Case Study Questions Flashcards
(81 cards)
1
Q
How did you establish the tenure of the property?
A
- Tenure is listed on Quest
- Confirmed via the lease accessed in HMLR
- Confirmed with agent
2
Q
How do you know it was built circa 1900?
A
- Architectural features including square two storey bay, Flemish bond solid brickwork, open framed porch
- Accessing reports from same street
- Properties on same street in RM listed as 1900
3
Q
What does sale by private treaty mean?
A
The process of selling an asset
- The deal is privately negotiated between seller and buyer
- Without recourse to an auction process.
4
Q
Talk me through your duty of care.
A
- a surveyor or valuer may owe a duty of care to someone who he or she knows or ought to know is likely to rely on their report, but not to someone of whose potential reliance he or she has no knowledge and no reason to know.
- A valuer who inspects ‘modest’ residential property on behalf of a mortgage lender may owe a duty of care, not only to the lender, but also to the purchaser. This applies not only where the inspection is carried out by an independent valuer but also where it is carried out in-house, that is, where the valuer is an employee of the lender.
5
Q
Talk to me about Yianni v Edwin Evans & Sons, 1982
A
- Valuers provided a report to lender
- Subsidence discovered
- Action taken against valuers
- Court established valuers owed a duty of care to the plaintiffs and that there was a sufficient link between the parties that it could be foreseen that the carelessness of the valuation report might cause damage to the plaintiffs.
6
Q
Tell me about the lender service level agreement
A
- Same day sign off
7
Q
How did you ensure that you met the terms of the lender’s SLA?
A
- I provided the initial report the same day as the instruction
- I responded to the PVQ within three working days
8
Q
You mention same day sign off SLA? Were you under pressure to sign the valuation and report off the same day?
A
- I always aim to provide the report within Nationwide’s SLA
- However, my priority is to ensure I am providing the correct advice
- I would not prioritise meeting the SLA over ensuring correct advice is provided.
- If I was not going to meet SLA I would advise Nationwide of the situation
9
Q
What were the limitations of the inspection?
A
-UK VPA 11 – limitations of inspections
Inspect the exterior and interior of the property as is readily accessible without undue difficulty or risk to personal safety
- Inspection should include all of the property that is visible when standing at ground level within the boundaries of the site and adjacent public/communal areas, and when standing at the various floor levels
10
Q
What checks did you complete for conflicts of interest?
A
- I accessed Quest and Xit2 to see if there were any existing reports completed by my colleagues
- I viewed the applicants details to determine if I had any conflict with them
- I viewed the agent
- I viewed the address of the subject
11
Q
What is included in the terms of engagement?
A
- Nationwide has standard terms of engagement
What is included (memorise a 3/4 examples) - Identification valuer
- Identification client
- Currency
- Valuation date
12
Q
Tell me about RICS Valuation Global Standards (2020)
A
- applies the latest international standards
- supplements them with additional requirements and best practice guidance that, when combined, provide the highest levels of assurance regarding professionalism and quality.
MAKE BETTER ANSWER
13
Q
Tell me about UK National Supplement (2019)
A
- The UK national supplement augments the Global Red Book for valuations that are subject to UK jurisdiction.
14
Q
Tell me about RICS Surveying safely: health and safety principles for property professionals 2nd edition, November 2018
A
- good practice principles for health and safety
- Firms have responsibility to have rules in place
- ‘Safe person’ concept - each individual assumes individual behavioural responsibility for their own, colleagues’ and others’ health and safety
- RICS firms must provide:
o safe working environment, safe work equipment, competent staff.
15
Q
Tell me about RICS Property measurement 2nd edition, January 2018
A
- The latest guidance incorporates International Property Measurement Standards (IPMS) Residential
- Definitions
- Replaces CoMP
16
Q
Tell me about RICS Comparable evidence in real estate valuation 1st edition, October 2019
A
- Use of comparable evidence
- Consistency
- Availability and use of evidence
- Sources of data and ranking
17
Q
Tell me about Nationwide minimum standards
A
- 3x Comps
- 6 months old
- Distance etc
18
Q
Talk me through your use of Quest.
