Case Study Questions

Question 1

What is the importance of conducting COI checks? How did you do this?

Answer 1

Conflict of Interest checks are essential to maintain impartiality, protect client trust, and uphold professional standards in line with the RICS Rules of Conduct.

Conducting COI checks ensures that I am acting in the best interests of my client and am not compromised by duties owed to another party. It helps to manage legal, reputational, and commercial risks.

I carried out conflict of interest checks using Salesforce by logging the proposed instruction details and running a search for any existing or recent relationships involving the client, counterparty, or property.
If a potential conflict was identified, I escalated it to my manager or compliance team for advice and see if the conflict could be managed for example by an information barrier.
I saved a record of the check on Salesforce to maintain a full audit trail in line with RICS ethical standards

Question 2

Which RICS Guidance document do you refer to for conflict-of-interest checks?

Answer 2

RICS Professional Statement, Conflicts of Interest (2017)

Question 3

What are the fee arrangements for this client? How are they set?

Answer 3

3% current passing Rent
12% saving from the Quoting Rent
This is the standard set of Fees for Screwfix, accounting for the fact it’s a large nationwide portfolio client.

Question 4

Why are Terms of Engagement important?

Answer 4

Terms of engagement are important to provide clarity, manage client expectations, and avoid disputes by defining the scope of services, fees, and responsibilities while ensuring legal protection and regulatory compliance.

Question 5

How did you decipher the property was steel portal frame?

Answer 5

External Clues
* Age - if built after 1960s
* Large open structure, wide span with minimal or No internal supporting columns
* Metal Cladding on Walls and Roof

Internal Clues
* Exposed Steel Columns
* No Load-bearing Internal Walls

Question 6

What are the other types of construction for industrial units apart from steel-portal frame?

Answer 6

Brick and mortar construction pre 1960 – typically seen in older industrial estate such as Dencora

Question 7

How do you know how many car parking spaces are allocated to your client when it is on an industrial estate?

Answer 7

• Lease Plan
• Definitions in the Lease
• Property Rights in the Lease

If still was unsure - Communication with landlord/agent for any informal arrangements or clarifications

Question 8

What PPE was required?

Answer 8

You are required to sign in to the store with the general manager. They will tell you what PPE if required. In the larger stores with machinery moving around, external workers like me are sometimes asked to complete a health form.
ALWAYS need – Steel Toe Capped Boots

Question 9

How would you be able to tell if your gloves had expired?

Answer 9

There is typically no expiry date on a pair of gloves. However, if it was apparent there was damage to gloves such as a worn away membrane you would need to replace them.

Question 10

RICS PS, Surveying Safely, 2nd Edition – Tell me more about this. What does it mean for surveyors?

Answer 10

RICS Surveying Safely is about being the safest you can when out on inspection. In addition, the importance of safety when lone working in light of the Suzi Lamplugh case, making sure my calendar is update with my inspection details, including location and the people I am meeting.
- RICS regulated firms + members
- assessing hazards + risks
- safe person concept
- safety on inspection/ risk assessments
- personal responsibility for your safety and those around you including your clients
- safety in the workplace
- fire safety
- competent

Question 11

When inspecting the Internal and External factors, what did you consider?

Answer 11

DO NOT MENTION DEFECTS – assumption that property is compliant with repair obligations (if you are doing a review, you are making the active assumption that the building is in good condition). Also, because it’s a Fri lease, as a tenant you should be keeping the building in a good condition.

Question 12

Why did you measure GIA not GEA? What is included and excluded?

Answer 12

I reviewed my comparables and the property’s previous measurements at letting and review, all based on GIA, so I chose to continue using GIA.

Question 13

If you were to measure the building in GEA, how would you measure?

Answer 13

The unit is an end of terrace unit, I would therefore be able to easily measure the width and depth form the outside of the property. I would just have made sure to measure passed the foliage.

Question 14

How do you measure Eaves height?

Answer 14

The vertical distance from the finished floor level to the underside of the lowest point of the roof structure or eaves.

Question 15

Why is Eaves height important for and industrial unit?

Answer 15

Shows cubic density. It is a key measurement which affects storage capacity, mezzanine potential and operational use.

Question 16

License for alteration/Deeds of variation – why are these documents important?

Answer 16

Licences for Alteration confirm landlord consent for tenant changes, while Deeds of Variation record formal lease amendments. These are both important to request to ensure the renewal lease reflects agreed terms, preventing disputes and legal uncertainty. You know what to expect on site.
For example, if there are tenants improvements, you need to check if there are a license for them and if the timeframe they were undertaken.

Question 17

What did you originally measure the unit as? Why did you adopt the landlord’s area?

Answer 17

I measured within a few sq. ft of the landlord’s measurement, the differences in measurements were too small to warrant disagreeing. I therefore deemed it appropriate to adopt the landlords’ measurements.

Question 18

What would you do if you and the landlord agent did not agree on the measurements?

Answer 18

Joint measurement with the landlord agent.

Question 19

What are the key elements of a lease are you looking out for when doing a lease renewal? And how does this vary to a rent review?

