Space Strategies and Legislation in Real Estate Development - Research Proposal Example

Space Strategies and Legislation in Real Estate Development Introduction Real estate development does not necessarily start with numbers nor a site but an innovative idea. Real estate has a major impact on the world economy due to the property tax revenue. This is because every person or business requires a structure for shelter, business and so on. It is an issue that is highly demanding for socially and environmentally responsible business. Real estate development addresses agricultural base, location fundamentals and linkages, CBD development, building technology and types of conveyance (Daniel, 2011; 18). Estates are maintained by agencies on private contracts known as restrictive covenants. The covenants must be enforced through civil lawsuits and not public actions like the police. Agencies are governed by state laws that establish duties, responsibilities and acceptable activities for agents in their relationship with clients, customers and the general public. Adherence to these expectations reveals a good business practice. Agency can also be viewed as a legal relationship that creates duties and liabilities to the principal. Environmentalism being a contemporary issue has facilitated the growing demand for ‘green ‘, an issue compelling real estate professionals to think of energy, waste, water, materials and land . Public health and planning legislations together with housing legislations grants to local authorities important overall control of the environment. For some fields, it encompasses a technical matter of measurement and quality while in others it is a qualitative opinion of safety, health and visual amenity. Within the breadth of environmental law, some of the provisions are concerned with the creation and maintenance of infrastructure services which permit the existence of intensively developed urban areas (John, 2000; 126-127). Others refer to patterns of rights and duties between the community as a whole, represented by the local authority and the owner and occupiers of individual properties. Infringement of these patterns of rights and duties may constitute a public nuisance and the local authority can exercise its powers under the public health Act 1961 to deal with dangerous structures and carry out works if the owner fails to make necessary actions. Agreement of Tenancy Historically, tenants were compelled to pay rent on houses or properties which were on compromised states of dilapidation. They were denied the right to inform landlords to repair or renovate the property thus weakening their bargaining power. The tenants had to do the repairs themselves. This made landlords take advantage of entering into agreements which required tenants make repairs failure to which the tenancy would be withdrawn. In order to strengthen their hand, landlords introduced a tenants covenant to rebuild, replace and renew wherever necessary in accordance with best modern practice , the whole or part of the premise (Banfield, 2005; 65-68). The coming up of Landlord and Tenant Act (LTA) 1985 thus bind the landlords to repair leased property. The defective premises act also allowed tenants to sue landlords for disrepair and premises that were unfit for human habitation. Under internal repairing leases, the main expenditure by the tenant was usually painting and decorating to the required standard at specified intervals, and the last year of the lease to the landlord will find it useful to be able to state the color of the final year, since this may help a subsequent letting. A few months before the end of the lease, the lessor’s surveyor , in accordance with the provisions for entry in the lease was required to prepare a schedule for dilapidations to establish the degree of damages occured , if any sustained by the client. The loss is carrying out the necessary work and any subsequent loss of rent. This provided an opportunity for the lessee to carry out the work or challenge the schedule. The lessor’s surveyor should be clear as to his client’s intentions as to the subsequent use of the building. The primary legislation, that is, the legislation concerned primarily with the ordering of the relationship between landlord and tenant is found in the landlord and tenants Act of 1927 and 1954, the latter which was amended by the law of property right. The common law relationship between the landlord and the tenant is set out in the lease, which should be a comprehensive contract between the parties. Both the lease and the landlord and tenant acts are concerned with the legal rights, powers and duties between the two parties directly concerned with the use and occupation of the premises ( Hallenborg & Stewart , 2003; 9-27). General obligations and responsibilities of agencies The responsibilities of a landlord-tenant relationship are two way. Landlords/agencies possess real duties and obligations which tenants have the rights to enforce. The major responsibility of the landlord is to ensure the property is maintained so that the tenant can have a secure, fit, hygienic habitat for himself and the family. Stewart & Walner argues that a landlord must ensure proper repair of the property to facilitate human habitation. They must also ensure that all electrical, plumbing, air conditioning heating and ventilating are in good order. They should be aware of appliances supplied or those that needs to be supplied and that are delivered in time. In addition, they should make arrangements for disposal of garbage, rubbish and other waste and maintain containers for such disposal. Waste must be collected in a systematic manner to ensure no debris are left lying on the building including on the doors of the tenants (Stewart & Walner,2010; 251). Landlords must ensure enough water is supplied frequently or at all times to reduce diseases caused by inadequate supply of water. If the tenant pays for their water bills, they must also ensure reasonable amounts of clean water at all times. Heat supply is another responsibility of landlords except if the agreement states otherwise. Some housing codes require the landlord to supply heat, but the tenant may cater for that separately (Robert, Floyd & Marie, 1999; 68-72). Application of the legislation to the scenario in question The health and safety act 1974 is an enabling act , which includes laws such as control of hazardous substances .It also requires minimum temperatures, minimum sanitary conveniences, standards of ventilation and lighting, access , safety of machinery and special arrangements in connection with toxic