A
- Used to access instruction details
- Tenure
- Purchase price
- Previous reports
- Conflicts of interest
19
Q
Talk me through your due diligence.
A
- Conflicts of interest
- Previous reports
- Lease terms
- Marketing material
- Location to assess locality
20
Q
What lease terms did you confirm?
A
- The ULT
- GR (which was confirmed as fixed, so GR review was not required).
21
Q
How did you assess flood risk?
A
- Using the Environmental Agency Flood map
- This listed the flood risk as Flood Zone 1 – meaning there is a low probability of flooding
- The HUB system which utilises Airbus data, which confirmed the flood risk was low
22
Q
What risk did the bedrock pose?
A
- The geological survey database listed the bedrock as clay
- This is susceptible to changes in volume depending on the amount of moisture present – shrink and swell
- This change in volume can cause movement in buildings
- Causing cracking
- This is exacerbated by the presence of vegetation – however there was no major vegetation present in close proximity to the subject
23
Q
What was the relevance of the EPC D rating?
A
- Below rating C – which is future aims of the government
- Relevant when comparing properties
- The UK Government is committed to achieve a minimum EPC rating of C across all housing stock by 2030.
24
Q
What is the impact of the conservation area?
A
- External changes to buildings are limited
- Choice of materials restricted - cost
- Planning permission may be required
- Trees protected
25
What site specific planning policies could be in place?
- Article 4 Direction
- An article 4 direction is made by the local planning authority.
- It restricts the scope of permitted development rights either in relation to a particular area or site, or a particular type of development anywhere in the authority’s area.
- Where an article 4 direction is in effect, a planning application may be required for development that would otherwise have been permitted development.
26
How did you calibrate your Distometer?
- Perform check measurements (home door frame) regularly (I know the measurements) 85 cm
- Calibration function - follow prompts
- If errors send to manufacturers to be recalibrated
27
How do you calibrate a moisture meter?
- Protimeter pin type meters are sold with a calibration check device.
- This device is placed across the pins and should give a reading of 18%
28
Is the moisture meter calibrated to wood? How does this impact the results?
- Shows an equivalent moisture value
| - Still shows patterns/profiles
29
Talk me through your risk assessment
Identify hazards - who impacted - evaluate - record - Implement
30
Talk me through your dynamic risk assessment.
- continually re-evaluate the work, the working environment, and the competence of myself and others to continue with the work activity
31
What risks did you identify?
- Covid-19 (although prior to restrictions being implemented)
- Traffic
- Being a lone worker.
32
What relevant site information did you note?
- Proximity of trees
- Proximity of other building
- Type of use of other buildings
33
What is the difference between IPMS 3A,GEA and GIA?
- IPMS 3A and GEA are similar external measurements
| - GIA is the internal measurement take to the internal wall finish
34
How did you apply BRE Digest 251?
- Took a series of measurements
- Category 3 due to cracking 3-5mm width
- Potential impact to the structural stability and weathertightness
35
What are the implications of category 3?
- Potential impact to the structural stability and weathertightness
- Brickwork may require reconstruction or bonding technique/joint reinforcement
- Additionally the cracks appeared to be recent/on going
36
How did you follow the trail?
- Completed the inspection in a logical sequence
- Aware that each element should not be considered in isolation
- Having seen external cracking I followed the trail of suspicion to determine if the defect manifested internally
37
What information did you obtain by opening the windows and doors?
- The windows to the bay stuck when opened, indicating distortion had occurred, furthering my suspicious of movement
- The doors opened and closed and were square to their frame, indicating the movement was limited to the bay area
38
Why did you determine this movement was excessive and not just long-standing movement typical in properties in this area?
- The width of the cracks
- Placing the cracks in category 3 of BRE 251 digest
- Cracks appeared recent – sharp edges, lack of dust, cobwebs etc
- Assessed there was sufficient evidence to indicate the movement was not long-standing
39
You didn’t mention the cracking above the door?
- Noted the isolated area of cracking over the door in my site notes
- However, it is largely cracking/flaking of the paint
- The width was approx. 1mm hairline
- Isolated extent and length
- Therefore considered a largely cosmetic issues
40
Why did you consider the fine cracking to be historic/low risk?
