from action as a result of the material included in this publication can be accepted by the authors or RICS.
Produced by the Commercial Property Professional Group of the Royal Institution of Chartered Surveyors.
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COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | iii
Acknowledgments iv
RICS guidance notes 1
1 Introduction 2
2 Purpose and scope 3
3 Overview – key principles 4
3.1 Acting as agent of the landlord 4
3.2 Managing third party suppliers 4
3.3 Duty of care 4
4 The property manager’s core duties 5
4.1 Liaising and reporting with the landlord 5
4.2 Collection of monies 5
4.3 Client accounts 5
4.4 Defaulting occupiers 5
4.5 Service charge 6
4.6 Deposits 6
4.7 Managing the building 6
4.8 Management policies 7
4.9 Insurance relating to the property 7
4.10 Occupier liaison 8
4.11 Energy management 8
4.12 Building management systems 9
4.13 Health & safety and fi re safety 9
4.14 Procurement of third-party suppliers 9
4.15 Management fees 10
5 Additional responsibilities of the property manager 11
6 Landlords’ responsibilities to the property manager 12
7 Employees and employment law 13
8 Specialist issues 14
8.1 Managing a portfolio 14
8.2 Mixed use developments 14
8.3 Offshore ownership 14
8.4 Duty of care deeds 15
8.5 Insolvent landlords and LPA receivers 15
Appendix 1 Main English legislation relevant to the management of a commercial property 16
Appendix 2 Property management contract 34
Contents
iv | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
RICS would like to thank the following individuals for their contributions to this guidance note:
David Lowe, lead author, Partner, Wragge & Co. LLP
David Gardiner MRICS, Director, Jones Lang LaSalle
Peter Thomas FRICS, Director, BNP Paribas Real Estate
And a special thanks to the RICS Property Management Group
Acknowledgments
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 1
RICS guidance notes
This is a guidance note. It provides advice to
RICS members on aspects of their work. Where
procedures are recommended for specifi c
professional tasks, these are intended to
represent ‘best practice’, i.e. procedures which
in the opinion of RICS meet a high standard of
professional competence.
Although members are not required to follow the
advice and recommendations contained in the
note, they should note the following points.
When an allegation of professional negligence is
made against a surveyor, a court or tribunal is likely
to take account of the contents of any relevant
guidance notes published by RICS in deciding
whether or not the member had acted with
reasonable competence.
In the opinion of RICS, a member conforming to
the practices recommended in this note should
have at least a partial defence to an allegation of
negligence if they have followed those practices.
However, members have the responsibility of
deciding when it is inappropriate to follow the
guidance.
Alternatively, it does not follow that members will
be found negligent if they have not followed the
practices recommended in this note. It is for each
surveyor to decide on the appropriate procedure
to follow in any professional task. However,
where members do not comply with the practice
recommended in this note, they should do so only
for a good reason. In the event of a legal dispute,
a court or tribunal may require them to explain
why they decided not to adopt the recommended
practice. Also, if members have not followed this
guidance, and their actions are questioned in
an RICS disciplinary case, they will be asked to
explain the actions they did take and this may be
taken into account by the Panel.
In addition, guidance notes are relevant to
professional competence in that each member
should be up to date and should have knowledge
of guidance notes within a reasonable time of their
coming into effect.
2 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
1.1 Management is about achieving defi ned
objectives that should be agreed with the client
at the outset of each instruction, particularly the
provision of quality services which are value for
money.
1.2 This guidance note is principally concerned
with how the person(s) in control of a building
should act and, in particular, how they manage,
communicate and control income and expenditure
while minimising the various associated risks.
Managers should at all times seek to comply
with the principles set out in this guidance note.
While this guidance note refers principally to the
management of multi-let properties, the principles
can be applied to the management of all types
of commercial property. The property manager is
commonly appointed on behalf of the landlord to
assist them with services that may include:
• meeting their investment objectives, e.g. to
preserve and enhance value or to facilitate a
future redevelopment
• maintaining comprehensive tenancy records
• discharging their obligations under leases
and ensuring tenant compliance with lease
covenants
• day-to-day tenant liaison and service
satisfaction
• ensuring that they meet their statutory
obligations
• operating the property day-to-day on a
sustainable basis including procurement of
cost effective facilities management services
• undertaking the fi nancial administration of the
property, including rent collection and service
charge administration
• ensuring that adequate insurance is in place
to satisfy lease covenant and any lending
institutions and administering any claims.
1.3 It should be appreciated that, subject to
the occupiers’ rights under the lease and the
law, the landlord has to decide what actions
to take or not to take in respect of a property.
Equally, the property manager must manage.
Nevertheless, effective management needs to take
into account what occupiers think. Occupiers are
landlords’ customers and business is generated
from satisfi ed customers. While the objectives of
landlord and occupier may differ, mutual benefi ts
will be derived through an understanding of each
party’s requirements and by co-operation, resulting
in fewer unforeseen disputes for the manager.
Effective communication is critical if success is to
be achieved.
1.4 A successful property manager must be
effi cient, effective and accountable. They should
be open about their methods of management.
Consultation and communication will invite
challenge, but they are essential if standards are to
be improved.
1 Introduction
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 3
2.1 This guidance note applies to all members
who undertake property management, for the
landlord as managing agent. However, the general
principles would apply to any property manager.
2.2 The purpose of this guidance note is to
summarise best practice in property management
of commercial properties and highlight key aspects
that property managers should bear in mind in
successfully managing a property.
2.3 It is focused on the management of
commercial properties in England and Wales (and
refers to English law throughout).
2.4 Although commercial property (i.e. offi ce,
retail, industrial) is the focus, special mention is
made of mixed use development where commercial
property is typically mixed with residential property.
2.5 This guidance note deals with property
management, not asset management or facilities
management.
2.6 Appendix 1 provides a summary of the
main areas of English statute law that are relevant
to the management of a commercial property,
accurate at the time of going to press. Please visit
www.legislation.gov.uk to check current information
on English law. Appendix 1 should be a useful
resource to property managers for checking they
have the procedures in place to manage these
legal responsibilities, and understanding the
context in which they provide their services. Please
note this information is not exhaustive and is not
intended to be legal advice – in specifi c cases it is
recommended that specifi c legal advice is sought.
2.7 This guidance note only provides an
overview. Other useful RICS documents that go
into more detail on property management include:
• RICS code of practice: Service charges in
commercial property, 2nd edition (2011)
• RICS information paper: Managing mixed use
developments (2009)
• RICS information paper: Commercial
property handover procedures (2011)
• RICS guidance note: Insurance for
commercial property managers (2011)
These can all be found at www.rics.org/standards.
2 Purpose and scope
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The overall objective for a property manager is to
act as an agent for the landlord to manage:
a) some or all of the responsibilities the
landlord has:
i. under the property’s lease, if any, from a
superior landlord; and
ii. under the property’s occupational
leases to occupiers and other
occupiers;
b) some or all of the landlord’s responsibilities
regarding laws in owning or operating a
property;
and support in:
i. making a fi nancial/economic success of
the property; and
ii. the successful use and operation of the
property.
3.1 Acting as agent of the landlord
3.1.1 It is an important principle that the property
manager manages the property on behalf of a
landlord. Although the landlord is delegating
the management of the property to the property
manager, the landlord still retains the primary
responsibility for the property. The landlord would
have made the necessary capital investment and
will therefore take the capital risk or reward arising
from that. This does not mean that the property
manager has no responsibility at all (see 3.3 on
duty of care), but it is important to bear in mind this
agency relationship.
3.2 Managing third party suppliers
3.2.1 The property manager will carry out some
signifi cant tasks, but many substantial aspects of
the operation of a building will be fulfi lled by other
suppliers such as various providers of facilities
management services (e.g. security, cleaning, plant
maintenance). Therefore, the property manager
ensures the property is successfully operated, not
necessarily by doing everything but by managing
others to do so.
3.3 Duty of care
3.3.1 The primary duty of care that a property
manager has is to his/her client, the landlord.
This is usually set out in the contract with the
landlord (see Appendix 2 on property management
contracts). Even in the absence of a written
contract the English courts are likely to fi nd that
a property manager has a ‘duty of care’ to the
landlord, which means that the property manager
will have legal liability if he/she is negligent – i.e.
fails to manage the property with reasonable skill
and care.
3.3.2 A property manager will not just have
responsibilities to the landlord; they will also have
signifi cant day-to-day contact with the occupiers,
among others. At the very least this creates
commercial and reputational duties to those
occupiers, and could have the potential to create
a legal duty of care to those occupiers. Therefore
a good property manager will need to ensure they
take good care of the occupiers and other relevant
stakeholders.
3.3.3 A property manager may also be asked to
agree to have a duty of care to parties providing
fi nance in connection with the properties being
managed (see section 8.4 on duty of care deeds).
3 Overview – Key Principles
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The property manager has two core duties, and
the application of the following points differs
between multi-let and single-let properties:
a) the collection of rent, service charge and
other sums, owing by the occupiers to the
landlord, from the occupiers; and
b) the management of the property.
4.1 Liaising and reporting with the
landlord
4.1.1 It is critical that the property manager
seeks to develop a positive relationship with the
landlord, understands the landlord’s objectives and
approach, and establishes a format and frequency
for reporting.
4.2 Collection of monies
4.2.1 A key role is the collection and management
of sums owing by occupiers relating to rent, service
charge, insurance, and any other sums due under
the lease. It is important that a property manager
has an established process in place to arrange for
the effi cient collection of these monies. This means
that a property manager will:
(a) have a thorough understanding of the
relationship between landlord, occupier and
other occupiers in the building;
(b) obtain, wherever possible, from the landlord,
copies of all relevant documents, leases,
licences and so on;
(c) understand from those documents the
payment obligations;
(d) maintain a database of the occupiers and
other occupiers to record the fi nancial
position with each of them;
(e) put payment processes in place so that
the occupiers are clear exactly how much,
when and to whom rent, service charges,
insurance, rents and other amounts are due;
(f) make sure the payment process is clear so
that no occupier or occupier can argue that
the amount due or the time of payment is not
known;
(g) have a mechanism in place to notify of any
default in payment or a dispute over any
payment and promptly report this to the
landlord in the manner agreed about such
default;
(h) have a process in place to pursue occupiers
for defaults in payments;
(i) have arrangements in place to forward sums
collected, less deductions, e.g. service
charge, on to the landlord. The landlord will
want these sums to be forwarded as quickly
as possible; and
(j) report to the landlord on the reconciliation of
the amount actually paid to the landlord and
the amount collected.
4.3 Client accounts
4.3.1 A key advantage of a property manager who
is professionally qualifi ed is the ability to use client
account arrangements, which the landlord can
have confi dence in as being subject to regulatory
review. Where the property manager is a member
of the Royal Institution of Chartered Surveyors
(RICS) they will be required to comply with the
RICS members’ accounts regulations (Rule 8, RICS
Rules of Conduct for Firms, version 4 (August
2010) is particularly relevant in this instance). RICS
Regulation has also issued a help sheet, Clients’
money: general advice for fi rms, that sets out
guidance in its requirements for the handling of
client money.
4.4 Defaulting occupiers
4.4.1 It is recommended that the property
manager agrees with the landlord how defaulting
occupiers should be dealt with; in particular, when
the landlord wants to be alerted to a default. As
a recommended minimum, property managers
should inform the landlord as soon as the property
manager feels it is sensible to instruct debt
collection agencies, to take legal proceedings to
recover monies owed, or take steps to repossess
the property under the lease terms.
4 The property manager’s core duties
6 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
4.4.2 It is important for the property managers,
if they do instruct a solicitor and/or a debt collection
agency on behalf of the landlord, to ensure it is
made clear to the debt collection agency/solicitor
that the property manager is acting on behalf of the
landlord and that all liabilities and costs arising from
the instruction will be for the landlord’s account.
