Submission Questions

Question 1

Define timely manner for issuing service charge documentation

Answer 1

• budget issued 1 month before commencement
• YE documentation issued within 4 months

Question 2

Purpose of Service Charges in Commercial Property - 1 April 2019

Answer 2

• promotes best practice, uniformity, fairness and transparency
• 9 mandatory principles

Question 3

Purpose of Commercial Property Management in England and Wales - 1 October 2011

Answer 3

• act as LL agent, manage third parties and duty of care to LL
• maintain tenancy records
• ensure lease compliance
• collect rent, service charge and other funds
• ensure day to day liaison

Question 4

What did you do when Tenant at Interchange paid monthly rather than quarterly

Answer 4

• sent their lease clause
• stated funds to be paid quarterly in advance on English Quarter Days
• threatened to charge interest as per lease (4% above base rate after 7 days of non payment)

Question 5

Not to be unreasonably withheld or delayed

Answer 5

-s19 LL&Act 1927 - withheld
-s1 LL&T Act 1988 - delayed

Question 6

What is a LtA?

Answer 6

• document that contains written approval from LL to T
• allows T to make changes to the property

Question 7

Purpose of PPM

Answer 7

• notes costs for different elements over 10 years
• shows cost per year breakdown
• split into categories like roof, external, internal, mechanical/electrical, lifts

Question 8

What is a service charge reconciliation?

Answer 8

• at end of service charge period, you compare actual expenditure to budgeted figures
• use invoices to check actual expenditure

Question 9

When do changes need to be legally documented in Property Management?

Answer 9

• Licence to Alter
• Wayleave
• Licence to Assign
• Licence to Sub-let

Question 10

When might additional inspections be required?

Answer 10

• if requested by insurers EG if vacant
• if T has carried out works under LtA

Question 11

Why was an LtA required for internal partitions to be added at Interchange?

Answer 11

• they were structural alterations
• wanted the unit to be put back at the end of the tenancy

Question 12

Why did you instruct PPM at Bow Lane?

Answer 12

• must have been completed on reactive basis in past
• now scheduled to prevent issues arising
• good way to maintain investment value of property
  EG fire risk assessments, legionella testing, lift insurance inspections, external/internal repairs

Question 13

Talk me through the open market rent review at 80 New Oxford Street?

Answer 13

• received instruction from client
• checked competent and conflict of interest
• checked legal documentation
• checked assumptions and disregards in RR clause
• inspected and measured unit
• collect comparables and made recommendation

Question 14

What did the S25 notice include at 25 Watling Street?

Answer 14

Friendly notice so contained:
- property
- rent
- other terms
- health warning (proposal is for negotiation and terms are not contractually binding)

Question 15

What did you include in Terms of Engagement before completing Rent Review at 80 New Oxford St?

Answer 15

• identification of parties
• property address
• date
• currency
• investigations and limitations
• assumptions and special assumptions
• basis of value
• fee

Question 16

What is the relevance of your valuations being internal valuations?

Answer 16

They are exceptions to the Red Book

Question 17

What was your contingency in your residual valuation for Interchange?

Answer 17

I used 5% of the professional fees as had average risk, but could be 1-10% (risk dependent)

Question 18

You state that you understand that mandatory and advisory guidance of the Red Book, can you summarise the mandatory requirements?

Answer 18

• terms of engagement
• inspections and records
• assumptions and special assumptions
• bases of value
• valuation report

Question 19

Where can the valuation standards be found?

Answer 19

• in the Red Book
• issued by International Valuation Standards Council

Question 20

When valuing Imagination House, on what basis did you rank the comparables?

Answer 20

Used hierarchy of evidence to rank in order of transaction type
- open market letting
- lease renewal
- rent review
- independent expert determination
- arbitrator award

Question 21

How did you determine the yield you used for the valuation at Imagination House?

Answer 21

Analysed investment comparables

Question 22

At Interchange when you did a residual valuation, was the development pre let?

Answer 22

No, but if it was I would have used a lower percentage for developers profit
- would have been less risk and higher chance of return

Question 23

What basis did you select for building costs in your residual valuation of Interchange?

Answer 23

Used GIA as per BCIS

Question 24

What did you look at when deciding on payment plan for 45 Cannon St tenant?

Answer 24

• profit and loss account showed they were making profits again (but had been making loses during pandemic)
• management accounts showed their situation was improving and their income was outweighing their expenditure
• companies house showed where they were post covid vs pre covid so could see they were almost back at post covid levels