- The fine with of the crack 1-2mm
- Category 1-2 BRE
- Expected due to age of property and clay soil
- Appeared older cracking – rounded edge, dust/debris in crack
- No corresponding cracking internally
41
What are the implications of BRE category 1-2?
- Treated using decoration.
| - Damage generally restricted to internal wall finishes; cracks rarely visible in external brickwork.
42
Did you follow the trail and check internally for cracking on the flank wall?
- Yes there was no corresponding internal cracking
| - Supported my diagnosis that the cracking was longstanding
43
You mention the size of the cracking but how did you determine this was recent?
- Recent crack edges are sharper
| - Lack of debris in crack (dust, cobwebs etc)
44
Visual issues with the drains?
- cracking around manhole etc
- No water leaking
- No ground settling around the drains as the fines are washed away
45
Explain your conclusion that the replacement windows were a possible factor.
Why were the plastic windows a contributing factor.
- Load bearing capacity of timber is better than plastic
| - PVC windows more likely to flex as not as strong as the original timber windows in compression
46
You mention the windows were the cause but did you not consider other factors such as heavier, concrete interlocking tiles causing roof spread or the bressummer beam failing?
Roof spread discounted as would typically see cracking higher up
-Bressummer beam-brickwork would be sagging in the middle of the wall
47
You mention the windows were the cause but did you not consider other factors such as heavier, concrete interlocking tiles causing roof spread or the bressummer beam failing?
Roof spread discounted as would typically see cracking higher up
-Bressummer beam-brickwork would be sagging in the middle of the wall
48
-You held a full retention for the cracking? Could you not have been more pragmatic and held a retention for the estimated cost of the works?
- The scope of the report is a mortgage valuation and specialist advice was required
- Extent of the issue could be more far reaching.
- Lender policy also states hold a full retention pending SER from a suitably qualified structural engineer
49
Why was a full retention required?
- Lender policy
- Risk of on going movement
- To assess the cause of the movement
- To provide remedial works
50
Could the issue have been dealt with insurance?
- Required to follow lender policy
- SER required to assess extent of defect
- Delays - would have caused sale to fall through
- Insurance would have wanted to monitor - to reduce their claim
51
What were the requirements for the SER?
- Structural appraisal
- Assess movement
- Draw conclusions
- Recommendations
52
What did you think of the recommended solution proposed by the structural engineer?
- I considered the recommendations suitably addressed the concerns regarding the front elevations
- The helical bar reinforcements would suitably address the cracking between the GF and FF windows
- And the reconstruction of the brickwork would address the issues where the arch had dropped
- The report also agreed the movement the rear addition was longstanding
53
vHow do the helical bar reinforcements work? Are they effective?
- Designed for stitch cracking – stabilising the wall resorting structural integrity
- They are considered an effective method to strength masonry walls
54
Would you always follow the recommendation of a structural engineer?
- No I would always use my own knowledge to assess the SER
| - If I disagreed, I would push back to the engineer and request further information
55
If they stated the movement was long stating would you have recommended any remedial works?
- Even if movement longstanding still potential for other issues to occur as a result of the cracking e.g. water ingress potential so would still advise the cracking should be made good.
- E.g. apply £2k retention for repointing etc
56
Did you consider any alternative options?
- Could have applied a retention, but lender guidance determined that the property must be declined pending SER
- Robust reason why is was rejected
57
Dis you comment on service charges?
| What dis you advise conveyancer?
- Not within scope of MV to comment on SC
- Advised conveyancer enquire who responsibilities of external walls fall and establish whether SC in place
LIABILITY - SPLIT - DISPUTE
- LIABILITY - The liability for the works needs to be ascertained
- SPLIT Is the liability for repairs split equally between the leaseholders?
- DISPUTE - Is there a suitable process for settling disputes which may arise?
58
What are the implications of not having a service charge?
- UP FRONT - works may have to be paid up front
- DISPUTE - over payment for works
- CONVAYANCER - advised conveyancer to establish who the financial liability of the works lay
- ASSUMPTIONS - UK VPGA 11 - assumption - costs of repairs to building are shared equally between the flats
59
Define market value
- The estimated amount for which an asset should exchange on valuation date
- between willing buyer and willing seller
- arm’s length transaction
- after proper marketing
- where the parties had acted knowledgeably and without compulsion
60
You mentioned you read the lease, did you read the whole lease? What were the most important parts of the lease?