Answer 19

When you are carrying out a lease renewal you are looking to replicate the terms of the existing lease, whereas when doing a rent review, you are bound by the rent review provisions set out in the lease. Whilst you still do take into consideration the lease, the value is the review clause

Question 20

How did you know the lease was protected by the landlord and tenant act 1954?

Answer 20

It will state it in the lease, and you look out for the signed declaration in the lease.

Question 21

What was your client’s business plan?

Answer 21

Extend tenure at key strategic sites and minimise rent increases

Question 22

How would you know if it was excluded from the LTA 1954 and how would this affect the renewal process?

Answer 22

Exclusion of S.24-28 of LTA
Stat dec in appendix of lease
If excluded start negotiations 18-12 months prior to highlight your intention to the landlord, this helps to help make other arrangements if renewal is not possible

Question 23

If you this were an outside the act tenancy, how would this impact negotiations? Would you do anything differently?

Answer 23

Given my client wanted to extend their tenure, I would therefore kickstart negotiations ASAP. 18-12 months prior

Question 24

Why do you think no Section 26 was served by the landlord?

Answer 24

The market was rising quickly so the landlord was holding off from serving a s.25 notice as long as possible to capitalise on the rental growth.

Question 25

In a falling market, how do you think this would differ?

Answer 25

In a falling the market the landlord would have likely served one 12 to 6 months before the lease expiry. Or if for example if the Screwfix was paying a higher passing rent than the market rent then, the landlord may let Screwfix hold over on the higher passing rent and see if the market improves. – this is tricky q. Whether you serve 12- or 6-months’ notice for LR your valuation date will still be the same, so realistically there isn’t that much difference. If the tenancy was brought to an end after the lease renewal expiry, this would be different as the valuation date would change. Therefore, its best to just serve at the contractual end to avoid market fluctuation.

Question 26

What happens if you go past your Section 25 or 26 expiry date as a tenant?

Answer 26

The tenant can lose their right to renew.

Question 27

How do you ensure you do not go past the Section 25 or Section 26 expiry?

Answer 27

Diarise the date detailed in the Section 25 or 26 and ensure if you have an impending section 25 or 26 notice then you need to mitigate this by getting the solicitors to agree to extend the timeframe, to protect yourself. Typically, you can get a one, two, three-month extension.

Question 28

If an extension is not agreed, what happens?

Answer 28

Can go to County court or PACT.

Question 29

Why is PACT preferable to court?

Answer 29

Court the judge decides on rental levels whereas PACT will be a qualified surveyor.

Question 30

Why would you choose going to court over PACT?

Answer 30

If you want to implement a clear timetable, it’s a quite a clean-cut process.

Question 31

When if Court most appropriate and when is PACT?

Answer 31

Court is most appropriate when two parties cannot agree on a number of terms. However, PACT is best when there is just one part the parties cannot agree on such as the rent. If there are substantial disagreements between the parties that’s why going to court is best. Court is sometimes used as an aggressor to expedite the process.

Question 32

What is the Section 30 grounds?

Answer 32

Fault Based – Beach of Repairing Covenant, Persistent Delay in Paying Rent, Other Substantial Breaches Quasi Fault Based – Provide Suitable Alternative Accommodation Non-Fault Based – Uneconomic Subdivision, Demolition or Reconstruction, Owner Occupation

Question 33

If a landlord section a Section 30 ground E for redevelopment, what would they have to prove?

Answer 33

The landlord would need to prove firm and genuine intent. Evidence to prove firm intent can include: architectural plans and drawings, planning permission, financial evidence, construction contracts or schedules.

Question 34

What would the non-fault grounds of Section 30 be awarded by?

Answer 34

Compensation is payable under Section 27. >14 years of occupation = 2x Rateable Value <14 years of occupation = 1 x Rateable Value RV is the RV in force at the date of the hostile notice of s.26 counter notice. You can also get compensation for improvements under Part 1 of the LTA 1927.

Question 35

If the landlord decided to take the property back at renewal for their own occupation. What would be the compensation payable to the tenant if they have been in occupation for seven years?

Answer 35

One times the rateable value.

Question 36

How would this change if they had been in their longer?

Answer 36

If the tenant had been in there over 14 years it would be twice the rateable value.

Question 37

Do you think the compensation of once times the rateable value is sufficient to justify the costs associated with relocating?

Answer 37

It depends on the circumstance, because some properties have a really large RV which would help them fund a foreseeable move, however in some circumstances the rateable value is quite low and the costs of a relocation could be more.

Question 38

You mentioned you decided not to commence informal negotiations. Would it not be an idea to commence negotiations anyway to get conversations underway?

Answer 38

I choose not to progress informal negotiations due to efficiency it is best to have a timetable in place to focus for both parties.

Question 39

What are the key elements of a Section 26?

Answer 39

A Section 26 notice allows a tenant to request a new lease under the LTA 1954. It must be in writing, served 6–12 months before the proposed start date, and include key terms such as the proposed rent. The landlord can oppose renewal within 2 months by citing statutory grounds.

Question 40

When you served your Section 26, what would happen if the landlord missed the 2 month period?

Answer 40

They would lose their right to oppose.