4.5 Service charge
4.5.1 Calculating the service charge
apportionment and corresponding budget is a key
duty of the property manager and needs to be
handled with care. Occupiers will be anxious to
ensure that the service charge budget is appropriate
in its amount and allocation. Landlords will want
to ensure their obligations under the occupational
leases are fulfi lled and the property is properly
maintained. Service charges can be the cause of
signifi cant friction between occupiers and landlords,
which means the property manager will need to
take particular care to communicate in a clear and
transparent manner.
4.5.2 The property manager should keep monies
collected as part of the service charge in a separate
service charge account with transparent records
for all income and expenditure. The 2nd edition
of RICS code of practice, Service charges in
commercial property (2011) goes into more detail
on this.
4.6 Deposits
4.6.1 The property manager will need to review
the occupational leases and associated rent
deposit deeds to understand what deposits are
held and on what terms. It is recommended that the
property manager establishes a separate, interest-
bearing account to hold occupiers’ deposits and
manages the funds and any accrued interest in
accordance with the relevant legal documentation.
4.7 Managing the building
4.7.1 The landlord will have responsibilities to
ensure that the building is managed to its superior
landlord (if any), to its occupiers, licencees and
occupiers under the relevant lease or similar
document, and responsibilities in law. It is the
property manager’s responsibility to ensure that the
landlord understands their responsibilities, and that
these are appropriately delegated to the property
manager.
4.7.2 The property manager should ensure the
effective operation of the property. This means
ensuring the property is effi ciently managed;
anticipating and monitoring potential problems;
maintaining regular contact with occupiers; and
seeking to comply with the service charge budget.
4.7.3 In addition, it is essential that the property
manager has copies of all of the leases and
related documents relating to the relationship of
the superior landlord (if any), and with each and
every occupier, licencee and other occupier. It
is essential that the property manager reviews
and understands these documents and identifi es
any missing documents. If the property manager
identifi es any gaps or missing documents these
should be promptly notifi ed to the landlord. Please
note the landlords obligations under section 6.1.
4.7.4 The property manager should consider
maintaining an electronic database of all the key
documents, dates etc.
4.7.5 Handover from the previous property
manager (and handing over to the next property
manager) is an important process. The RICS
information paper, Commercial property service
charge handover procedures (2011) provides useful
information.
4.7.6 It is important that the property manager
has a good understanding of the landlord’s
legal responsibilities. Appendix 1 lists the key
statutory responsibilities in England at the time
of publication. It is the property manager’s
responsibility to keep abreast of developments and
advise the landlord of signifi cant changes.
4.7.7 It is important that property managers not
only ensure that they assist their landlord to fulfi l all
of their legal obligations, but also maintains records
to demonstrate that the property manager has
done so.
4.7.8 It is recommended that property managers
have clear policies setting out how they are dealing
with the review of documents related to the
building, compliance with all laws and so on.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 7
4.8 Management policies
4.8.1 It is recommended that policy documents
are kept by the property manager detailing the
following:
(a) calculation and management of the service
charge account;
(b) collection of rent, service charge and other
monies;
(c) repair and maintenance of the building;
(d) operation of the building;
(e) appointing and managing contractors;
(f) health and safety compliance;
(g) insurance;
(h) liaising with occupiers – generally, and also
specifi cally in relation to consents such as
consent to assign, consent to alter and so
on; and
(i) management of procurement.
4.9 Insurance relating to the property
4.9.1 The landlord is normally required under its
occupational leases to obtain insurance against
damage to the property, including loss of rent, and
public liability insurance, and the lease will usually
allow the landlord to charge the occupiers for the
insurance premium.
4.9.2 The advising on, brokering or arranging of
insurance policies is subject to various fi nancial
services regulatory requirements. This is a complex
area. For example, introducing the landlord to
an insurer or handling claims may or may not
be subject to regulation, depending on the
circumstances. If a property manager has agreed
to do more than simply collect insurance premiums
for occupiers in relation to an existing policy then
the property manager should check whether he/she
is therefore subject to fi nancial services regulations
and if so, what level of compliance is required and
how this will be achieved. Please refer to RICS
guidance note, Insurance for commercial property
managers, 1st edition (2011).
4.9.3 It is important for the property manager
to understand the insurance arrangements and
the property manager’s role in these insurance
arrangements as:
• a failure to have appropriate insurance in
place could create a huge potential claim if
there was a catastrophic loss. Making sure
insurance is in place is a simple step to
manage a huge risk;
• the property manager needs to understand
what is to be charged to and collected from
occupiers to pay for the insurance;
• the property manager needs to be able to
identify when it may be appropriate to make
an insurance claim.
4.9.4 It is sensible for the property manager to
hold appropriate public liability insurance. If a
person is injured while in the managed property
then they will consider making a claim against all
of the people involved – the landlord, the relevant
occupier, the relevant service provider (e.g. cleaning
contractor or security contractor) and the property
manager. This risk is especially high for buildings
open to the public with high footfalls, such as
shopping centres. Traditionally the landlord and
property manager hold separate public liability
insurance, recognising that their interests are
different. It is recommended that property managers
ensure that they factor in to their charges the costs
of securing public liability insurance (especially
where a high footfall public building is being
managed). If a property manager wishes to hold
no/minimal public liability insurance and rely on the
landlords insurance, then it is important that this
is expressly agreed in detail with the landlord to
ensure the property manager is not exposed. This
complex area is covered in the RICS guidance note.
4.9.5 The property manager will also need to
consider which insurances they are required to hold
by law; such as employers liability insurance and
motor insurance (if relevant), and those that are
sensible to hold.
4.9.6 The RICS guidance note, Insurance for
commercial property managers, 1st edition, (2011)
explains in detail the insurance covers required by
commercial property owners.
8 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
4.10 Occupier liaison
4.10.1 Seeking to create a good relationship
with occupiers is essential to good property
management. Therefore the property manager
should:
• ensure the occupiers know who the property
manager is and how to contact them;
• seek regular contact with each occupier;
• establish a regular occupiers forum;
• provide emergency contact details for out
of hours incidents e.g. a helpdesk facility
operated by a specialist third party or in
house operation;
• properly respond to occupier queries; and
• comply with the communication and
consultation provisions set out in RICS code
of practice, Service charges in commercial
property (2011).
4.10.2 Part of the property manager’s role is
to manage applications by occupiers under the
occupational leases, such as licences to assign,
alter and underlet. The property manager should
have a system in place to ensure these are dealt
with properly and effi ciently, reviewing them
and making recommendations to the landlord.
The property manager should bear in mind that
although these applications may seem routine,
to the occupiers they are often important and
therefore need to be managed accordingly. The
property manager needs also to ensure that it
acts in accordance with statutory requirements
under the Landlord & Tenant Acts (please refer to
Appendix 1).
A particular consideration is the issue of time
limits when responding to a tenant’s application.
In circumstances where a landlord is under an
obligation (direct or implied) to act reasonably,
the courts have determined that decisions must
be made within strict timeframes. Failure to issue
a decision within a reasonable timeframe could
expose the property manager (as agent for the
landlord) to a potential claim for damages should
the tenant subsequently lose an opportunity to
assign or sub let.
Therefore tenant applications must be reviewed
and handled expeditiously if there are direct or
implied obligations to act reasonably, and clients
will need to be advised of the time constraints
when matters are referred to them for decision by
the property manager.
The property manager may recommend to their
client that legal advice should be taken if the tenant
is not supplying suffi cient information required to
make a decision or the landlord wishes to refuse
consent.
4.11 Energy management
4.11.1 Energy management is increasingly
important with rising energy costs and growing
responsibilities around CO2 emissions and
energy conservation. The property manager
should be aware of any new regulations relating
to environmental performance of buildings. The
property manager also needs to ensure that energy
procurement, energy conservation and regulatory
competence is given a high profi le.
At the outset of an instruction the property
manager should determine whether or not
their client is obliged to provide annual Carbon
Reduction Commitment (CRC) returns and, if
so, ensure there are clear responsibilities for the
information required by the client, the timing of
the information and the format of the information,
e.g. electricity supply meter readings.
It should be noted that where a landlord is
responsible for the electricity supply for a multi-
let property, and there are sub-meters recording
consumption by the occupiers, the sub metered
supplies will still be recorded against the owner’s
consumption profi le.
In this event the property manager will also need
to consider the need to implement a recharging of
electricity consumption to the occupiers. The 2nd
edition of RICS code of practice, Service charges
in commercial property (2011) indicates that
‘reasonable administrative charges’ are appropriate
for a property manager operating a mechanism of
recharging utility costs.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 9
4.12 Building management systems
4.12.1 Many buildings now have a building
management system – in effect, an IT system to
operate the building. It is the property manager’s
responsibility to ensure the system is operating
properly and is maintained regularly, not least
because the system will be a key part of ensuring
compliance with the regulatory obligations applying
to the building.
4.13 Health & safety and fi re safety
4.13.1 A key role for the property manager is
overseeing health & safety and fi re safety in the
property, ensuring it is managed to comply with
all legal obligations. Keeping the building safe
and ensuring compliance with relevant legislation
will require the establishment of systems and
procedures to ensure statutory inspections are in
place and systems monitored. Appendix 1 sets out
the key legal rights which property managers need
to be mindful of.
4.14 Procurement of third party
suppliers
4.14.1 Many of the services required for the good
operation of a building e.g. security, cleaning and
plant maintenance will be provided by third parties.
To source these services the property manager will
normally enter into arrangements with third party
suppliers as agent for the landlord. This means
that the contracts (if properly created) are actually
between the landlord and supplier. This has the
effect that:
• the supplier is liable to the landlord for
the performance of the services, which
is important as the landlord is, in turn,
responsible to its occupiers;
• if the property manager changes, the third
party contracts will not be affected;
• ultimately the landlord is responsible for
paying the suppliers so if, for example, the
landlord becomes insolvent owing money to
the suppliers, the property manager is not
liable to the supplier.
4.14.2 It is recommended that the property
manager has an appropriate procedure for
selecting third party supplies to ensure that they
are capable, reputable and good value for money.
That procedure should identify when (e.g. annual
contract value trigger) a more formal competitive
tender should be used. Where the services
procured are substantial, consideration should be
given to using a procurement specialist.
4.14.3 The property manager should:
• ensure they have a comprehensive, signed
contract in place with all third party service
providers;
• ensure the contracts clearly state that the
property manager is entering the contract as
agent for the landlord;
• ensure the contracted scope of services is
clear;
• ensure that the contracts with the service
provider comply with any requirements
the landlords has included in its property
management contract (e.g. length of
contract);
• ideally, ensure that all contracts with service
providers can be terminated on one months
notice on sale of the property (see RICS
information paper Commercial property
service charge handover procedures (2011);
• consider including in the services contract a
performance management regime or service
levels;
• consider maintaining an electronic database
of suppliers and contracts.
10 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
4.15 Management fees
4.15.1 It is important that details of the property
manager’s fee, such as the amount, when and
how it is payable and the invoicing and reporting
processes are made clear to the landlord. RICS
guidance in relation to management fees is set out
in the RICS code of practice, Service charges in
commercial property (2011), which requires that:
‘…fees are set on a fi xed price basis rather
than being calculated as a percentage
of expenditure. Percentage is no longer
appropriate and is considered to be a
disincentive to the delivery of value for
money. The management fee should be
a fi xed fee subject to annual review or
indexation.
It is recognised that many leases refer to the
management fee as a percentage of the total
service charge or contain a percentage cap.
This guide cannot override the terms agreed
between the parties and recorded in the
lease.’
4.15.2 For the complete text of this clause please
refer to section 1.3 of the RICS code of practice:
Service charges in commercial property (2011). It
is worth noting here that the Code expressly states
that the cost of collecting rent should be excluded
from the service charge management fee.
