SOE Questions Flashcards
1
Q
What are the 5 VPS
A
1) TOE
2) Inspection, Investigation and Records
3) Valuation Reports
4) Basis of Value
5) Investment Valuation approaches
2
Q
What are the 3 types on financial statements you may come across relating to a company
A
Balance Sheets
Income Statements
Cash Flow Statements
3
Q
What is the difference between financial and management accounts
A
Financial accounts - For collecting of accounting data to create financial statements required by law
Management accounts - Internal process used to account for business transactions
4
Q
What is depreciation / amortisation on an income statement
A
How much value a companies asset has over time
Depreciation = falling value of fixed assets
Amortisation = falling value of intangible assets
5
Q
How to work out if company is solvent
A
Current assets / current liabilities = liquidity ratio
Ratio less than 1 = insolvent
OR
Acid test current assets - inventory / current liabilities
6
Q
What is IRFS16
A
Financial reporting standard, effective 1st Jan 2019
States leaseholders are required to recognise leases as assets/liabilities on financial statements
7
Q
What is EBITDA
A
Earnings before Interest, Tax, Depreciation and Amortisation
8
Q
What is GAAP and name 3 principles
A
Generally Accepted Accounting Principles = Common set of accepted accounting principles which companies must follow when compiling financial statements
Three Principles
1- Regularity
2 - Consistency
3- Sincerity
9
Q
What documents would you need to consider for property measurement
A
International Property Measurement Standards 2023
Code of Measuring Practice (2015)
10
Q
What is the difference between NIA & IPMS3
A
IPMS -
Includes columns and measures to the internal dominant face
Areas less than 1.5m in height are included, but stated separately
NIA
Internal columns & walls excludes
Areas less than 1.5m excluded
11
Q
What is the difference between GIA and IPMS 2
A
IPMS
Includes covered galleries (stated separately)
Includes area occupied by reveals of windows when measured and assessed as the internal dominant face
GIA
Excludes above
12
Q
What is the difference between IPMS1 & GEA
A
IPMS 1
Balconies and covered galleries includes by stated separately
GEA
Covered galleries included but not stated separately
Balconies Excludes
13
Q
How did you measure Unit 29 Branbridges
A
GIA basis
14
Q
What would you include/exclude on a industrial measurement
A
Include
- Areas with less than 1.5m of headroom
- Areas occupied by internal walls and partitions
- Columns, stairwells, lift wells, lift rooms, plant rooms
- Mezzanine areas with permanent access
Exclude
- Canopies
- Fire escapes
- Perimeter wall thickness
- Covered ways
15
Q
What is the internal dominant face
A
Inside finished surface comprising more than 50% of the floor to ceiling height in each IDF section
16
Q
What are the principles of the RICS Property Measurement Professional Statement (2018)
A
1) Provide measurement date
2) State measuring methodology
3) Provide reference and any scale of any plan used
4) State conversion factor and any rounding
17
Q
What is plot ratio
A
Ratio between size of site and building footprint in GEA
C.40% for industrial
18
Q
What was included in your NIA measurement for 3 Copthall
A
Includes
Skirting and perimeter trunking
Stationary Cupboards
Lift lobby
Exclude
Areas under 1.5 M
Protrusions more than 0.25m
Usuable space less than 0.25m
Internal structural areas
Corridors (If single function and not usable)
19
Q
What are the 5 conventional methods of valuation
A
Comparable
Investment
Profit
Residual
DRC
20
Q
What are red book exception
A
Clients internal purposes
Agency work
Statutory purposes
21
Q
Valuation Unit 4 Branbridges - Explain process
A
Received request from client to valuation for internal purposes, agreed TOE and had signed
Investment Method as was let an income producing
Ascertained MR from agents and comparable evidence, found property was let at MR £25k p/a
Capitalised into perp using ARY to get value
Sense checked with competent individual
Presented findings to client
22
Q
Plot 1 Residual - Method
A
Received instruction from client, agreed TOE and had signed, for internal purposes so was red book exempt.
