Also known as the ‘Purple Book’ it is a guide to best practice in commercial agency applicable to UK commercial agents from marketing (within the envelope of the 1991 Misdescriptions Act) through to money laundering. But it also offers a useful source of reference for clients and other stakeholders.

It refers only to direct property ownership for both occupation and investment, not to

forms of indirect investment.

It is particularly important that those practising in this field should be reminded

of the duties and responsibilities they owe to the clients of their services, as

many key financial decisions may have potentially serious implications.

The aim of this guidance is to ensure that clients can be assured they will receive

a standard quality service from all commercial agents, and to help to improve

standards in the sector by raising public and professional awareness. A further

objective is to encourage agents to aspire to the highest operating standards

through the training and on-going development of their staff.

Both agents and clients should make themselves aware of the key aspects of the guidance that includes chapters on;

Ethics; Duty of care, conflicts of interest, the Bribery Act 2010

Securing instructions; Information to be provided under the Estate Agency Act 1979, when clients must pay.

Disposal / marketing of property; Explanation of auctions & tenders, the Property Misdescriptions Act 1991

Acting for Seller; Information the agent is bound to supply.

Letting a property; Glossary of terms & key terms

Acquisitions; Guidance for agents searching on behalf of clients.

Ending the Instruction; Helping to tie up loose ends

Safety & Security; Data Protection Act

Agency Management; Promoting good practice.

This further supports the advice from RPS Ltd that by appointing RICS chartered Surveyors to act on your behalf is the best way in ensuring that your position is protected by a body that sets guidelines and standards that protect and enhance the  commercial property agency industry.

Here are 7 steps to help you get there……………..

1 Take professional advice. Entering into an agreement for a lease is potentially one of the largest contracts you will enter into and your commitment to meet its obligations, and payments, could run on for years. Instruct a chartered surveyor who is regulated by the RICS and will hold PI insurance.

2 Be aware of the Code for Leasing Business Premises in England & Wales. Compliance is voluntary but many large landlords will be aware of the code. It is a code for good practice.

3 Be aware of the RICS code of practice; Service Charges in Commercial Property. A voluntary code but as guidance note it has greater effect to RICS surveyors.

4 Always have a back-up property. If negotiations for your 1st choice property should stall then you need to be prepared to pull your papers and move on.

5 Be aware of the full costs applicable to the lease and your occupation; Solicitors fees, SDLT, rent deposits and service charges, insurance, utilities charges.

6 Don’t take the word of the agents. If it’s not in the lease then it’s not in the contract!

7 Finally, you only get one chance to negotiate your lease terms, so take advice early. Be clear on what’s on offer and what you’re willing to negotiate on and don’t assume anything.

Visit www.leasingbusinesspremises.co.uk for a copy of the code.

PLEASE NOTE;
A business lease is a legally binding contract and failure to comply with its terms and conditions could lead to court action and financial loss. RPS Ltd recommends that you obtain advice from an RICS regulated practice to obtain professional opinion before entering into such an agreement.

From 1 June 2004 procedures changed for excluding the security offered to business
tenancies by sections 24 to 28 of the Landlord and Tenant Act 1954. It is no longer
necessary to apply to the Court to obtain a Order authorising the agreement reached by
the landlord and tenant to exclude the security of tenure provisions. Instead, the new
procedure to follow involves compliance with the three steps as set out below. Failure
to follow this procedure could see the tenant acquiring the security of tenure provided
by the LTA 1954.
Step 1 – Notice
The landlord must serve on the proposed tenant a notice in a prescribed form
containing a “health warning”. The “health warning” explains to the proposed tenant the
effect of entering into a contracted-out tenancy, the most important point being that the
tenant will have no right to stay in the premises once the lease ends. The notice must
be served before the new tenancy is entered into or the tenant becomes contractually
bound to enter into it. However, the landlord should only serve the notice on the tenant
once the terms of the new lease have been agreed (or the lease is substantially in its final
form) so as to avoid the risk of the notice subsequently being held to be invalid. Whilst
not specifically required, it is good practice to attach a copy of the draft lease to the notice
itself.
Step 2 – Declaration
Once the notice has been served, the proposed tenant must either sign a declaration or
swear a statutory declaration.
• Notice served at least 14 days before the tenancy is granted/tenant becomes
contractually bound:- tenant signs declaration.
• Notice served less than 14 days before the tenancy is granted/tenant becomes
contractually bound:- tenant swears statutory declaration before a solicitor.
Both the declaration and the statutory declaration must be in the prescribed form. Both
declarations confirm that the tenant has received the landlord’s notice containing the
“health warning”, that the tenant has read that notice, and that the tenant accepts the
consequences of entering into a contracted-out tenancy.
Step 3 – Note in lease
The new lease must refer to:
• the service of the landlord’s notice;
• the declaration or statutory declaration made by the tenant; and
• the parties’ agreement to exclude the provisions of sections 24 to 28 of the Act.
It is good practice to store copies of the landlord’s notice and the tenant’s
declaration/statutory declaration with the lease.
More information
RPS Ltd, www.rpsltd.co
This information has been prepared by
RPS Ltd as a general
guide only and does not constitute
advice on any specific matter. RPS Ltd
recommend that you seek professional
advice before taking action. No liability
can be accepted by us for any action
taken or not taken as a result of this
information.

The Act comments on;
offering or receiving a bribe;
bribery of foreign officials; and
failure to prevent a bribe being paid (on which see below the “adequate procedures” defence),
are “quite tough rules”. The main thrust of the Guidance, however, offers reassurance to businesses that “combating bribery is about common sense, not bureaucracy”.

The key points to note are as follows:

Corporate Hospitality
The guidance makes clear that reasonable hospitality to meet, network and get to know your clients will not fall foul of the new legislation.

Adequate Procedures Defence
In relation to the offence of “failure to prevent a bribe being paid”, the procedures that need to be put in place in order to rely on the “adequate procedures” statutory defence need only be proportionate to the size and nature of your business.

Whereas major multi-nationals must exercise greater due diligence and have more detailed compliance procedures in place, verbal communication may suffice for a small company. If there is very little risk of bribery being encountered by members of your company or on its behalf, no specific bribery prevention policies will be required.

Associated Person
A company will only be held criminally liable for the acts of an “associated person” where that person actually represents or performs services for it and the bribery committed is intended to benefit that company. It is very unlikely therefore that a company will be liable for the actions of someone who simply provides services to it.

Facilitation Payments
Facilitation payments, which are payments made to induce officials to perform routine functions that they are obliged to perform in any event, remain illegal under the Act.

Prosecution
Cases may be brought only when either the Director of Public Prosecutions or the Director of the Serious Fraud Office is satisfied both that:

i. a conviction is more likely than not; and

ii. prosecution is in the public interest

Please follow the link below to obtain published guidance on how the act may effect you;

http://www.justice.gov.uk/downloads/guidance/making-reviewing-law/bribery-act-2010-guidance.pdf