4.15.3 It is also worth considering the following
when setting and administering the fee:
• Whichever means of fee calculation is
applied it is essential that how it is calculated
is clear.
• Consideration may be given to the impact
of voids in a property upon any formula for
calculating the fee.
• Where the term of the property management
is a signifi cant period, usually more than a
year, then consideration needs to be given to
how the fee will be adjusted or reviewed.
• It should be made clear whether the fee is
payable in advance or in arrears, monthly or
quarterly.
• Consideration should be given to the
reporting a landlord requires and invoicing
processes.
• The mechanics for payment will need to be
established. The property manager will want
to have express authority to deduct (to the
extent appropriate) payment from the service
charge account, and require the landlord to
fund the account if the service charge is not
adequate (e.g. vacant building, high level of
voids).
4.15.4 The property manager will not be able to
manage a property if the service charge account is
insuffi ciently funded. If the building is fully occupied
and occupiers are paying their service charges then
the service charge account should normally be
suffi ciently funded. However, property managers
should ensure a landlord continues to fund the
service charge account for any shortfall – such as
in relation to voids.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 11
5 Additional responsibilities of the property manager
5.1 As well as the core duties, property managers
often become involved in other property issues, for
example:
• acquisition and sale support and advice
• rent reviews
• rating reviews
• letting agency, and
• dilapidations advice.
5.2 Property managers should ensure that
any additional services (and their related fees)
are properly documented. Property managers
should be aware of the industry code for leasing
business premises – available from
www.leasingbusinesspremises.co.uk
12 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
6 Landlords’ responsibilities to the property manager
6.1 A key responsibility of the landlord to
the property manager is to provide information
regarding the property and the relationships with
occupiers. A property manager cannot effectively,
effi ciently and successfully manage a property
without that information. The property manager
should make the landlord aware that if the landlord
cannot provide all necessary information then the
property manager’s service will be impaired and
additional costs may be incurred. Where there is a
change in property manager the outgoing property
manager will provide the information to the
incoming property manager. The incoming property
manager needs to check the information received.
RICS’ information paper, Commercial property
service charge handover procedures (2011) goes
into more detail on handover from one managing
agent to another.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 13
7.1 The property manager will usually employ
one or more people whose duties will include
managing certain aspects of the property.
If a property is large or especially complex (e.g.
a shopping centre or multi-let offi ce) then it is
likely there will be a number of employees who
will focus on the management of the property or,
where applicable, a particular landlord’s portfolio
of properties. In addition, the various suppliers of
services to the property (e.g. security, cleaning and
so on) will also employ individuals who will spend
a signifi cant amount of their time working in or in
relation to that property.
7.2 This means that the employees of the
property manager and the service suppliers
to the property are likely to have the benefi t
of the Transfer of Undertakings (Protection of
Employment) Regulations 2006 (TUPE). TUPE
has the effect, in certain situations, of moving
employees automatically from old supplier to new
supplier. If mishandled it can present a signifi cant
liability to property managers. It is also often not
properly understood by landlords. Therefore it is
essential for property managers to understand
TUPE to ensure they understand and avoid the
risks and are able to explain them to landlords.
For further information please refer to RICS
information paper, TUPE – Information for property
managers (2009), which sets out the issues in more
detail.
7 Employees and employment law
14 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
8.1 Managing a portfolio
Where a landlord has a portfolio of properties and
a property manager is appointed to manage all, or
part, of them, it is possible to do that with a single
contract. When drawing up this contract it is worth
considering the following:
• how properties are added and removed (and
consequential impact on fees);
• TUPE – it is more likely the property manager
will have dedicated staff (not just on site but
also back offi ce) and therefore TUPE is an
increased risk;
• whether or not the types of service are the
ame across all properties.
8.2 Mixed use developments
8.2.1 Mixed use developments are those with a
mix of commercial and residential occupiers. There
are considerable differences between the nature of
managing a commercial occupier and a residential
occupier. The nature of managing residential
occupiers will vary further depending on whether
occupiers’ leases are assured shorthold tenancies
or long leases.
8.2.2 There is, in addition, signifi cant legal
protection for residential occupiers (see, for
example, the Landlord and Tenant Acts 1985 and
1987, the Commonhold and Leasehold Reform
Act 2002 and the Leasehold Reform, Housing and
Urban Development Act 1993). This means, for
example:
• residential leaseholders who pay service
charge can challenge any item of the service
charge before the Leasehold Valuation
Tribunal; and
• long-term contracts (i.e. more than 12
months) with service providers must be
the subject of consultation with residential
leaseholders.
8.2.3 The property manager must be clear on
the statutory requirements for administering
service charges in residential properties (or where
residential use forms part of a larger mixed use
property and contributes to a building or estate
service charge). The requirements must be adhered
to completely unless qualifying exceptions apply.
See the RICS information paper, Managing mixed
use developments (2009) for more information.
8.3 Offshore ownership
8.3.1 It is not unusual for properties to be owned
offshore, e.g. by a Jersey registered company, to
mitigate tax exposure. This raises three potential
issues, which the property manager needs to be
aware of and give due consideration to:
• Due diligence/Client ID. The property
manager will need to identify the client
and the benefi cial owners of the properties
being managed and fulfi l money laundering
requirements. This will be more diffi cult with
an offshore company, but equally that is why
this cannot be ignored. For further guidance,
please see the Money laundering guidance,
November 2010, co-authored by the National
Federation of Property Professionals,
Royal Institution of Chartered Surveyors,
Association of Relocation Professionals, and
the Association of Residential Managing
Agents.
• Non-resident landlord scheme. This is a tax
scheme operated by HMRC requiring UK
‘letting agents’ to deduct tax from rent they
collect for non-resident landlords, unless
the agent receives notifi cation from HMRC
that it can transfer rents to the non-resident
landlord without deduction of tax. The agent
will need to register with HMRC and account
to HMRC quarterly in respect of any tax
due to HMRC. The agent is also required to
complete annual returns to HMRC in respect
of income received for all non-resident
landlords.
8 Specialist issues
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 15
• It is often a requirement that the property
manager pays over VAT to HMRC as advised
by the client’s adviser. In these situations
the property manager will need a standing
approval from their client to take instructions
from their client’s adviser in respect of
amounts to be remitted to HMRC.
8.4 Duty of care deeds
8.4.1 A duty of care deed is a document between
a property manager and the landlord’s funder.
The purpose is to create a direct legal relationship
between property manager and funder, particularly
as to payment of rent, but also more generally.
They create additional risk for the property
manager. RICS’ information paper, Duty of care
deeds and commercial property (2009), explains
duty of care deeds in more detail and how property
managers should deal with them.
8.5 Insolvent landlords and LPA
receivers
8.5.1 If a landlord becomes insolvent then an
administrator, liquidator or Law of Property Act
receiver is likely to be appointed. Each of these
have different powers and approaches:
• An administrator will be looking to operate
the landlord’s business as a going concern
with a view to selling the business and
maximising the return to creditors. Therefore
to an administrator the property manager
is important to collect rent and manage the
building pending the sale of the business.
• A liquidator will be looking to liquidate the
landlord’s business – i.e. break up and sell
the individual assets. Usually an administrator
is appointed fi rst and the administrator often
concludes the best approach for the creditors
is to liquidate and then the administrator will
become a liquidator. Again to a liquidator the
property manager is useful to continue to
manage a building pending its disposal.
• A Law of Property Act receiver (LPA receiver)
is appointed by someone who has a fi xed
charge or mortgage over the property where
the owner has failed to make payments. The
LPA receiver is appointed as an agent to the
borrower, but the courts recognise that the
LPA receiver will take heed of the lender’s
interests. The exact scope of the LPA
receiver’s powers will depend on the detail
of the mortgage/charge agreement. An LPA
receiver is likely to wish to sell the property if
that is the best approach for the lender, but
where the better approach is to delay selling
then the LPA receiver may be prepared to
operate the building. The property manager
will therefore be useful to the LPA receiver in
these circumstances.
8.5.2 The property manager should:
• monitor the fi nancial health of the client
so that he/she can be aware of a potential
insolvency;
• ensure the contract with the landlord allows
the property manager to terminate on the
landlord’s insolvency, which means that if
the landlord becomes insolvent the property
manager at least has a choice; and
• contact the administrator/liquidator/
LPA receiver immediately if a landlord
becomes insolvent to request a copy of
their appointment; identify if the property
manager’s services are required; and obtain
confi rmation that the property manager will
be paid, preferably in advance rather than
in arrears. Given the onerous legal duties
that arise from owning a property then the
property manager’s services are likely to be
needed at least in the short-term, but the
property manager will require commitment on
fees before proceeding.
16 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
This schedule sets out the principle relevant
English legislation that applies to the operation of
commercial property.
The information is not exhaustive. In particular,
it focuses on legislation specifi c to property
management or arising in relation to a property.
It does not include the variety of laws that any
company will need to comply with.
A short summary is included for each item. This
is only intended to be a very brief summary for
reference and is not legal advice. Specifi c legal
advice should be sought to understand the impact
of legislation.
This is a list of English legislation only; outside of
England other legislation may apply
Appendix 1 Main English legislation relevant to the management of a commercial property
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 17
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
HE
ALT
H &
SA
FE
TY
1C
orp
ora
te M
ansla
ug
hte
r and
Co
rpo
rate
Ho
mic
ide A
ct
20
07
Th
is A
ct
cre
ate
s a
new
off
en
ce
in E
ng
lan
d a
nd
Wale
s o
r
No
rth
ern
Ire
lan
d,
wh
ich
en
ab
les
a c
orp
ora
tio
n t
o b
e g
uilt
y o
f
man
sla
ug
hte
r an
d h
om
icid
e.
An
org
an
isatio
n is g
uilt
y o
f th
is o
ffen
ce if
it c
au
ses a
pers
on
’s
death
du
e t
o a
gro
ss b
reach
of
the o
rgan
isatio
n’s
rele
van
t
du
ty o
f care
to
th
e d
eceased
.
An
org
an
isatio
n is o
nly
gu
ilty o
f an
off
en
ce if
the d
eath
was
cau
sed
by t
he w
ay in
wh
ich
its
activitie
s a
re m
an
ag
ed
or
org
anis
ed
by s
en
ior
man
ag
em
en
t.
2O
ccup
iers
Lia
bili
ty A
ct
195
7T
his
Act
imp
oses a
du
ty o
f care
on
pers
on
s o
ccu
pyin
g o
r in
co
ntr
ol o
f
an
y p
rem
ises in
rela
tio
n t
o v
isito
rs.
Th
e o
ccu
pie
r h
as a
du
ty t
o e
nsu
re t
hat
an
y v
isito
r is
reaso
nab
ly s
afe
wh
ilst
on
th
e p
rop
ert
y.
Th
e o
ccu
pie
r’s d
uty
of
care
is r
ela
tive t
o t
he v
isito
r (e
.g.
the
occup
ier
mu
st
be p
rep
are
d f
or
ch
ildre
n t
o b
e less c
are
ful
than
ad
ults).
Th
e o
ccu
pie
r w
ill n
ot
be r
ele
ased
fro
m lia
bili
ty b
y m
ere
ly
pu
ttin
g u
p a
warn
ing
sig
n,
un
less t
he w
arn
ing
sig
n w
as
su
ffi c
ien
tly c
lear
to e
nab
le t
he v
isito
r to
be r
easo
nab
ly s
afe
.
If in
jury
has b
een
cau
sed
to
a v
isito
r d
ue t
o f
au
lty w
ork
carr
ied
ou
t b
y a
th
ird
part
y (e.g
. su
bco
ntr
acto
r),
the o
ccu
pie
r
will
on
ly b
e r
ele
ased
fro
m a
ny lia
bili
ty if
he/s
he h
as t
aken
reaso
nab
le s
tep
s t
o s
atisfy
him
/hers
elf t
hat
the c
on
tracto
r
was c
om
pete
nt
an
d t
hat
the w
ork
had
been
do
ne p
rop
erly.
