Question 1

Which valuation method expressly reflects the cost of planning obligations, s106 and CIL payments?

Accepted Answer

Expressly reflected in the RESIDUAL method

Question 2

What purchaser's costs are usually paid on a property purchase?

Accepted Answer

Stamp Duty Land Tax - at the prevailing rate Agent's fees - say 1% of the purchase price + VAT Solicitor's fees - say 0.5% of the purchase price + VAT

Question 3

What are the current SDLT brackets?

Accepted Answer

(REVIEW BEFORE INTERVIEW)

Question 4

What planning / legal considerations should a valuation consider?

Accepted Answer

Flooding Valuation of Ransom strips Zoning (ITZA) Party Walls Rights of Light Surrenders / renewals

Question 5

How should flooding be considered in a valuation?

Accepted Answer

Valuation report should include advice on risk of flooding as this may detrimentally impact on marketability and valuation of property The Environment Agency website can be used to check flooding risk

Question 6

What is a ransom strip and how should they be considered in a valuation?

Accepted Answer

This is a piece of land which controls access to another piece of land Lands Tribunal evidence suggests value of a ransom strip could be 15%-50% of development value unlocked by inclusion of the ransom strip within proposed development The Lands Tribunal assesses each case on its own particular facts The key case is Stokes v Cambridge (1969) when a value of one third of the uplift in development site value was awarded to the owner of the ransom strip

Question 7

How should zoning (ITZA) be considered in a valuation? (HINT: HUT)

Accepted Answer

Remember HUT when talking about zoning: - Halving back principle - U - A zone A rate is a Unit of comparison - T - Zoning is a valuation Technique NOT a method Used for comparison of retail properties to create unit of comparison for different sized buildings Areas ‘zoned’ on ground floor and value attributed to each zone is ‘halved back’ from front to rear Rationale - rental value of property reduces away from the street The halving back principle with 6.1m (20ft) zones Treatment of return frontages - usually 10% uplift but depends on comparable evidence and shoppers' footfall

Question 8

What is natural zoning?

Accepted Answer

Natural zoning is when the property zones reflect physical changes in the building, such as steps

Question 9

What is a party wall and how should party walls be considered in a valuation?

Accepted Answer

A wall is a ‘party wall’ if it stands astride the boundary of land belonging to two / more different land owners There are Chartered Surveyors who specialise in party wall disputes Party Wall Act 1996 provides a framework for resolving party wall disputes, boundary walls and excavations near neighbouring buildings Act provides a building owner, who wishes to carry out various sorts of work to an existing party wall, with additional rights going beyond ordinary common law rights

Question 10

How should rights of light be considered in a valuation and what relevant case can you think of?

Accepted Answer

Right to light of a building lasts for 20 years uninterrupted enjoyment of light without consent of a third party If a right to light is infringed, an injunction is granted /damages awarded A recent case = HKRUK 11(CHC) Ltd (a subsidiary of Highcross) v Heaney (2011) Outcome left Highcross with a remedial works bill £1m-£2.5m and a mandatory injunction to reduce scale of extended Toronto Square scheme in Leeds where 2 new floors = added to existing office building

Question 11

How should surrenders / renewals be considered in a valuation?

Accepted Answer

When landlord /tenant wants to surrender the existing lease and agree to grant a new lease (usually longer /on different lease terms) Calculation of a premium needed to reflect change in value of the leasehold interest Need to value the before and after leasehold interests Need to understand the valuation of premiums

Brainscape's Knowledge GenomeTM

The underlying principles of property law, planning and other relevant regulations or controls and their impact on property values Flashcards

Brainscape's Knowledge Genome^TM