- I did not read the whole lease
- I extracted relevant information
- The ULT
- The GR
- Whether the GR was fixed or escalating
61
What is an unusual/onerous covenant, encumbrances or outgoing?
- covenant - restricts owner from doing something
- Encumbrances - burden adversely affects property
- Outgoing - costs incurred by owning property
62
How did you comply with the Red Book?
VPS 3 - Reporting,
- CLEAR Clearly set out valuation
- TOE
VPGA2 - Loan security
- BASIS - of value
- ASSUMPTIONS - Outlined special assumptions
- VACANT - The property is vacant
63
Define the comparable method
Value of one property may be derived by comparing it with market transactions for similar properties.
64
Did you consider any alternative options for valuing the property?
- Price per square meter as above
- Didn’t use because:
o variability in the floor areas of properties in the vicinity
o the inaccuracy of floor area measurements on Rightmove SCT
o variation in values based on specific locational factors
65
What search criteria did you apply when sourcing comparable evidence?
- Within 500m
- Within 6 months
- Similar age
66
What special purchasers did you consider?
- Whether for a buyer the property had a special value attributed
- Discussed with agent
67
What is the impact of the EPC rating?
- UK VPGA 11 (EPC is to be considered
- Market not currently reflecting differences in value
- Demonstrated I have considered it and the works to improve to a C in my rationale
68
You mention hierarchy of evidence, explain this?
- Closest comp that is most similar for SP and recent transaction date
- Moving to less close comps where there are more differences
69
Talk me through your hierarchy of evidence.
- Comp 1 – Same road. Lesser order. WORSE
- Comp 2 – Larger. Superior order. Lacks garden. WORSE
- Comp 3 – Larger. Superior order. Additional reception. BETTER
- Comp 4 – Larger. Superior order. BETTER
70
How would you weight the importance of a comparable? -Particularly in a volatile market
- Completed sales are superior
- U/o comps useful in volatile market, but binding contract has not been completed
- Used in the rationale as secondary evidence
71
You stated lease terms on comparable evidence but you didn’t appear to consider this in your analysis?
- I considered the ULT and GR which was confirmed either via HMLR or agent
72
How did you compare the different layouts?
- Used floor plans to assess the layout, room size, access etc
73
How did the layouts affect your analysis?
- First floor properties with no direct garden are less sought after
74
How did you address potential material valuation uncertainty?
- When I supplied my valuation figure following receiving the SER I included the material uncertainty clause due to the wider concerns relating to Covid-19
- attach less weight to previous market evidence for comparison purposes, to inform opinions of value
- less certainty – and a higher degree of caution – should be attached to our valuation than would normally be the case.
- unknown future impact that COVID-19 might have on the real estate market, we recommend that you keep the valuation of [this property] under frequent review.
75
What were your key achievements?
- Completed an inspection and valuation for the purpose of secured lending
- completed the inspection in a competent manner
- utilised my building pathology knowledge to identify the movement to the front elevation bay, assessed the likely cause
- Advised that a specialist report was required
76
What would you do differently next time?
- to use one more comparable which had recently gone under offer
77
How did you act ethically?
- I communicated effectively and acted a professional manner
- Provided a high standard of service by addressing the structural movement – protecting the security for the lender and applicant
78
Subject EPC vs Comp EPCs - difference etc
Subject - D
Comps - C to E
- Noted the costs to improve to C
- Disregarded comp with G
No impact on value yet
79
What part of red book relates to inspection
Global - VPS 2
| Uk - VPGA 11
80
WHY IS YOUR RANGE WRONG?
The matrix is correct
The in text comp range was a typo/incorrectly copied across
Take responsibility
81
Extent of inspection (UK Red Book)
UK VPGA 11.3 Valuation investigations
- visual inspection of exterior/interior of property - readily accessible without risk to H/S
- inspection to area visible from ground level on site and public areas
- various floor levels.