18 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
3O
ccup
iers
Lia
bili
ty A
ct
198
4T
his
Act
co
nfe
rs a
du
ty o
n t
he
occu
pie
r o
f a p
rem
ises t
o a
ny
pers
on
s o
ther
than
vis
ito
rs.
Th
e o
ccu
pie
r o
wes a
du
ty t
o a
ny p
ers
on
wh
o is n
ot
his
vis
ito
r
in t
he s
am
e w
ay a
s h
e o
wes a
du
ty t
o h
is v
isito
r if:
(a)
he is a
ware
of
an
y d
an
ger
or
hazard
on
th
e p
rem
ises o
r
has r
easo
nab
le g
rou
nd
s t
o b
elie
ve t
hat
on
e e
xis
ts;
(b)
he is a
ware
or
has r
easo
nab
le g
rou
nd
s t
o b
elie
ve t
hat
an
y
pers
on
is o
r m
ay b
e a
t risk f
rom
an
y d
an
ger
(th
is a
pp
lies
wh
eth
er
or
no
t th
e p
ers
on
is law
fully
or
un
law
fully
on
th
e
pre
mis
es); a
nd
(c)
the o
ccu
pie
r sh
ou
ld b
e e
xp
ecte
d t
o o
ffer
reaso
nab
le
pro
tectio
n a
gain
st
that
dan
ger
(i.e
. fe
ncin
g o
ff a
dan
gero
us a
rea o
r p
utt
ing
up
warn
ing
sig
ns).
Pla
cin
g a
sig
n t
hat
sim
ply
says ‘
Dan
ger’
will
no
t b
e s
uffi c
ien
t.
Th
e s
ign
sh
ou
ld s
tate
th
e n
atu
re o
f th
e d
an
ger
an
d s
om
e s
ort
of
pre
ven
tative m
easu
re s
ho
uld
be p
ut
in p
lace d
ete
rrin
g t
he
vis
ito
r fr
om
en
terin
g t
he p
rem
ises o
r p
reven
tin
g t
he v
isito
r
fro
m b
ein
g h
arm
ed
.
4H
ealth &
Safe
ty a
t W
ork
etc
. A
ct
1974
Th
is A
ct
co
nfe
rs a
du
ty o
n
em
plo
yers
to
en
su
re,
so
far
as is
reaso
nab
ly p
racticab
le,
the h
ealth
,
safe
ty a
nd
welfare
at
wo
rk o
f all
their e
mp
loyees.
Th
e e
mp
loyer
mu
st
pro
vid
e in
form
atio
n,
instr
uctio
n,
train
ing
an
d s
up
erv
isio
n t
o a
ll em
plo
yees t
o e
nsu
re t
heir s
afe
ty a
t
wo
rk.
He/s
he m
ust
als
o e
nsu
re t
hat
the p
rem
ises a
re m
ain
tain
ed
in
a c
ond
itio
n t
hat
is s
afe
an
d w
ith
ou
t risks t
o a
ny h
ealth
of
his
em
plo
yees.
Th
e e
mp
loyer
mu
st
pro
vid
e a
nd
main
tain
ad
eq
uate
facili
ties
for
the n
eed
s o
f h
is/h
er
em
plo
yees.
Th
is in
form
atio
n m
ust
be r
eco
rded
, an
d a
ll h
ealth
an
d s
afe
ty
measu
res (i.e.
fi re
ala
rms) m
ust
be t
este
d.
Th
e s
am
e d
uties a
pp
ly t
o p
eo
ple
no
t d
irectly e
mp
loyed
by
the e
mp
loyer, b
ut
do
ing
wo
rk o
n h
is/h
er
beh
alf.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 19
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
5M
anag
em
ent
of
Health &
Safe
ty a
t
Wo
rk R
eg
ula
tio
ns 1
999
(SI 1999/3
242)
Th
ese R
eg
ula
tio
ns c
on
fer
furt
her
ob
ligatio
ns o
n t
he e
mp
loyer
to
pro
vid
e f
or
em
plo
yees’
ad
eq
uate
health
an
d s
afe
ty.
Th
is in
clu
des
makin
g a
ssessm
en
t ch
ecks o
n
risks t
o e
mp
loyees’
health
. T
his
du
ty e
xte
nd
s,
for
exam
ple
, to
carr
y
ou
t p
ort
ab
le a
pp
lian
ce t
estin
g (P
AT
testin
g).
Th
e e
mp
loyer
mu
st
make a
su
itab
le a
nd
su
ffi c
ien
t
assessm
en
t o
f all
the r
isks t
o t
he h
ealth
an
d s
afe
ty o
f h
is/
her
em
plo
yees (an
d n
on
-em
plo
yees c
arr
yin
g o
ut
wo
rk o
n t
he
em
plo
yer’s in
str
uctio
n).
If t
he e
mp
loyer
em
plo
ys m
ore
th
an
fi v
e e
mp
loyees,
the
fi n
din
gs o
f an
y r
isk a
ssessm
en
t (a
nd
ho
w t
he fi n
din
gs m
igh
t
aff
ect
an
y g
rou
ps o
f h
is/h
er
em
plo
yees id
en
tifi ed
as b
ein
g
esp
ecia
lly a
t risk (i.e.
an
y d
isab
led
em
plo
yees)) m
ust
be
reco
rded
.
Th
e e
mp
loyer
mu
st
ap
po
int
on
e o
r m
ore
co
mp
ete
nt
pers
on
to a
ssis
t w
ith
co
mp
lyin
g w
ith
sta
tuto
ry p
rovis
ion
s f
or
health
an
d s
afe
ty (i.e.
a h
ealth
an
d s
afe
ty o
ffi c
er)
.
Th
e e
mp
loyer
will
pro
vid
e a
ll em
plo
yees w
ith
co
mp
reh
en
sib
le
an
d r
ele
van
t in
form
atio
n o
n r
isks t
o t
heir h
ealth
an
d a
ny
pre
ven
tative m
easu
res (i.e.
the h
ealth
an
d s
afe
ty r
isk
assessm
en
t/p
olic
y).
6T
he P
rovis
ion a
nd
Use o
f W
ork
Eq
uip
ment
Reg
ula
tio
ns 1
99
8
(PU
WE
R)
Th
ese R
eg
ula
tio
ns a
pp
ly t
o w
ork
eq
uip
men
t u
sed
by e
mp
loyees a
t
wo
rk,
an
d e
nsu
re t
hat
em
plo
yers
are
resp
on
sib
le f
or
the e
qu
ipm
en
t
used
by e
mp
loyees a
t w
ork
.
Every
em
plo
yer
sh
all
en
su
re t
hat
wo
rk e
qu
ipm
en
t is
main
tain
ed
in
an
effi c
ien
t sta
te,
in e
ffi c
ien
t w
ork
ing
ord
er
an
d
in g
oo
d r
ep
air.
(R
eg
ula
tio
n 5
(1) M
ain
ten
an
ce (P
UW
ER
, 1
99
8))
Th
e R
eg
ula
tio
ns o
nly
ap
ply
to
wo
rk e
qu
ipm
en
t u
sed
by
wo
rkers
at
wo
rk.
Th
is in
clu
des a
ll w
ork
eq
uip
men
t (fi x
ed
,
tran
sp
ort
ab
le o
r p
ort
ab
le) co
nn
ecte
d t
o a
so
urc
e o
f ele
ctr
ical
en
erg
y. P
UW
ER
do
es n
ot
ap
ply
to
fi x
ed
in
sta
llatio
ns in
a
bu
ildin
g.
Th
e e
lectr
ical safe
ty o
f th
ese in
sta
llatio
ns is d
ealt
with
by t
he E
lectr
icity a
t W
ork
Reg
ula
tio
ns.
20 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
7C
ontr
ol o
f S
ub
sta
nces H
aza
rdo
us
to H
ealth R
eg
ula
tio
ns 2
002
(as a
mend
ed
)
Th
ese R
eg
ula
tio
ns p
lace a
gen
era
l
du
ty o
n a
n e
mp
loyer, p
roh
ibitin
g
the u
se o
f cert
ain
su
bsta
nces a
nd
to c
arr
y o
ut
risk a
ssessm
en
ts o
r
pre
ven
tative m
easu
res t
o e
nsu
re
that
em
plo
yees a
re n
ot
exp
osed
to
hazard
ou
s s
ub
sta
nces.
Em
plo
yers
mu
st
no
t carr
y o
ut
wo
rk t
hat
may e
xp
ose
em
plo
yees t
o h
azard
ou
s s
ub
sta
nces u
nle
ss a
su
itab
le a
nd
su
ffi c
ien
t risk a
ssessm
en
t h
as b
een
mad
e.
Em
plo
yers
mu
st
als
o t
ake s
tep
s t
o m
inim
ise t
he e
xp
osu
re o
f its e
mp
loyees t
o
su
ch
ris
k.
Ris
k a
ssessm
en
ts m
ust
be r
evie
wed
reg
ula
rly.
If
an
y r
isk
assessm
en
t sh
ow
s t
hat
em
plo
yees a
re a
t risk,
the e
mp
loyer
mu
st
pre
ven
t th
e r
isk o
f exp
osu
re o
r, if
no
t p
ossib
le,
co
ntr
ol
the r
isk t
o t
he f
ulle
st
exte
nt
po
ssib
le.
Every
em
plo
yer
mu
st
als
o e
nsu
re t
hat
pers
on
al p
rote
ctive
eq
uip
men
t, in
clu
din
g p
rote
ctive c
loth
ing
, is
pro
perly s
tore
d,
ch
ecked
at
su
itab
le in
terv
als
, an
d if
dis
co
vere
d t
o b
e
defe
ctive,
rep
aired
or
rep
laced
befo
re f
urt
her
use.
It is t
he
em
plo
yer’s r
esp
on
sib
ility
to
ch
eck t
hat
this
eq
uip
men
t is
eith
er
mad
e s
afe
or
co
rrectly d
estr
oyed
.
Wh
ere
th
e r
isk a
ssessm
en
t in
dic
ate
s t
hat
em
plo
yees a
re
at
risk,
the e
mp
loyer
has a
du
ty t
o a
deq
uate
ly m
on
ito
r its
em
plo
yees t
hro
ug
h a
su
itab
le m
on
ito
rin
g p
roced
ure
. R
eco
rds
mu
st
be k
ep
t o
f th
e m
on
ito
rin
g p
roced
ure
.
8W
ate
r S
up
ply
(W
ate
r F
itting
s)
Reg
ula
tio
ns 1
999
Th
ese R
eg
ula
tio
ns s
eek t
o r
eg
ula
te
an
yo
ne w
ho
in
sta
lls,
alters
,
co
nn
ects
or
dis
co
nn
ects
etc
. w
ate
r
fi tt
ing
s.
Th
e p
urp
ose o
f th
ese R
eg
ula
tio
ns
is t
o p
reven
t w
aste
, m
isu
se
or
co
nta
min
atio
n o
f w
ate
r, f
or
exam
ple
, to
pre
ven
t le
gio
nella
(Leg
ion
naire’s
dis
ease).
Wate
r fi tt
ing
s m
ust
no
t b
e in
sta
lled
, co
nn
ecte
d,
arr
an
ged
or
used
in
su
ch
a m
an
ner
that
they c
au
se w
aste
, m
isu
se,
un
du
e
co
nsu
mp
tio
n o
r co
nta
min
atio
n o
f w
ate
r.
Every
wate
r fi tt
ing
mu
st
be o
f an
ap
pro
priate
qu
alit
y a
nd
sta
nd
ard
. (T
he s
pecifi c
req
uirem
en
ts a
re s
et
ou
t in
Sch
ed
ule
2 o
f th
ese R
eg
ula
tio
ns).
