What should the tenant know before you advise?
Explain a property-linked payment and keep client costs separate from the firm’s income.
The question
Northbank Advisory represents a fictional UK tenant. Both listed properties meet its space and timing needs. The table gives annual rent and service charges plus a one-off advisory fee for this instruction. All terms and figures are invented.
Disclose property-linked payments in writing before making a recommendation. Explain whom Northbank represents and obtain the client’s instruction.
| A | B | |
|---|---|---|
| Annual rent (£) | 100000 | 110000 |
| Annual service charge (£) | 20000 | 10000 |
| One-off tenant advisory fee (£) | 8000 | 8000 |
A’s landlord also pays Northbank £12,000. The firm retains it; it is neither a client charge nor a client rebate. This is a supplied case policy and contract, not a statement of law.
“What should the tenant know before you advise?”
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A strong answer, step by step
Open each step in turn. This is one strong answer, not the only one.
Step 1: What must you explain first?
What would you do here? Open the move you’d make.
Keep the payment internal because the tenant does not pay it.
Tempting, but it misses something. That conflicts with the explicit disclosure policy.
Explain the payment, role and client choices in writing.
The strong move. This gives the client the information required by the case policy.
Call every landlord payment illegal.
Tempting, but it misses something. The packet states no such legal rule.
See how a strong candidate says it
“Disclose the landlord’s payment and Northbank’s tenant-advisory role before making the recommendation.”
Why it works: The supplied policy requires disclosure even when the payment does not change the client’s bill.
Step 2: What will the client pay initially?
What would you do here? Open the move you’d make.
A £116,000; B £128,000.
Tempting, but it misses something. That wrongly treats the firm’s retained payment as a client discount.
A £140,000; B £128,000.
Tempting, but it misses something. That wrongly charges the tenant the landlord’s separate payment.
Both £128,000 in the first year.
The strong move. This sums only the stated client charges.
See how a strong candidate says it
“A: £100,000 + £20,000 + £8,000 = £128,000. B: £110,000 + £10,000 + £8,000 = £128,000.”
Why it works: The retained landlord payment is not an additional tenant bill or a rebate.
Step 3: How should you frame the choice?
What would you do here? Open the move you’d make.
Recommend A because Northbank earns more.
Tempting, but it misses something. That substitutes the firm’s income for the client’s objective.
Explain the tie and obtain the client’s instruction.
The strong move. This distinguishes the client’s costs from the disclosed incentive.
Recommend B as cheaper before any new evidence.
Tempting, but it misses something. The stated first-year client costs are equal.
See how a strong candidate says it
“Present the equal initial costs and disclosed payment. Ask the client to decide which other property features matter.”
Why it works: Northbank’s extra income is not a benefit to the tenant. The given evidence does not establish a cost winner.
Step 4: How does the obligation change the advice?
The property review now identifies a £12,000 first-year maintenance obligation at A, outside its service charge. B’s costs and both properties’ other features are unchanged.
What would you do here? Open the move you’d make.
Keep the £128,000 tie because the service charge covers everything.
Tempting, but it misses something. The new evidence explicitly says the obligation is outside that charge.
Update A to £140,000 and advise on the £12,000 difference.
The strong move. This uses the newly verified client obligation and preserves the disclosure.
Subtract the firm’s landlord payment from A’s new cost.
Tempting, but it misses something. That payment is retained by the firm and is not a tenant rebate.
See how a strong candidate says it
“A rises to £140,000 in the first year; B remains £128,000. Update the comparison and explain why B now has the lower stated cost.”
Why it works: The additional obligation is outside the service charge, so it must be added once to A’s client costs.
The answer, in short
- Decision
- Update the client cost comparison and explain B’s £12,000 advantage.
- Because
- A’s newly verified obligation changes the initial tie; the firm’s landlord payment remains separately disclosed.
- What would change it
- A verified change to the obligation or the client’s stated property priorities could change the recommendation.
Common traps
- Treating the firm’s commission as a client benefit.
- Hiding a new obligation to preserve the original advice.
Check your answer
- Whom does the firm represent?
- Which payments must the case policy disclose?
- Which charges does the client actually pay?
- Did I count the new obligation once?
Last reviewed Nov 10, 2026