Conditions of Management for Commercial Properties
Our charges for Collection and Management are as follows:
| Monthly Tenancies: | Rents up to £9,999 p.a. 12% on gross rental inclusive of VAT, 10% plus VAT. |
| Rents over £10,000 p.a. 9% on gross rental inclusive of VAT, 7.5% plus VAT. | |
| Quarterly Tenancies: | Rents up to £9,999 p.a. 9% on gross rental inclusive of VAT, 7.5% plus VAT. |
| Rents over £10,000 p.a. 6% on gross rental inclusive of VAT, 5% plus VAT. | |
| Garages: | 12% p.a. on gross rental inclusive of VAT. |
The above charges cover the following services:
- Collection of rent and/or any items to be collected.
- General supervision of tenancies.
- Payment of outgoings i.e. water rates, insurance, repairs etc.
- Employ builders to carry out repairs for which the Client is responsible up to a cost of £100.00 inclusive of VAT. We only give instructions without referring to owner for such items as we consider to be essential and/or required under the Health Act Regulations.
- Keeping of accounts and submission of a statement quarterly.
Payment of all outgoings is, of course, subject to the owner’s account being in credit.
Unless otherwise agreed, it will be a condition of our management that the insurance of the property and the contents, if appropriate, is through St Giles Insurance and Finance Services Limited, our nominated insurance brokers, including full property owner’s liability to include Public Occupiers Liability.
EXTRA FEES PAYABLE
In managing commercial property, other services are likely to arise for which fees are charged as follows:
SERVICE FEES
| SERVICE | FEES |
|---|---|
| 1. Rent Reviews | 12% of one year’s reviewed rent inclusive of VAT. Minimum fee £1,800.00 inclusive of VAT. |
| 2. Lease Renewals | 12% of one year’s rent inclusive of VAT. Minimum fee £2,400.00 inclusive of VAT. |
| 3. Assignment of Leases where fees not payable by either assignor or assignee | Quantum meruit – minimum fee £1,200.00 inclusive of VAT. |
| 4. Surrender of Leases where fees not payable by lessee. | Quantum meruit – Minimum fee £1,200.00 inclusive of VAT. |
| 5. Dilapidations. | 12% of cost of works inclusive of VAT. |
| 6. Attendance at Courts. | £360.00 per hour inclusive of VAT. |
| 7. Supervision of building works over £100.00 inclusive of VAT. | 15% of cost of works inclusive of VAT. |
| 8. Termination of management where three months’ notice not given. | £900.00 per tenancy inclusive of VAT. |
REPAIRS
We need to be able to carry out day to day repairs to your property for which you are liable without reference to you. Unless you advise us to the contrary we will carry out repairs costing up to £500.00 inclusive of VAT without reference. Where we consider it appropriate, competitive estimates will be obtained. Where we arrange repairs on your behalf we will charge fees of 15% of the cost of the works inclusive of VAT.
OVERSEAS CLIENTS
Under the provision of the Finance Acts, with effect from the 6th April 1996, unless and until specific action is taken by landlords and agreed by the Financial Intermediaries and Claims Office of the Inland Revenue, we will be obliged to submit a return and pay tax at currently at 20% on the net assessable rental income to the Inland Revenue within 30 days of the end of each three month quarter. The quarter dates are the last day of June, September, December and March, which coincide approximately with our quarterly dates. This will happen unless we receive notification from the Inland Revenue that we do not have to make a tax deduction from your income. In order to obtain this clearance, you have to take the following action.
In order to obtain the Inland Revenue’s agreement that you can receive income from property without deduction of tax, you must complete form NRL1 and send it to the Inland Revenue Financial Intermediaries and Claims Office at Bootle, whose address is shown on the back page of the form. If you wish to prevent us having to deduct the tax from the income you should complete and send this form as soon as possible. We shall be able to provide you with form NRL1 upon request.
If you wish we can supply you with a photocopy of Inland Revenue leaflet number 1R140 relating to the obligation of non-resident Landlords, their agents and tenants, which may help you to understand the situation.
If you intend to apply to receive rental income with no tax deducted, it would be appreciated if you could let us have a copy of your application form for our records and we can also then chase up the appropriate department, if they have not responded by the time we deal with the first quarter’s rents.
TERMINATION OF MANAGEMENT
One quarter’s notice of termination on either side is required except in the case where we sell the property on behalf of the owner. Where the property is sold to the tenant originally introduced by this firm, the vendor will be liable for our commission of 1.8% of the sale price inclusive of VAT.
INSURANCE
Unless otherwise agreed, it will be a condition of our management that the insurance of the property and the contents, if appropriate, is through St. Giles Finance & Insurance Services Ltd., St Giles are our nominated insurance brokers, including full property owner’s liability to include Public Occupiers Liability. These brokers pay us a fee for reviewing the terms of the insurance on an annual basis, checking the renewal papers, organising and collecting the premiums on their behalf and accounting to them and overseeing any claims with the loss adjustors. The fee that we are paid for the work we do on insurance is retained by us in order to keep our costs down. However, under FSA rules and the RICS Designated Professional Body Scheme we are required to advise you on an annual basis of any money earned by general insurance mediation activity in relation to your property which we will of course do.
INTEREST
In order to keep our charges down to a minimum we keep a substantial amount of Clients money on deposit without obligation to pay any interest earned to clients. Under the RICS regulations, if Clients money is placed on deposit, strictly speaking, any interest earned belongs to the Clients unless an individual agrees to waive the right to interest. The money is on immediate call if required.
In the past all our Clients have agreed to waive the right to interest on any clients money on deposit with a view to keeping their costs down and we trust that you will continue to agree to this. If you do not, this will involve us in additional administration work and as a result we will have to increase our commission on collection by 6% over and above the figures mentioned above inclusive of VAT. We shall be obliged if you will kindly confirm your instructions by deleting one of the following alternatives.
* I HEREBY agree to waive any right to interest on monies held by John G Dean Ltd on my behalf.
* I HEREBY confirm that I am not prepared to waive my rights to interest and understand that the commission on collection will in these circumstances be at the rate of 6% above normal inclusive of VAT.
* (Please delete one of the above alternatives.)
BANKING
All rents and other monies collected are banked at Nat West Bank PLC, 128 Balham High Road, London, SW12 9AE in the name of John G Dean Ltd Clients Account.
MONEY LAUNDERING REGULATIONS 2007 AS AMENDED
Under the above Legislation, we are required to obtain proof of identity without which we are regrettably not permitted to commence any work for you.
In the case of an individual or individuals who own the property, please provide us with either the original or a certified photocopy of each person’s passport and utility bill or bank statement addressed to each person’s home address.
If you do not have a passport, please supply a copy of driving licence or similar document which bears your name and signature. Copies must be certified by either a solicitor, Banks officer or another professional person.
In the case of a company, please supply a copy of certified Certificate of Incorporation.
I understand that all monies held on my behalf by John G Dean Ltd is banked in “John G Dean Ltd, Clients Account” at Nat West Bank PLC, 128 Balham High Road, London, SW12 9AE
COMPLAINTS HANDLING PROCEDURE
As required by the RICS we have a formal complaints handling procedure, details of which will be provided upon request.
PROVISION OF SERVICE REGULATIONS 2009
We comply with the above regulation by displaying the required details of our Professional Indemnity Insurance in each of our offices.