Wh
ere
a w
ate
r fi tt
ing
is in
sta
lled
, altere
d,
co
nn
ecte
d o
r
dis
co
nn
ecte
d b
y a
n a
pp
roved
co
ntr
acto
r, t
he c
on
tracto
r
mu
st
pro
vid
e a
sig
ned
cert
ifi c
ate
sta
tin
g t
hat
the w
ate
r fi tt
ing
co
mp
lies w
ith
th
e r
eq
uirem
en
ts o
f th
ese R
eg
ula
tio
ns t
o t
he
pers
on
wh
o c
om
mis
sio
ned
th
e w
ork
.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 21
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
9E
lectr
icity a
t W
ork
Reg
ula
tio
ns
1989 (E
AW
R) (S
I 1989/6
35)
Th
ese R
eg
ula
tio
ns im
po
se a
du
ty
on
every
em
plo
yer
an
d e
mp
loyee,
an
d s
elf-e
mp
loyed
pers
on
to
en
su
re s
afe
ty in
th
e w
ork
pla
ce in
rela
tio
n t
o e
lectr
icity.
Th
ese R
eg
ula
tio
ns a
lso
im
po
se a
du
ty o
n e
mp
loyers
to
carr
y o
ut
PAT
testin
g o
n a
ll ele
ctr
ical syste
ms a
nd
eq
uip
men
t.
Th
e e
mp
loyer
mu
st
en
su
re t
hat
all
syste
ms a
re m
ain
tain
ed
so
as t
o p
reven
t d
an
ger, a
nd
th
at
an
y e
qu
ipm
en
t p
rovid
ed
to
pro
tect
pers
on
s w
ork
ing
on
or
near
ele
ctr
ical eq
uip
men
t sh
all
be s
uitab
le a
nd
pro
perly m
ain
tain
ed
.
10
The D
efe
ctive P
rem
ises A
ct
19
72
Th
is A
ct
imp
oses a
du
ty o
n
the lan
dlo
rd t
o p
reven
t in
jury
to p
ers
on
s o
n t
he p
rem
ises b
y
en
su
rin
g t
he p
rem
ises a
re p
rop
erly
main
tain
ed
.
If t
he t
en
an
cy p
laces a
n o
blig
atio
n o
n t
he lan
dlo
rd t
o
main
tain
an
d r
ep
air t
he p
rem
ises t
he lan
dlo
rd o
wes a
gen
era
l
du
ty o
f care
to
an
yb
od
y w
ho
mig
ht
be a
t risk f
rom
pers
on
al
inju
ry o
r d
am
ag
e t
o t
heir p
rop
ert
y c
au
sed
by a
ny d
efe
ct
in
the g
en
era
l sta
te o
r re
pair o
f th
e p
rem
ises.
Th
e lan
dlo
rd o
wes t
his
du
ty if
he/s
he k
no
ws o
f an
y d
efe
ct
that
need
s t
o b
e r
ep
aired
/rem
ed
ied
, o
r if h
e/s
he o
ug
ht
to
have k
no
wn
of
su
ch
defe
ct.
11
Co
ntr
ol o
f A
sb
esto
s R
eg
ula
tio
ns
2006 (S
I 2006/2
739)
Th
ese R
eg
ula
tio
ns p
lace a
n
ob
ligatio
n o
n t
he d
uty
ho
lder
to a
ssess w
heth
er
or
no
t an
y
asb
esto
s is p
resen
t o
n t
he
pre
mis
es.
Th
ese R
eg
ula
tio
ns w
ill g
en
era
lly n
ot
ap
ply
wh
ere
exp
osu
re o
f
em
plo
yees t
o a
sb
esto
s is g
en
era
lly lo
w.
Th
e d
uty
ho
lder
(every
pers
on
wh
o h
as,
by v
irtu
e o
f a c
on
tract
or
ten
an
cy,
an
ob
ligatio
n t
o m
ain
tain
or
rep
air a
pre
mis
es)
mu
st
carr
y o
ut
a s
uitab
le a
nd
su
ffi c
ien
t assessm
en
t to
ascert
ain
wh
eth
er
or
no
t asb
esto
s is o
n t
he p
rem
ises.
Th
e a
ssessm
en
t m
ust
be r
eco
rded
an
d r
evie
wed
if
the
du
tyh
old
er
has a
ny r
easo
n t
o s
usp
ect
that
the a
ssessm
en
t is
no
lo
ng
er
valid
.
If t
he d
uty
ho
lder
is e
mp
loyin
g p
ers
on
s t
o c
arr
y o
ut
wo
rk
at
the p
rem
ises,
a s
uitab
le a
nd
su
ffi c
ien
t assessm
en
t o
f
the r
isk t
o t
he h
ealth
of
an
y e
mp
loyee m
ust
be m
ad
e.
Th
is
assessm
en
t sh
ou
ld a
lso
be r
eco
rded
an
d r
evie
wed
as a
bo
ve.
22 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
12
Reg
ula
tory
Refo
rm (F
ire S
afe
ty)
Ord
er
2005 (S
I 2005/1
549)
Th
ese R
eg
ula
tio
ns im
po
se a
resp
on
sib
ility
on
em
plo
yers
to
cre
ate
a s
afe
wo
rkin
g e
nviro
nm
en
t
to its
em
plo
yees in
rela
tio
n t
o fi r
e
safe
ty.
Th
e r
esp
on
sib
le p
ers
on
(em
plo
yer
or
pers
on
in
co
ntr
ol o
f a
pre
mis
es) m
ust
take s
uch
gen
era
l fi re
pre
cau
tio
ns t
o e
nsu
re
the s
afe
ty o
f h
is/h
er
em
plo
yees a
nd
oth
er
occu
pan
ts o
f th
e
pre
mis
es.
Th
e r
esp
on
sib
le p
ers
on
mu
st
make a
su
itab
le a
nd
su
ffi c
ien
t
assessm
en
t o
f an
y r
isks t
o h
is/h
er
em
plo
yees/o
ccu
pan
ts
wh
o m
igh
t b
e e
xp
osed
to
an
y p
ote
ntial fi re
ris
ks.
Th
e r
esp
on
sib
le p
ers
on
mu
st
reco
rd t
he r
isk a
ssessm
en
t
if h
e/s
he e
mp
loys fi v
e o
r m
ore
peo
ple
, th
ere
is a
lic
en
ce in
forc
e in
rela
tio
n t
o t
he p
rem
ises,
or
there
is a
n a
ltera
tio
n
no
tice r
eq
uirin
g t
he a
ssessm
en
t to
be c
arr
ied
ou
t.
Th
e r
ele
van
t p
ers
on
mu
st
en
su
re t
hat
the p
rem
ises a
re
eq
uip
ped
with
fi r
e fi g
htin
g e
qu
ipm
en
t an
d fi r
e d
ete
cto
rs a
nd
ala
rms,
that
there
are
ad
eq
uate
fi r
e e
scap
es a
nd
he/s
he m
ust
no
min
ate
a c
om
pete
nt
pers
on
to
im
ple
men
t safe
ty m
easu
res.
13
Pre
ssure
Syste
ms a
nd
Safe
ty
Reg
ula
tio
ns 2
000 (P
SS
R)
(SI 2000/1
28)
Th
ese R
eg
ula
tio
ns im
po
se a
du
ty o
f care
on
an
y p
ers
on
wh
o
desig
ns,
man
ufa
ctu
res,
imp
ort
s o
r
su
pp
lies a
ny p
ressu
re s
yste
m o
r
an
y a
rtic
le w
hic
h is in
ten
ded
to
be
a c
om
po
nen
t p
art
of
an
y p
ressu
re
syste
m.
Th
e u
ser
sh
all
no
t o
pera
te t
he p
ressu
re s
yste
m o
r allo
w it
to
be o
pera
ted
un
less h
e/s
he h
as e
sta
blis
hed
th
e s
afe
op
era
tin
g
limits o
f th
at
syste
m.
Th
e u
ser
is a
lso
resp
on
sib
le f
or
en
su
rin
g t
hat
the p
ressu
re
syste
m is p
rop
erly e
xam
ined
an
d m
ain
tain
ed
. A
ll m
ain
ten
an
ce
ch
ecks s
ho
uld
be r
eco
rded
, an
d t
he u
ser
mu
st
keep
a r
eco
rd
of
the last
rep
ort
mad
e,
or
an
y o
ther
rep
ort
still
rele
van
t to
th
e
co
nd
itio
n o
f th
e p
ressu
re s
yste
m.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 23
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
14
Gas S
afe
ty (In
sta
llatio
n a
nd
Use)
Reg
ula
tio
ns 1
998 (S
I 1998
/24
51
)
Th
ese R
eg
ula
tio
ns im
po
se a
du
ty
on
an
em
plo
yer
or
self-e
mp
loyed
pers
on
to
take r
easo
nab
le s
tep
s t
o
en
su
re t
hat
the p
ers
on
un
dert
akin
g
wo
rk r
ele
van
t to
gas s
afe
ty is
ap
pro
ved
un
der
the H
ealth
an
d
Safe
ty E
xecu
tive (H
SE
).
Th
e r
esp
on
sib
le p
ers
on
fo
r an
y p
rem
ises m
ust
no
t u
se a
gas
ap
plia
nce,
or
perm
it a
gas a
pp
lian
ce t
o b
e u
sed
, if a
t an
y
tim
e h
e/s
he k
no
ws o
r h
as r
easo
n t
o s
usp
ect
that
it m
igh
t b
e
dan
gero
us.
If a
n e
mp
loyer
req
uires a
ny w
ork
in
rela
tio
n t
o a
gas fi t
tin
g
to b
e c
arr
ied
ou
t, h
e/s
he m
ust
en
su
re t
hat
the p
ers
on
un
dert
akin
g t
hat
wo
rk is,
or
is e
mp
loyed
by,
a m
em
ber
of
a
cla
ss o
f p
ers
on
s a
pp
roved
by t
he H
SE
.
Th
e e
mp
loyer
mu
st
en
su
re t
hat
an
y g
as a
pp
lian
ce,
insta
llatio
n p
ipe w
ork
or
fl u
e in
sta
lled
at
the p
rem
ises is
main
tain
ed
in
a s
afe
co
nd
itio
n.
A lan
dlo
rd m
ust
–
(a)
en
su
re t
hat
each
ap
plia
nce a
nd
fl u
e is c
hecked
fo
r
safe
ty w
ith
in 1
2 m
on
ths o
f in
sta
llatio
n,
an
d t
hen
reg
ula
rly
ch
ecked
at
12
mo
nth
in
terv
als
;
(b)
en
su
re t
hat
a r
eco
rd in
resp
ect
of
an
y a
pp
lian
ce o
r fl u
e s
o
ch
ecked
is m
ad
e a
nd
reta
ined
fo
r a p
erio
d o
f tw
o y
ears
fro
m t
he d
ate
of
that
ch
eck.
24 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
15
Co
nstr
uctio
n (D
esig
n a
nd
Manag
em
ent)
Reg
ula
tio
ns 2
00
7
(CD
M)
Th
ese R
eg
ula
tio
ns im
po
se a
du
ty
on
co
nstr
uctio
n m
an
ag
ers
to
man
ag
e a
nd
co
-ord
inate
pro
jects
in
a c
om
pete
nt
man
ner.
