RICS APC Commercial Property Management

Question 1

Under the Landlord and Tenant Act 1954, what statutory protection is afforded to business tenants at the end of their lease?

Accepted Answer

Security of tenure — the right to renew the lease on similar terms

Answer

The right to purchase the property at a discounted market value

Answer

Immunity from rent increases during the lease term

Answer

The right to sublet without requiring landlord consent

Question 2

What is an 'upward-only rent review' clause in a commercial lease?

Accepted Answer

A clause under which rent at review can only stay the same or increase, never fall below the passing rent

Answer

A clause that links rent to annual RPI inflation increases

Answer

A clause requiring the landlord to justify any rent increase above 5%

Answer

A clause allowing the tenant to challenge any increase exceeding open market value

Question 3

What does a 'full repairing and insuring' (FRI) lease require of the tenant?

Accepted Answer

The tenant bears the full cost of all repairs and reimburses the landlord for building insurance premiums

Answer

The tenant repairs internal fixtures only while the landlord insures the building

Answer

The tenant repairs the interior and the landlord repairs the exterior and insures

Answer

The tenant and landlord share repair costs equally and insure their respective interests

Question 4

What does 'tenant covenant strength' refer to in commercial property management?

Accepted Answer

The tenant's financial standing and ability to meet its lease obligations

Answer

The number of legal covenants contained within the lease agreement

Answer

The physical condition of tenant improvements at lease commencement

Answer

The enforceability of the lease against third-party assignees

Question 5

What is a 'terminal schedule of dilapidations' in commercial property?

Accepted Answer

A document served by the landlord at or near lease expiry claiming remedies for the tenant's breach of repairing obligations

Answer

A landlord's claim served mid-lease for ongoing repair breaches

Answer

A statutory notice served by the local authority for dangerous structures

Answer

An insurance schedule covering the cost of reinstating the property after a casualty

Question 6

What does 'WAULT' measure in commercial property portfolio management?

Accepted Answer

Weighted Average Unexpired Lease Term — the average remaining lease length across a portfolio weighted by rental income

Answer

Written Appraisal of Underlying Lease Terms — a RICS valuation methodology

Answer

Worst-case Assessment of Underperforming Lettings and Tenancies

Answer

Working Asset Utilisation and Lease Tracker — a property management software metric

Question 7

What is a 'sinking fund' in the context of commercial property service charges?

Accepted Answer

A fund accumulated over time from tenant contributions to meet anticipated future major capital expenditure

Answer

A reserve held by the managing agent to cover unpaid service charge arrears

Answer

An emergency reserve for structural damage caused by extreme weather events

Answer

A statutory fund required under the Landlord and Tenant Act 1985 for all commercial properties