and dangerous materials. This requires an assessment and minimization of risk, staff trained and records kept. The act also guarantees the tenant to request for necessary repairs to be made in case the apartment they are living in has a problem. If the landlord ignores the request, it must be provided as written material and a copy preserved for reference. In the above scenario, there is lack of frequent maintenance and assessment of the building. Having been granted the lease for 20 years, Younes Finance Limited is charged with the responsibility of refurbishing the property on interval basis. It is evident from the scenario that the last time the assessment was made was in 2005, and no records have been kept since. This is a clear infringement of the health and safety act stated above. The Environmental Act 1995 retrospectively inserted powers for an enforcing authority (local or environmental agency) to serve a remediation notice on the owner or occupier of a contaminated property, closed landfills or special sites. In the first place, remediation should be carried out by the person or people who caused the damage or contamination to be accused under the court of law. In this scenario, the Younes Finance Limited who happens to be the agents of plain estates bear the accusations of exposing the flue treated with powder and friable asbestos. They further failed to issue a remediation notice to Lister Estates owner though it is not known whether they are responsible for the exposed asbestos that threatened human lives. Younes are required to recover the costs of repairing the exposed wall and furnish in appropriate rendering. According to Adamson, landlord is also under obligation to care for persons who might be affected. The duty rises not only when the landlord is aware of the disrepair but also when he ought reasonably to have known and reserving a right to inspect would seem to imply the latter conditions as satisfied. In this case, the agencies did not care for the persons infected nor did they inspect the building in the first place (Adamson, 2008, 13-14). Disability discrimination act All service providers have, under the terms of the Disability Discrimination Act 1995, a duty to make adjustments to the building or provide a suitable alternative provision of the service so that they do not discriminate against a disabled person or persons. It is the service provider who offers the service and not the building that has to comply. Even though a new building may be constructed based upon the best practice and meet all current and proposed standards for disabled parties, an occupier may not be meeting their obligations under the DDA if they do not have an effective management policy in place (Waterman & Bell, 2003; 126). The above scenario shows Younes agencies authorizing the owner of PLC estates to provide a toilet for disabled users in the common parts. It is clear from the legislation that service providers are obliged to provide a toilet for disabled users in the common parts for their visitors and other users. By requesting Lister to provide the facility, Younes are intentionally infringing the act. In preparing the specifications for approval of alterations, the law finds Younes guilty for the absence of the ablution facility in question. Dilapidation Before any building work can be done, a dilapidations report on any neighboring property or building detailing the conditions of the structure, footpath and roads is done. The report normally itemizes all defects found on these structures and their photos. The surveyor then gives a report on all external and internal conditions of the structures and times will even include government assets such as footpaths and roads. The construction work to be surveyed may include a new building, Road and pathways, demolitions, renovation, underground excavation and retaining walls. The report is of great importance in instances where the owners of the neighboring buildings and structures believe that one caused damages to them in the event of building activity. This report is usually used in defense in case of such claims (Smith & Peter, 2001; 198-200). Once the conditions of the building are established, the report showing the state of this structure should be signed by all parties prior to building commencement. The properties which are commonly inspected include commercial structures and buildings, domestic dwelling and areas which have been landscaped. The size of work involved determine the dilapidation extent and thus big projects such as pipelines and tunnels and major roads entails dilapidation survey being carried out on several properties (Kogan Page Ltd, 2011, 89) The first assessment takes place prior to any job commencement and should ensure that all facts and findings are records such as breakages, scratches and cracks. On completion of the work, another survey and report will be taken that will be used give valuable information to any interested person or party; the report is used in verification of any damage that may have been caused during construction. In this scenario, there is no evidence of dilapidation report (Banfield, 2005; 102). Fire and safety The health and safety act 1974 is widely applicable to fire issues. It is primarily concerned with the need for fire certificates and the means with which they may be enforced and consequential works for fire protection. The act requires buildings in which more than 20 people inhabit to have a fire certificate. This contains the use covered by the certificate, the means of escape, maintenance and means of escape. It also covers the means of fighting fire and means of giving warning, particulars as to do with dangerous materials. the same certificate impose matters like ensuring that escape is free from obstruction, maintenance of equipment, instructions, limitations of persons in the building and anything else the fire authority consider appropriate (Blandy , Dupuis & Dixon ,2010 ;206). In practice, granting a fire certificate will be conditional upon the testing of alarms and precautions, safety equipment and keeping a log book. A person in default may, if convicted be liable to an unlimited fine and two years imprisonment. The given scenario does not explain any fire certificate issued to even one tenant, an infringement of the law. Advice to Plain Estates-PLC Special provisions apply to improvements required by disabled residential occupiers to facilitate their enjoyment of their home. In these circumstances, section 49 G of the disability discrimination act 1995 prevents the landlord from unreasonably withholding or