Th
e c
lien
t m
ust
no
t –
(a)
ap
po
int
or
en
gag
e a
CD
M c
o-o
rdin
ato
r, d
esig
ner,
prin
cip
al co
ntr
acto
r o
r co
ntr
acto
r u
nle
ss h
e/s
he h
as
taken
reaso
nab
le s
tep
s t
o e
nsu
re t
hat
the p
ers
on
to
be
ap
po
inte
d o
r en
gag
ed
is c
om
pete
nt;
(b)
accep
t su
ch
an
ap
po
intm
en
t o
r en
gag
em
en
t u
nle
ss h
e/
sh
e is c
om
pete
nt;
(c)
arr
an
ge f
or, o
r in
str
uct,
a w
ork
er
to c
arr
y o
ut
or
man
ag
e
desig
n o
r co
nstr
uctio
n w
ork
un
less t
he w
ork
er
is
co
mp
ete
nt,
un
der
the s
up
erv
isio
n o
f a c
om
pete
nt
pers
on
.
Every
clie
nt
sh
all
en
su
re t
hat
the a
rran
gem
en
ts m
ad
e f
or
by p
ers
on
s m
an
ag
ing
th
e p
roje
ct
(in
clu
din
g h
im/h
ers
elf) are
su
itab
le t
o e
nsu
re t
hat
the c
on
str
uctio
n w
ork
can
be c
arr
ied
ou
t w
ith
ou
t risk t
o t
he h
ealth
an
d s
afe
ty o
f an
y p
ers
on
.
Every
pla
ce o
f w
ork
sh
all
be m
ad
e a
nd
kep
t safe
fo
r an
y
pers
on
at
wo
rk t
here
.
NB
. ‘c
lien
t’ m
ean
s a
pers
on
wh
o in
th
e c
ou
rse o
r fu
rth
era
nce
of
a b
usin
ess –
(a)
seeks o
r accep
ts t
he s
erv
ices o
f an
oth
er
wh
ich
may b
e
used
in
th
e c
arr
yin
g o
ut
of
a p
roje
ct
for
him
/her;
or
(b)
carr
ies o
ut
a p
roje
ct
him
/hers
elf;
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 25
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
16
The L
ifting
Op
era
tio
ns a
nd
Liftin
g
Eq
uip
ment
Reg
ula
tio
ns 1
99
8
Th
ese R
eg
ula
tio
ns e
nsu
re t
hat
all
liftin
g e
qu
ipm
en
t an
d a
ctivitie
s a
re
op
era
ted
an
d c
arr
ied
ou
t safe
ly
with
in t
he w
ork
pla
ce.
Every
em
plo
yer
mu
st
en
su
re t
hat
liftin
g e
qu
ipm
en
t is
of
ad
eq
uate
str
en
gth
. E
very
em
plo
yer
mu
st
als
o e
nsu
re t
hat
liftin
g e
qu
ipm
en
t m
ust
be d
esig
ned
to
pre
ven
t a p
ers
on
usin
g
it b
ein
g c
rush
ed
, tr
ap
ped
or
str
uck,
or
gen
era
lly e
xp
osed
to
dan
ger.
Mach
inery
an
d a
ccesso
ries f
or
liftin
g lo
ad
s s
ho
uld
be c
learly
mark
ed
to
in
dic
ate
th
eir s
afe
wo
rkin
g lo
ad
s.
All
liftin
g o
pera
tio
ns in
vo
lvin
g liftin
g e
qu
ipm
en
t m
ust
be
pro
perly p
lan
ned
, ap
pro
priate
ly s
up
erv
ised
an
d c
arr
ied
ou
t in
a s
afe
man
ner.
LA
ND
LO
RD
AN
D T
EN
AN
T
17
The L
and
lord
and
Tenant
Act
19
88
Th
is A
ct
imp
oses s
tatu
tory
du
ties
on
lan
dlo
rds in
co
nn
ectio
n w
ith
co
ven
an
ts t
o a
ssig
n,
un
derlet,
ch
arg
e o
r p
art
with
th
e p
ossessio
n
of
the p
rem
ises w
ith
ou
t co
nsen
t.
Th
is A
ct
ap
plie
s w
here
a t
en
an
cy in
clu
des a
co
ven
an
t th
at
an
occu
pie
r can
no
t assig
n,
un
derlet
etc
. th
e p
rem
ises
with
ou
t th
e c
on
sen
t o
f th
e lan
dlo
rd (su
ch
co
nsen
t n
ot
to b
e
un
reaso
nab
ly w
ith
held
).
If a
n o
ccu
pie
r serv
es a
writt
en
ap
plic
atio
n o
n t
he lan
dlo
rd t
o
assig
n,
un
derlet
etc
. th
e lan
dlo
rd m
ust
with
in a
reaso
nab
le
tim
e e
ith
er:
–
giv
e c
on
sen
t; o
r
–
if it
is r
easo
nab
le n
ot
to g
ive c
on
sen
t, s
erv
e o
n t
he
occu
pie
r w
ritt
en
no
tice o
f h
is/h
er
decis
ion
eith
er
co
mp
lete
ly w
ith
ho
ldin
g h
is/h
er
co
nsen
t, o
r g
ivin
g h
is/h
er
co
nsen
t su
bje
ct
to c
ert
ain
co
nd
itio
ns.
26 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
18
The L
and
lord
and
Tenant
Act
19
54
Th
is A
ct
pro
vid
es s
ecu
rity
of
ten
ure
for
occu
pyin
g o
ccu
pie
rs u
nd
er
cert
ain
leases,
inclu
din
g leases f
or
occu
pyin
g p
rop
ert
y f
or
bu
sin
ess,
pro
fessio
nal o
r cert
ain
oth
er
pu
rpo
ses.
Te
rmin
ati
on
of
ten
an
cy b
y t
he
la
nd
lord
Th
e lan
dlo
rd m
ay t
erm
inate
a t
en
an
cy if
he/s
he g
ives n
otice
to t
he o
ccu
pie
r, p
rovid
ing
th
e n
otice is g
iven
no
t m
ore
th
an
12
mo
nth
s a
nd
no
t le
ss t
han
6 m
on
ths b
efo
re t
he d
ate
of
term
inatio
n o
f th
e t
en
an
cy.
Th
e L
an
dlo
rd m
ust
sta
te o
ne o
r m
ore
of
the s
tatu
tory
gro
und
s f
or
op
po
sin
g t
he t
en
an
cy in
th
e n
otice.
Oc
cu
pie
r’s r
eq
ue
st
for
a n
ew
te
na
nc
y
An
occu
pie
r can
req
uest
a n
ew
ten
an
cy w
here
th
e c
urr
en
t
ten
an
cy is f
or
a t
erm
gre
ate
r th
an
on
e y
ear. (T
his
in
clu
des a
rolli
ng
co
ntr
act
ten
an
cy t
hat
has laste
d f
or
over
a y
ear)
.
An
occu
pie
r is
no
t ab
le t
o m
ake t
his
req
uest
if t
he lan
dlo
rd
has a
lread
y g
iven
no
tice t
o t
erm
inate
th
e c
urr
en
t te
nan
cy.
If t
he lan
dlo
rd h
as f
aile
d t
o g
ive n
otice,
then
he/s
he m
ay
op
po
se t
he a
pp
licatio
n f
or
a n
ew
ten
an
cy w
ith
in t
wo
mo
nth
s
of
the o
ccu
pie
r m
akin
g t
he r
eq
uest,
sta
tin
g t
heir g
rou
nd
s f
or
op
po
sitio
n.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 27
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
19
Land
lord
and
Tenant
(Co
ven
an
ts)
Act
1995
Th
is A
ct
imp
oses n
ew
ru
les o
n
ten
an
cie
s d
ate
d o
n o
r aft
er
1 J
an
uary
19
96
, co
ncern
ing
th
e
rela
tio
nsh
ip b
etw
een
lan
dlo
rds a
nd
occu
pie
rs.
Wh
en a
ny o
ccu
pie
r assig
ns a
ten
an
cy,
th
e ‘
new
’ o
ccu
pie
r
beco
mes b
ou
nd
by a
ny o
ccu
pie
r co
ven
an
ts (su
bje
ct
to
excep
tio
ns), a
nd
beco
mes e
ntitled
to
th
e b
en
efi t
of
the
lan
dlo
rd c
oven
an
ts (su
bje
ct
to e
xcep
tio
ns).
Wh
ere
th
e lan
dlo
rd a
ssig
ns a
ten
an
cy,
th
e ‘
new
’ la
nd
lord
beco
mes b
ou
nd
by t
he lan
dlo
rd c
oven
an
ts (su
bje
ct
to
excep
tio
ns), a
nd
beco
mes e
ntitled
to
th
e b
en
efi t
of
the
occup
ier
co
ven
an
ts (su
bje
ct
to e
xcep
tio
ns).
Th
e ‘o
rig
inal’ lan
dlo
rd a
nd
/or
occu
pie
r w
ill t
hen
be r
ele
ased
fro
m t
heir o
blig
atio
ns u
nd
er
the t
en
an
cy.
If a
ny c
oven
an
t o
f th
e t
en
an
cy c
on
fers
an
y r
igh
ts in
favo
ur
or
ag
ain
st
a m
an
ag
em
en
t co
mp
an
y, t
hen
it
sh
all
be t
reate
d a
s if
it w
as a
n o
ccu
pie
r co
ven
an
t exerc
isab
le b
y t
he lan
dlo
rd;
an
d/
or
a lan
dlo
rd c
oven
an
t exerc
isab
le b
y t
he o
ccu
pie
r.
20
The R
eg
ula
tory
Refo
rm (B
usin
ess
Tenancie
s) (E
ng
land
and
Wale
s)
Ord
er
2003 (S
I 2003/3
096)
Th
ese R
eg
ula
tio
ns r
efo
rm
leg
isla
tio
n in
rela
tio
n t
o b
usin
ess
ten
an
cie
s,
su
ch
as t
he L
an
dlo
rd
an
d T
en
an
t’s A
ct
19
54
.
Th
e lan
dlo
rd is e
ntitled
to
req
uest
the f
ollo
win
g in
form
atio
n
fro
m t
he o
ccu
pie
r:
(a)
wh
eth
er
the o
ccu
pie
r o
ccu
pie
s t
he p
rem
ises f
or
bu
sin
ess;
an
d
(b)
wh
eth
er
there
are
an
y s
ub
-ten
an
cie
s a
ffectin
g t
he
ten
an
cy.
21
Fin
ancia
l S
erv
ices a
nd
Mark
ets
Act
2000 (R
eg
ula
ted
Activitie
s) O
rder
2001 (S
I 2001/5
44)
and
(am
end
ed
by)
Fin
ancia
l S
erv
ices a
nd
Mark
ets
Act
2000 (R
eg
ula
ted
Activitie
s) O
rder
(No
2) 2003 (S
I 2003/1
476)
Th
ese R
eg
ula
tio
ns a
im t
o p
rote
ct
the g
en
era
l p
ub
lic w
hen
pu
rch
asin
g
insu
ran
ce b
y e
nsu
rin
g t
hat
all
pers
on
s w
ho
un
dert
ake in
su
ran
ce
med
iatio
n a
re r
eg
iste
red
an
d m
eet
str
ict
pro
fessio
nal re
qu
irem
en
ts.
If a
ny p
ers
on
is in
vo
lved
in
ad
vis
ing
, arr
an
gin
g,
ad
min
iste
rin
g
or
perf
orm
ing
in
su
ran
ce c
on
tracts
on
beh
alf o
f th
e lan
dlo
rd
(or
any o
ther
third
part
y), t
hey a
re c
on
du
ctin
g in
su
ran
ce
med
iatio
n a
ctivitie
s,
wh
ich
are
reg
ula
ted
activitie
s u
nd
er
these R
eg
ula
tio
ns.
No
on
e c
an
carr
y o
ut
a r
eg
ula
ted
activity u
nle
ss a
uth
orised
by t
he F
inan
cia
l S
erv
ices A
uth
ority
.