Question 41

What did you put as your proposed rent in your Section 26, considering it was a rising market?

Answer 41

In a rising market, for Screwfix I will quote the passing rent in the Section 26 notice with a 3-month rent free period. (typical across the board)

Question 42

If the market was falling, what would you quote in your Section 26 notice?

Answer 42

If the market was falling, below passing rent, I would find my lowest bit of evidence and quote at that level.

Question 43

Are S.25 / S.26 binding?

Answer 43

No They are not legally binding, they do not themselves create a new lease or automatically terminate the existing lease. Instead these notices are procedural steps to trigger the renewal or termination process.

Question 44

What is included in the contents of a Section 25 Notice?

Answer 44

1. Name and address of LL & TT 2. Address of the Property 3. Notice of the date to end the tenancy (a hostile or friendly notice) 4. Confirmation whether a new lease is to be opposed or granted 5. Confirmation of the date of response required 6. Landlord’s proposals for a new tenancy to include proposed rent if a friendly notice 7. If the landlord opposes the new tenancy (hostile notice) the ground(s) for opposition must be stated 8. A strong recommendation to seek professional advice

Question 45

You mentioned you looked at the property’s specification, what were the key factors you looked at for?

Answer 45

Layout and Configuration: Assess clear eaves height, number/type of loading doors, warehouse to office ratio Internal specification: lighting (LED vs Florescent), heating Condition and Repair: Check general state of repair - roof, walls, floors, (in line with FRI) Tenant's improvements: Identify any tenant fit out works - disregard Floor loading capacity: is the floor heavy-duty concrete? At the front of the property, the trade counter section features suspended ceilings, a suspended floor, and fluorescent lighting panels. The rear warehouse section has 4.5m eaves height, concrete flooring, metal racking, and a profile steel roof with translucent roof lights and fluorescent light strips.

Question 46

You mentioned you adjustments in specification. How did you quantify these adjustments?

Answer 46

I make adjustments on a Case by case basis. Assumed term – 1% year term certain however market norm is 0.5% per term certain Size – rarely make adjustments unless there is a huge difference Inside vs Outside – 5% adjustment Specification – very subjective, 5 %, 7%, 10% (if the properties were vastly different for example Grade A vs B then 7.5% would be the minimum) I am aware of arbitration and independent expert outcomes throughout my team and where the precedent has been set for adjustments.

Question 47

What is the Odey Case?

Answer 47

Incorporate all of the rent-free period from comparables at lease renewals including what would be rent free for a fit-out period in lease renewals.

Question 48

You said your key comparable Unit 2 was more prominent, however you did make any adjustment for this, why?

Answer 48

It has become apparent Trade Counters have become more Destination Stores. The customer is already intending to go there, therefore for a trade counter prominence is not as important. Therefore, there is no need to make an adjustment.

Question 49

You mentioned Toolstation, Unit two was in legals? How come you placed most weight on this piece of evidence in your negotiations?

Answer 49

We knew from conversations with the landlord agent that deal was provisionally agreed and in legals we were therefore confident it was a solid piece of evidence. It was clear that it was one of Toolstation strategic sites and they were keen to progress legals as soon as possible. In addition, when looking at our other comparables making adjustments for them the evidence was showing over £20 psf, therefore I was confident £20 psf was a good deal for my client.

Question 50

How did you comparable the subject property with your comparables?

Answer 50

The key comparables on the estate was Unit 2 which was almost identical. The other units on the estate were all of a similar specification because they were refurbished.

Question 51

Why were you asking lease terms which were different to the current lease arrangements?

Answer 51

Modernisation of the lease, in line with current standard market practice.

Question 52

What are the key terms in the HOTs?

Answer 52

SUBJECT TO CONTRACT

Question 53

Which RIC Rules of Conduct did you comply with?

Answer 53

Integrity – Professional judgement

Question 54

ERV?

Answer 54

If a Section 25 has been served I would use this to form my basis of valuation for ERV purposes. I would also use high level evidence with some adjustments to generate my ERV. We also repotr ERV's for SF budget rents.

Question 55

How are Screwfix budget rents calculated?

Answer 55

Based on S.25 Quote / Market Evidence

Question 56

What are the principles of the O’May case?

Answer 56

* Landlords cannot impose unfair new terms just because they would be more favourable. * Tenants are protected from unreasonable alterations that increase their obligations. * Changes must be commercially justifiable rather than simply benefiting the landlord.

Question 57

What is Section 35(1) of the LTA 1954?

Answer 57

* Section 35(1) - when a business tenant qualifies for a new lease (under security of tenure provisions), but the landlord and tenant can't agree on the new lease terms (e.g. repair obligations, length of lease, break clause). * The court can step in to decide the appropriate terms. * EXCEPT for RENT was is handled separately under Section 34.

Question 58

What was the assumed term of the St Albans lease?

Answer 58

10 years

Question 59

What was the EPC of the subject Unit?

Answer 59

B

Question 60

What are the assumed terms of SF, Toolstation old leases and CTD Tiles current lease?

Answer 60

Screwfix - 10 year assumed term Toolstation - 5 year assumed year CTD Tiles - 10 year assumed year