delaying consent to such alterations. However, this only applies where a lessee allows the leaseholder to make alterations approved by the landlord and provided the leaseholder has applied in writing for such consent. A landlord who refuses consent must give a leaseholder a written statement of the reason why consent has been withheld. If an issue arises to whether a landlord was acting reasonably either in refusing consent or as regards any condition imposed on any consent, it is for the landlord to prove that he has acted reasonably. Waterman and Bell argues that if consent is unreasonably withheld, the leaseholder is entitled to proceed as if consent has been given. If consent is granted subject to an unreasonable condition, the leaseholder may treat the landlord decision as a refusal ((Waterman & Bell, 2003; 53). In the scenario, the landlord cannot be judged as intentionally withholding the consent nor did he refuse to construct the toilets for the disabled. The assumption is that Younes being the leaseholder are aware of the legislation regarding disabled persons. By asking Lister to construct the toilets, they are taking advantage of the lessor’s ignorance. It is the sole responsibility of Younes to construct ablution facilities and not Lister. In this case, Lister is covered by the law and can sue Younes. Contractual provisions A residential lease is likely to contain a schedule setting out , at length, those items relating to the management, maintenance, repair and insurance of the building , for which the ground landlord is entitled to claim reimbursement from the leaseholder. Conventionally, such schedules are widely drawn to include finance charges, professional fees and administration costs to ensure the landlord can never be out of pocket. The leaseholder is required to contribute towards the landlord’s costs in providing services to the building as a whole (Ward 2006, 47). Insurance Insurance in the context of leased property is very important thing to have, for both the lessee and the lessee. This stems from the nature of the leases as well as the contract. As a contract, the lease describes the various agreements between the lessor and the lessee. One of the most crucial agreements that the lesser and lessee makes reference to two main forms of risks found in leased property;;the risk of loss resulting from fire or property damage and the risk of liability to damage of property, death or personal injury. Regarding property damage and loss, basically for the lesser, there are two risks; damage to the lesser’s building resulting in termination of the lease, and interference in what the lessor gets from the property. For the lease, the risk involves repairing the damage, inability to utilize and the possible duty to continue paying rent despite the damage and loss of use. Leasers deal with these two risks through provisions for insurance, indemnity, waivers, subordinations and releases. Lawyers attempt to allocate these risks depending on whether it is simple negligence or gross negligence (Allswang, 1983, 32). In regards to the scenario, Younes and Lister in the first place failed to come to an agreement on how to insure the property. Thus when tenants started dying as a result of asbestos exposure, they could not compensate them. The neglect of legislation in this case is gross because of the failure to inspect the property on regular basis for dilapidations. If they could carry out the risk assessment on regular basis, they would come up with a provision for insurance. Repair Phrases are used to indicate the obligations are: in repair, in good repair, in good and tenantable repair, in good and substantial repair and in structural repair. The standard of repair work required is that to reflect the state, condition and character of the property at the commencement of the lease. A prudent lessee should have a full structural survey carried out by an experienced building surveyor with necessary special assistance. The surveyor should estimate the likely repair cost of the building. Instead of a full repairing lease, a building may be let under an internal repairing lease. Landlords wishing to alter the terms of the lease may be sued under the court of law (Smith & Peter, 2001; 198-200) Concerning repairs, smith and peter purports,” the tenant is responsible for repairs necessary to maintain the premises in the same state as when he took them. If however wind and weather had a greater effect upon the premises, having regard to their character, than if the premises had been sound to the tenant is not bound so to repair as to meet the extra effect of the dilapidation so caused” In Regis Property Co.Ltd. V. Dudley, 1959, the country court judge held that….it does not mean that if there is a defect originally preceding from observable wear and tear the tenant is supposed to wait until the landlord comes to attend to the defect.……. If the tenant is responsible for repairs but there is no corresponding liability on the landlord for external maintenance, in most cases the tenant cannot compel the landlord to repair. In the scenario, the building requires a lot of repair that may not be handled by the tenant. It is the landlord who is supposed to repair. Conclusion A few months before the end of the lease, the lessor’s surveyor in accordance with the provisions for entry in the lease should prepare a schedule of dilapidations in order to analyze damages that might have occurred if any, sustained by the client. In the scenario above, the result will be arrived at by agreement between Younes and Lister and both will probably enter the negotiation with a little to give away. They should either adopt an inflexible attitude; there may be provision in the lease for arbitration. Alternatively, the matter will have to be referred to courts. If the lessee does carry the out the improvements then there is provision for compensation for the improvements on quitting. References Banfield, A (2005), Stapleton’s Real Estate Management and Legislations, Cromwell press, Trowbridge, London Ward C (2006) Residential Leaseholders Handbook, Taylor & Francis Waterman I & Bell J (2003), Disabled Access to Facilities, Taylor & Francis Robert K, Floyd B & Marie S (1999) ,Property Management, 6th Edition, Dearborn Real Estate, Chicago Smith P& Peter F (2001), West & Smith’s Law of Dilapidations, Taylor & Francis John R (2000), The Language of Real Estate Textbook, 5th Edition, Dearborn Real Estate, Chicago Blandy S, Dupuis A & Dixon J (2010), Multi-Owned Law, Power and Practice, Ashgate, Burlington. 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