28 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
22
The C
RC
Energ
y E
ffi c
iency
Schem
e –
(C
RC
Energ
y E
ffi c
ien
cy
Ord
er
2010 –
SI 2010/7
68)
Th
e C
RC
En
erg
y E
ffi c
ien
cy
Sch
em
e is a
UK
man
dato
ry c
ap
an
d t
rad
e s
ch
em
e d
esig
ned
to
cu
t C
O2 e
mis
sio
ns a
nd
in
cre
ase
en
erg
y e
ffi c
ien
cy.
It
aff
ects
larg
e
co
mm
erc
ial an
d p
ub
lic s
ecto
r
org
an
isatio
ns in
clu
din
g lo
cal
au
tho
rities,
cen
tral g
overn
men
t
dep
art
men
ts,
ho
tel ch
ain
s,
ow
ners
of
larg
e o
ffi c
e a
nd
in
du
str
ial
pre
mis
es,
sh
op
pin
g c
en
tres,
etc
.
An
y o
rgan
isatio
n t
hat
meets
th
e q
ualifi
catio
n c
rite
ria
mu
st
part
icip
ate
in
th
is s
ch
em
e.
Part
icip
an
ts m
ust
rep
ort
em
issio
ns a
nd
pu
rch
ase ‘
allo
wan
ces’
to c
over
tho
se
em
issio
ns.
On
e ‘
allo
wan
ce’
mu
st
be p
aid
per
ton
ne o
f C
O2
em
issio
ns e
mitte
d.
Bo
th p
rop
ert
y m
an
ag
ers
an
d lan
dlo
rds s
ho
uld
be a
ware
th
at
the s
ch
em
e is a
imed
at
em
issio
ns o
f o
rgan
isatio
ns,
an
d n
ot
ind
ivid
ual p
rop
ert
ies.
An
org
an
isatio
n is v
iew
ed
wid
ely
– a
gro
up
of
co
mp
an
ies is c
on
sid
ere
d t
o b
e o
ne o
rgan
isatio
n.
Th
e p
ers
on
resp
on
sib
le f
or
payin
g t
he ‘
allo
wan
ces’
will
vary
dep
en
din
g o
n t
he c
ircu
msta
nces.
Gen
era
lly s
peakin
g,
the p
ers
on
resp
on
sib
le w
ill b
e t
he p
ers
on
wh
o h
as a
direct
ag
reem
en
t w
ith
th
e e
nerg
y s
up
plie
r an
d w
ho
receiv
es t
he
ben
efi t
of
the e
nerg
y s
up
plie
d.
Th
e b
ill p
ayer
will
no
rmally
eith
er
be t
he lan
dlo
rd o
r o
ccu
pie
r d
ep
en
din
g o
n n
otice o
f
co
ntr
act.
It m
ay b
e t
he c
ase t
hat
an
occu
pie
r o
nly
occu
pie
s p
art
of
a
pre
mis
es a
nd
th
at
the lan
dlo
rd (su
pp
ort
ed
by t
he p
rop
ert
y
man
ag
er)
is r
esp
on
sib
le f
or
payin
g t
he b
ills f
or
the c
om
mo
n
part
s o
f an
y b
uild
ing
. C
are
ful co
nsid
era
tio
n s
ho
uld
be g
iven
to w
ho
is r
esp
on
sib
le f
or
payin
g t
he ‘
allo
wan
ces’
an
d h
ow
these p
aym
en
ts s
ho
uld
be m
an
ag
ed
.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 29
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
23
Energ
y P
erf
orm
ance o
f B
uild
ing
s
(Cert
ifi c
ate
s a
nd
Insp
ectio
ns)
(Eng
land
and
Wale
s) R
eg
ula
tio
ns
2007
Th
ese R
eg
ula
tio
ns im
po
se a
du
ty o
n t
he lan
dlo
rd t
o p
resen
t
a p
rosp
ective o
ccu
pie
r (o
r
pro
sp
ective b
uyer)
with
an
En
erg
y
Perf
orm
an
ce C
ert
ifi c
ate
wh
en
ren
tin
g (o
r selli
ng
) a p
rop
ert
y.
En
erg
y P
erf
orm
an
ce
Ce
rtifi
ca
tes
Th
e r
ele
van
t p
ers
on
mu
st
make a
vaila
ble
fre
e o
f ch
arg
e a
valid
en
erg
y p
erf
orm
an
ce c
ert
ifi c
ate
to
an
y p
rosp
ective b
uyer
or
occu
pie
r at
the e
arlie
st
op
po
rtu
nity.
Th
e e
nerg
y p
erf
orm
an
ce c
ert
ifi c
ate
mu
st
be a
cco
mp
an
ied
by
a r
eco
mm
en
datio
n r
ep
ort
.
A r
eco
mm
en
datio
n r
ep
ort
is a
rep
ort
co
nta
inin
g
reco
mm
en
datio
ns f
or
the im
pro
vem
en
t o
f th
e e
nerg
y
perf
orm
an
ce o
f th
e b
uild
ing
, an
d is issu
ed
by t
he e
nerg
y
assesso
r w
ho
issu
ed
th
e e
nerg
y p
erf
orm
an
ce c
ert
ifi c
ate
.
Insp
ec
tio
ns o
f a
ir-c
on
dit
ion
ing
syste
ms
It is t
he r
ele
van
t p
ers
on
’s d
uty
to
en
su
re t
hat
the
air-c
on
ditio
nin
g s
yste
m is in
sp
ecte
d b
y a
n e
nerg
y a
ssesso
r
at
reg
ula
r in
terv
als
at
least
every
fi v
e y
ears
.
Th
e r
ele
van
t p
ers
on
mu
st
keep
th
e m
ost
recen
t in
sp
ectio
n
rep
ort
mad
e b
y a
n e
nerg
y a
ssesso
r.
Th
e ‘
rele
van
t p
ers
on
’ is
eith
er
the s
elle
r, lan
dlo
rd o
r (fo
r th
e
pu
rpo
ses o
f air-c
on
ditio
nin
g s
yste
ms) p
ers
on
in
co
ntr
ol o
f th
e
rele
van
t p
art
of
the p
rem
ises.
30 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
24
Private
Security
Ind
ustr
y A
ct
20
01
Th
is A
ct
esta
blis
hed
th
e S
ecu
rity
Ind
ustr
y A
uth
ority
, w
hic
h r
eg
ula
tes,
revie
ws a
nd
mo
nito
rs t
he p
rivate
secu
rity
in
du
str
y. P
art
icip
an
ts o
f
this
in
du
str
y m
ust
have a
lic
en
ce t
o
carr
y o
ut
cert
ain
sp
ecifi e
d s
ecu
rity
activitie
s.
Th
e c
urr
en
t d
esig
nate
d s
ecto
rs o
r activitie
s t
hat
mu
st
be
co
vere
d b
y a
lic
en
ce a
re a
s f
ollo
ws:
•
secu
rity
gu
ard
ing
– u
nd
er
co
ntr
act
•
do
or
su
perv
iso
rs –
un
der
co
ntr
act
an
d in
-ho
use
•
veh
icle
im
mo
bili
sin
g –
un
der
co
ntr
act
an
d in
-ho
use
•
private
in
vestig
atio
n –
un
der
co
ntr
act
•
secu
rity
co
nsu
ltan
ts –
un
der
co
ntr
act
•
keyh
old
ers
– u
nd
er
co
ntr
act.
Th
e f
ollo
win
g c
ate
go
ries o
f p
eo
ple
will
need
lic
en
ces:
•
secu
rity
co
ntr
acto
rs,
directo
rs o
f secu
rity
co
mp
an
ies a
nd
part
ners
in
secu
rity
fi r
ms
•
em
plo
yees o
f secu
rity
co
ntr
acto
rs,
secu
rity
co
mp
an
ies
an
d s
ecu
rity
fi r
ms
•
ag
en
cy w
ork
ers
perf
orm
ing
th
e d
esig
nate
d d
uties
•
pers
on
s w
ho
man
ag
e o
r su
perv
ise s
ecu
rity
op
era
tives
su
pp
lied
un
der
co
ntr
act
by a
secu
rity
co
ntr
acto
r (b
ut
no
t
in-h
ou
se s
up
erv
iso
rs o
f co
ntr
acto
rs)
•
ag
en
cy-s
up
plie
d m
an
ag
ers
or
su
perv
iso
rs o
f secu
rity
op
era
tives s
up
plie
d u
nd
er
co
ntr
act
•
directo
rs o
f secu
rity
co
mp
an
ies a
nd
part
ners
in
secu
rity
fi rm
s w
ho
do
no
t th
em
selv
es c
arr
y o
ut
the d
esig
nate
d
activitie
s
•
in-h
ou
se d
oo
r su
perv
iso
rs a
nd
veh
icle
im
mo
bili
sers
an
d
their e
mp
loyers
, m
an
ag
ers
an
d s
up
erv
iso
rs
•
oth
ers
wh
o im
mo
bili
se v
eh
icle
s o
n p
rivate
lan
d a
gain
st
a
rele
ase f
ee.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 31
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
25
Tra
nsfe
r o
f U
nd
ert
akin
gs
(Pro
tectio
n o
f E
mp
loym
ent)
Reg
ula
tio
ns 2
006 (S
I 2006
/24
6)
(TU
PE
)
Th
ese R
eg
ula
tio
ns w
ere
pu
t in
pla
ce t
o p
rote
ct
em
plo
yees d
urin
g
the t
ran
sfe
r o
f an
y b
usin
ess,
inclu
din
g a
serv
ice p
rovis
ion
ch
an
ge.
Th
ese R
eg
ula
tio
ns a
pp
ly t
o a
serv
ice p
rovis
ion
ch
an
ge.
Th
is
inclu
des a
pro
pert
y m
an
ag
er
pro
vid
ing
serv
ices o
n b
eh
alf o
f
the lan
dlo
rd.
In s
um
mary
th
ese R
eg
ula
tio
ns m
igh
t p
ote
ntially
ap
ply
on
ap
po
intm
en
t o
f th
e p
rop
ert
y m
an
ag
er
or
term
inatio
n
of
an
ap
po
intm
en
t if t
here
are
an
y e
mp
loyees s
pen
din
g
a s
ign
ifi c
an
t am
ou
nt
of
tim
e d
ed
icate
d t
o t
he a
cco
un
t
or
pro
pert
y. If
there
is s
uch
a p
ers
on
th
en
th
ey m
igh
t b
e
tran
sfe
rred
to
or
fro
m t
he p
rop
ert
y m
an
ag
er.
Un
less a
n e
mp
loyee o
bje
cts
to
bein
g e
mp
loyed
by t
he n
ew
em
plo
yer, t
he c
on
tract
of
em
plo
ym
en
t o
f th
at
pers
on
will
no
t
be t
erm
inate
d.
An
y e
mp
loym
en
t co
ntr
act
wo
uld
tra
nsfe
r to
th
e n
ew
em
plo
yer, a
s t
ho
ug
h it
was o
rig
inally
mad
e b
etw
een
th
e
em
plo
yee a
nd
th
e n
ew
em
plo
yer.
Up
on
th
e t
ran
sfe
r, a
ll th
e r
igh
ts o
f th
e o
ld e
mp
loyer
in r
ela
tio
n
to t
he e
mp
loym
en
t co
ntr
act
will
tra
nsfe
r to
th
e n
ew
em
plo
yer.
Th
e n
ew
em
plo
yer
will
als
o b
e r
esp
on
sib
le f
or
an
y A
ct
or
om
issio
n t
hat
the o
ld e
mp
loyer
co
mm
itte
d b
efo
re t
he t
ran
sfe
r
(bu
t it is c
om
mo
n t
o r
eallo
cate
lia
bili
ty in
co
ntr
act)
.
