Case Study Questions

Question 1

What age is the building?

Answer 1

Constructed in 1980’s

Question 2

What was the construction of the building?

Answer 2

• brick elevation
• cavity wall
• traditional double pitched roof
• screed concrete flooring
• 10% office space
• adequate parking
• floor loading capacity (40KN per SM)
• 3 phase electricity

Question 3

What was the EPC?

Answer 3

E

Question 4

How do you contract out of LL T act 1954?

Answer 4

-Tenant gives up security of tenure under S24-28

• LL must serve notice on the tenant under the regulatory reform order 2003.
• if notice served 14 days or more before lease start then T simply signs declaration.
• If within 14 days of lease start date then T sign statutory declaration before solicitor or independent expert.

Question 5

When requesting tenant accounts what are you looking at?

Answer 5

Profits and losses to obtain enough information on their covenant strength regarding the rent.

Be able to establish the profits test

Question 6

What is the profits test?

Answer 6

Request three years of companies account

• if profits from last three years is three times the annual rent, they are viable.

Question 7

How did you know the property was built here?

Answer 7

When my client bought they property it was stated on the report on title

Question 8

Why did you measure on an GIA basis?

Answer 8

Wasn’t enough comparable on IMPS2 so had to measure on a dual basis

Question 9

What is GIA?

Answer 9

Gross internal area

The area measured from the internal dominant facing wall at each floor level

Question 10

What is the difference between GIA and IPMS2?

Answer 10

• internal balconies are included GIA, stated separately in IPMS 2

• external balconies are excluded GIA, stated separately in IPMS 2

• accessible rooftop terraces are excluded
GIA, stated separately IPMS 2

• areas occupied by reveals of windows at internal dominant face are excluded in GIA but included in IPMS 2

Question 11

When can the tenant charge a premium on an assignment of a lease?

Answer 11

Market rent is higher than passing = assignee going to be better off so they have to pay a premium

Question 12

How would you go about calculating a surrender premium?

Answer 12

Incorporate sc, rent, utilities, 24/7 security, agencies, vacant business rates

Question 13

The user class of property?

Answer 13

Town and country planning act 1987 amended 21st April 2021 :

As of 31st August light industrial use has been superseded to class E

Question 14

What is rateable value?

Answer 14

The VOA assessment of what the property would let for on the Open market if available.

Question 15

Are there any business rate reliefs for commercial properties?

Answer 15

3 months for offices

6 for industrial

Question 16

Was the property net effective rent or headline rent?

Answer 16

Headline rent as there wasn’t a rent free period