Determined Market Value of Completed Development (MR capitalised at chosen yield)
- Less Development Costs
= Gross Development Value
- Less developers profit
= Gross Residual Value
- x of of £1 in 12 months at interest rate
= Gross Acquisition Price
Less agent and Legal fees (incl SDLT)
= Site value
23
Q
Difference between residual land value and development appraisal
A
Development appraisal assesses viability of development, usually used by developer
Residual Valuation determine the underlying land value
24
Q
What statutory due diligence would you take prior to a valuation
A
Asbestos
Tax (BR or Council)
EPC rating
Fire safety
Public Right of way
25
Describe the timeline to typical valuation instruction
Preamble
-Receive instruction
-Check competence and COI
-Issue TOE and have countersigned
Due Dillegence
- Gather info, lease, title, maos
- Undertake stat due dillegence
- Inspect and measure
- Comparable
Valuation & Report
- Undertake valuation
- Draft report
- Have surveyor review work
- Finalise and sign report
- Issue to client
Completion
- issue invoice
- ensure filing for audit
26
Three valuation approaches according to IVS
Income
Cost
Market
27
What is the red book called
RICS Valuation Global Standards (2022)
28
Changes in red book compared to previous versions
To reflect significant changes to International Valuation Standards
Consistent global language
29
What are the 5 VPS’
VPS1 - TOE
VPS2 - Inspections, Investigations & Records
VPS3 - Valuation Reports
VPS4 - Basis of Value, Assumptions and Special Assumptions
VPS5 - investment Approaches and Methods
30
What must be confirmed in TOE (Vals)
ID and status of values
ID of client
ID of any other intended uses
ID of asset being values
Currency
Purpose of Valuation
Basis of Value
Valuation Date
Scope of work
Nature of sources relied upon
Format of report
Assumptions & special assumptions
Confirmation valuation will be undertaken in accordance with IVS
Fee
CHP
Statement compliance is subject to RICS monitoring
Limitations
31
Rent Review Unit 2 Branbridges Process
Received instruction from client
Analysed clause to understand mechanism, assumptions, disregards and dispute resolution, was an open market upwards-only.
Arranged inspection and measured on GIA basis
Confirmed no breach of lease or arrears
Gathered comps to determine MR
Once determined presented MR to client
Sent proposal to T with comps & rationale
once agreed sent sols RR memo to be signed
32
What are the contents of a RR Clause
Machinery
Who can initiate RR
Assumptions, diregards
Basis of RR (Upward only, RPI, Turnover, stepped increase)
If time is of the essence
33
Lease renewal 3 Copthall process
Received instruction from client (T 12 months from expiry)
Reviewed terms, T benefitted from security of tenure
Inspected and measured
Confirmed T wasn’t in breach and had no arrears
Gathered comp, found property to be under rented
Recommended client to uplift rent by serving S25 within 6 months of expiry to £75 psf
Once terms agreed instructed sols to formalise new lease
34
Break Notice 3 Copthall Avenue Process
Client received written break notice from tenant in Jan 2023 requesting to break lease on April 19th 23
Passed to me to determine validity
Reviewed lease and found T would have to give no less than 6 months notice, therefore notice was invalid, confirmed with solicitors.
Reverted to client advising notice wasn’t valid, notified tenant after
35
What are the statutory obligations of a commercial property owner
1) Asbestos management
2) Contaimination
3) Disability and Discrimination
4) EPCs
5) Fire safety
6) Health and Safety
7) Legionnaires Disease
8) Occupiers Liability
9) PAT Testing
10) Waste Management
36
What is your company’s lone working policy
Pre site visit H&S assessment
Fully charged phone
Let colleagues know of site visit
Give return time
Wear appropriate PPE
37
What PPE have you had to wear
When inspecting a factory I wore Hard Hat, Steel Toe Cap boots. & high vis
38
When have you undergone a RA
When attending a dilapidated retail unit (Harvey Centre) with an agent
Made sure to mandate PPE and avoid specific areas
39
What is Workman’s CHP
Complaint received and passed to PIC/company secretary
Complaint acknowledged within 7 days
Written response within 28 working days
If complainant not happy ADR followed, 3rd party redress
All complaints recorded in complaints log
40
Discuss good example of client care
KanAm monthly meetings
Organise meetings
Arrange internally for reports to be completed and collate
Chair the meeting and screenshare
Share updated minutes post meeting
41
Can you give an example of where you have demonstrated effective communication skills
When obtaining information off local agents for comparable evidence purposes. I was able to use my communication skills to obtain this information free of charge despite them having no obligation to disclose the information.