An
y c
on
tract
of
em
plo
ym
en
t th
at
is t
ran
sfe
rred
can
no
t b
e
varied
un
less t
he s
ole
reaso
n f
or
the v
ariatio
n is:
(i)
the t
ran
sfe
r itself,
or
(ii)
a r
easo
n c
on
necte
d w
ith
th
e t
ran
sfe
r th
at
is n
ot
eco
no
mic
, te
ch
nic
al o
r an
org
an
isatio
nal re
aso
n e
nta
ilin
g
ch
an
ges in
th
e w
ork
forc
e.
32 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
26
Data
Pro
tectio
n A
ct
1998
Th
is A
ct
reg
ula
tes t
he p
rocessin
g
of
info
rmatio
n r
ela
tin
g t
o
ind
ivid
uals
, in
clu
din
g t
he o
bta
inin
g,
ho
ldin
g,
use o
r d
isclo
su
re o
f su
ch
info
rmatio
n (d
ata
co
ntr
olle
rs).
Pers
on
al d
ata
mu
st
no
t b
e p
rocessed
by a
data
co
ntr
olle
r
un
less a
n e
ntr
y is m
ad
e o
n t
he r
eg
iste
r, w
hic
h is m
ain
tain
ed
by t
he in
form
atio
n c
om
mis
sio
ner.
Th
e c
om
mis
sio
ner
is a
pp
oin
ted
to
en
su
re t
hat
data
co
ntr
olle
rs c
om
ply
with
th
e p
rovis
ion
s o
f th
is A
ct.
An
y d
ata
co
ntr
olle
r w
ho
wis
hes t
o b
e a
dd
ed
to
th
e r
eg
iste
r
sh
all
giv
e a
no
tifi catio
n t
o t
he in
form
atio
n c
om
mis
sio
ner. A
no
tifi catio
n m
ust
sp
ecify a
gen
era
l d
escrip
tio
n o
f m
easu
res
he/s
he w
ill t
ake t
o e
nsu
re c
om
plia
nce w
ith
data
pro
tectio
n
prin
cip
les.
Th
e n
otifi catio
n m
ust
be a
cco
mp
an
ied
by a
fee.
Su
bje
ct
to c
ert
ain
excep
tio
ns,
the d
ata
co
ntr
olle
r m
ust,
with
in
21
days o
f re
ceiv
ing
a w
ritt
en
req
uest
fro
m a
ny d
ata
su
bje
ct,
make t
he r
ele
van
t p
art
icu
lars
availa
ble
to
th
at
pers
on
in
writing
fre
e o
f ch
arg
e.
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 33
Nu
mb
er
Na
me
of
leg
isla
tio
nB
rie
f su
mm
ary
of
leg
isla
tio
nK
ey p
oin
ts/k
ey s
ec
tio
ns/s
ch
ed
ule
s
27
Dis
ab
ility
Dis
crim
inatio
n A
ct
19
95
and
Dis
ab
ility
Dis
crim
inatio
n A
ct
20
05
Th
ese A
cts
im
po
se a
du
ty o
n
pers
on
s o
ccu
pyin
g a
pre
mis
es n
ot
to d
iscrim
inate
ag
ain
st
dis
ab
led
pers
on
s.
It is u
nla
wfu
l fo
r a p
ers
on
man
ag
ing
an
y p
rem
ises t
o
dis
crim
inate
ag
ain
st
a d
isab
led
pers
on
occu
pyin
g t
ho
se
pre
mis
es:
(a)
in t
he w
ay h
e/s
he p
erm
its t
he d
isab
led
pers
on
to
make
use o
f an
y b
en
efi ts
or
facili
ties;
(b)
by r
efu
sin
g o
r d
elib
era
tely
om
ittin
g t
o p
erm
it t
he d
isab
led
pers
on
to
make u
se o
f an
y b
en
efi ts
or
facili
ties;
or
(c)
by e
vic
tin
g t
he d
isab
led
pers
on
, o
r su
bje
ctin
g h
im/h
er
to
an
y o
ther
detr
imen
t.
It is a
lso
un
law
ful fo
r a p
ers
on
with
po
wer
to d
isp
ose o
f an
y
pre
mis
es t
o d
iscrim
inate
ag
ain
st
a d
isab
led
pers
on
:–
(a)
in t
he t
erm
s o
n w
hic
h h
e/s
he o
ffers
to
dis
po
se o
f th
ose
pre
mis
es t
o t
he d
isab
led
pers
on
;
(b)
by r
efu
sin
g t
o d
isp
ose o
f th
ose p
rem
ises t
o t
he d
isab
led
pers
on
; o
r
(c)
in h
is/h
er
treatm
en
t o
f th
e d
isab
led
pers
on
in
rela
tio
n t
o
an
y lis
t o
f p
ers
on
s in
need
of
pre
mis
es o
f th
at
descrip
tio
n.
28
The E
qualit
y A
ct
2010
Th
is A
ct
req
uires e
mp
loyers
(an
d
oth
ers
) to
have r
eg
ard
gen
era
lly
to r
ed
ucin
g s
ocio
-eco
no
mic
ineq
ualit
ies,
dis
crim
inatio
n a
nd
vic
tim
isatio
n a
nd
to
in
cre
ase
eq
ualit
y o
f o
pp
ort
un
ity.
Th
e A
ct
itself c
on
tain
s v
ery
deta
iled
in
form
atio
n a
nd
sp
ecifi c
ad
vic
e s
ho
uld
be s
ou
gh
t to
en
su
re
co
mp
lian
ce w
ith
it.
Th
e A
ct
co
vers
eq
ualit
y issu
es o
ver
man
y a
reas –
no
t ju
st
the
em
plo
ym
en
t o
f w
ork
ers
, it c
overs
th
e s
up
ply
of
serv
ices.
34 | COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES
Property managers should ensure that they have a
comprehensive written contract with their landlords.
The written contract should set out clearly the scope
of services of the property manager and the amount
that the property manager gets paid.
All too often, property management arrangements
are too informal, either with no written contract at all
or a very brief written arrangement. Entering into an
informal property management contract of this nature
can present signifi cant risks to both the client and the
property manager:
(a) It will not be clear what the scope of the
property manager’s responsibilities are. Given
that the property manager has a duty of care
to the landlord, if a contract is unclear a court
may fi nd that a property manager did have
responsibility for an aspect of managing
the property the property manager had not
contemplated. This could pose considerable
risk and cost to the property manager.
(b) The property manager will often be handling
signifi cant sums of money and therefore it is
important that there is a clear understanding
between landlord and property manager how
those payments are calculated and sums
managed.
(c) In an informal contract it may not be clear how
much a property manager will be paid. This
means that a property manager risks being paid
less than expected.
(d) The length of the contract will be unclear,
which could mean the landlord, or the property
manager, could terminate on short notice.
This means that simply referring to managing a
property ‘in accordance with the principles of
good estate management’ with no further detail
is no longer an adequate approach.
A well drafted property management contract will
usually include the following:
(a) the identity of the property or properties – this
may seem like an obvious point but all too often
the property is identifi ed loosely, which will only
lead to confusion and risk.
(b) commencement and duration – the contract
should clearly set out when it starts its duration,
whether the contract is fi xed term or rolling,
whether either party can terminate on notice at
any time, and procedures in the event that the
landlord sells his/her interest in the property.
(c) scope of services – the contract would typically
include general obligations on the property
manager to provide the services. There should
be a detailed services schedule setting out
exactly the scope of the property manager’s
responsibilities. In particular handover transition
at the beginning and end of the property
manager’s appointment should be identifi ed.
(d) obligations of the landlord – it is important
that the property manager is provided with
all information that the landlord has available
relating to the property; therefore the contract
will need to make this responsibility of the
landlord clear.
(e) payment – the contract should make it clear
how much the property manager will be paid
and when and how this will be reconciled
against the service charge; for example, what is
the position if the building is empty or there are
voids and what impact does that have on the
property manager’s fee? If the contract is for a
signifi cant duration what are the mechanics to
alter the fee? To what extent can the property
manager deduct his/her fee from the service
charge account?
(f) liability – there should be basic clauses
protecting the property manager, limiting and
controlling his/her liability. Ideally there should
be a ‘force majeure’ clause, which makes it
clear that the property manager has no liability
if he/she is unable to supply the services due to
an event outside his/her reasonable control. See
8.4 for more detail on contract liability.
Appendix 2 Property management contract
COMMERCIAL PROPERTY MANAGEMENT IN ENGLAND AND WALES | 35
(g) TUPE – given the signifi cant likelihood that an
employee of the property manager spends a
signifi cant amount of their time on a particular
account or a particular property, it is important
to consciously consider the risk of TUPE. If
there is any risk of TUPE applying, whether
at the time of the contract or in the future,
then TUPE clauses should be included. For
more information see at Appendix 2 the RICS
information paper, TUPE: Information for
property managers (2009).
(h) termination – the contract needs to make it
clear that the contract can be terminable by
either party if that party is in material breach
and to also allow the party to terminate if
the other party becomes insolvent. Detailed
insolvency clauses are often required to ensure
that the property manager is not in a position of
managing a property on behalf of the landlord
who has no money but who is not yet formally
insolvent.
(i) other parties – to what extent:
i. can either party assign the contract?
Assignment means transferring the benefi t
of the contract to another person (it is not
possible to transfer the ‘burden’ without
the agreement of all three parties). If the
contract is silent then usually the benefi t
will be freely assignable. The ideal position
is that the landlord cannot assign but the
property manager can assign. Usually
a landlord will object to that and so it is
normally agreed neither party can assign
without the other party’s consent (possibly
allowing the parties to freely assign within
the group).
ii. can the property manager subcontract its
responsibilities?
If the contract is silent on subcontracting
then normally the property manager can
freely subcontract. If the property manager
does subcontract, the property manager
remains responsible to the landlord for the
performance of the subcontractor.
iii. should any third parties (for example
members of the property manager’s group
or the landlord’s group) benefi t from the
contract?
It is normal to expressly state no third parties
have the benefi t of the contract.
(j) general clauses, for example:
i. confi dentiality; and
ii. law and jurisdiction (usually English law and
English courts).
It is an important part of a property manager’s risk
management to ensure that the property management
contract addresses and manages their level of
liability. This is important as normally the property
manager’s fee (and margin) is disproportionate to the
value of the building being managed. In other words
the potential risk is very different to the reward. The
RICS information paper, Limiting liability in property
management contracts (2009) goes into this in more
detail, but in summary:
• Make sure the contract is in writing and the
scope of the services is clear.
• Include a ‘force majeure’ clause – the
property manager will be liable for events
outside of his control (e.g. a fl ood) unless a
force majeure clause is included.
• Cap liability – it is normal for a property
management contract to include a cap on
liability. The amount will depend on the
building, the fee and key risks.
• Exclude indirect losses. These are losses
that are not, in broad terms, reasonably
foreseeable and are unlikely to be insured.
• Avoid giving indemnities – they extend
liabilities.
It is important that a property manager holds
appropriate professional indemnity insurance.
However, do not confuse holding insurance with
capping liability – for example, a property manager
agreeing with a landlord to hold £2 million of
professional indemnity insurance does not cap the
property manager’s liability to £2 million, it merely
means that the manager has agreed to have insurance
covering the fi rst £2 million of any losses.
Commercial property managementin England and Wales
RICS Practice Standards, UK
2nd edition, guidance note
Commercial property managementin England and Wales2nd edition, guidance note
This guidance note details best practice in the management ofcommercial property, with particular emphasis on how the person(s) incontrol of a building should manage, communicate and control incomeand expenditure, as well as minimise the various associated risks.
The guidance applies to all members who undertake propertymanagement for the landlord as managing agent, although the generalprinciples apply to any property manager.
The guidance note is focused primarily on the management ofcommercial properties in England and Wales, however, special mentionis made of mixed use developments. A summary of the main areas ofEnglish statute law relevant to the management of a commercialproperty is also provided.
rics.org/standards rics.org/standards
GN 89/2011