42
Unit 29 Branbridges, Arrears Process
T late in making payment of Sept 2023 Q
Contacted tenant three days after rent way due to try resolve issue without need for debt recovery, no response from tenant.
Contacted client to initiate CRAR proceedings, sent out 7 day letter.
Once T received letter they made contact and paid the outstanding sums on the same day
43
Licence to assign, Unit 7A Fountains Process
Received application from tenant
Read lease and confirmed that assignment of whole lease was permitted with prior LL consent
Contacted client who agreed in principle so long as lease terms were met.
Obtained 3 years audited accounts from proposed assignee
Obtained financial review and credit report of both parties.
Info found covenant strength of proposed assignee was extremely strong and would have no issue with meeting financial obligations of the lease. AGA not required
Ensured that the T’s solicitor provided an undertaking of the costs whether or not the matter proceeded to completion.
Undertook appropriate due diligence - AML checklist & sanctions check, confirmed no breach of lease or arrears on account
Provided client with recommendation that assignment was granted, once agreed by all parties I instructed sols to document by licence to assign.
Updated systems to show assignment of lease.
44
Licence to Sublet - Unit 13
Received application from T to sublet entire unit. 5 year lease, 3 years unexpired.
Reviewed alienation clause lease and confirmed that subletting of whole was permitted subject to LL approval.
Contacted to LL who agreed in principle so long as the alienation terms were complied with.
Carried out AML & sanctions check on proposed sub tenant, confirmed T wasn’t in breach or had any arrears. Obtained undertaking for costs.
Carried out financial review of both parties to ensure terms of the lease could be met. Found that sublessee was of strong covenant.
As per lease sub-lease couldn’t be less than MR, therefore I reviewed comps and spoke to agents to confirm MR, unit was let at MR.
Received sublease and rent was at MR, recommended to proceed with subletting subject to sols reviewing lease.
Once approved I instructed sols to review sublease, no issues found. Application was documented by way of licence to sublet.
Updated records
45
What additional legislation is there to the Red book
UK National Supplement 2023 - Effective 1st May 2024
Supports red book for vials in UK jurisdictions, does not replace
46
Four key points RICS Guidance Note - Surveyors Acting as Expert Witness (2023)
1) Expert evidence must be impartial and objective
2) Duty of care to court and will override any obligations to client
3) Evidence must in independent work of surveyor
4) Surveyor must believe in the facts on which they rely are complete and true
47
What is adverse possession
When a party who doesn’t own the land becomes owner of the land (10/12 years)
48
What changes are facing the RICS
1) Sustainability drive to net-zero
2) LL’s applying for EPC exceptions due to high costs
3) Keeping the retail sector competitive
4) Changes in office model since COVID
49
How would you respond if a contractor asked you out for dinner
If in process of a tender, straight rejection
I would consider the Bribery act, dinner is proportional
I would notify PIC and register the dinner on my company’s gift register
50
What are the 5 RICS Rules of Conduct
1) Members must be honest and act with integrity
2) Members must maintain their professional competence
3) Members must provide good quality and dillegent service
4) Members must treat others with respect and encourage diversity and inclusion
5) Members must act in the public interest
51
Purpose of changes to Rules of Conduct
- Simpler Structure
- Clear examples
- Focus on Respect and D&I
- Understanding importance of tech and associated risks and benefits
52
How do you pursue a guarantor for arrears
Under S17 L&T Covenants Act 1995
53
How long do sums have to be outstanding for a guarantor to become liable
6 months
54
What is the guarantor entitled to do if they pay the arrears in full
Guarantors may request overriding lease
55
What does CPSE stand for
Commercial Property Standard Enquiries
56
What type of information would you gather as part of CPSE’s for a sale
1) Property
2) Tenant
3) Arrears
4) Compliance
5) Insurance
6) Applications
57
What is the fine for not presenting a valid EPC
12.5% of RV (Capped at £5k)
58
Unit 29 Measurement, what standard did you use?
GIA
59
When did IPMS all buildings come into effect
Jan 2023
60
Where would GEA be used
- Town planning
- Rating & Council Tax
- Building Cost estimation
61
Why is financial vetting of contractors important
- To ensure liquidity of contractor is at a good level
- To then protect L & T’s position in case of defaulting
62
What are the key pieces of RICS Guidance for Property Management
RICS Guidance Note, Commercial Property Management in England and Wales (2011)
RIC Professional Statement, Real Estate Management (2016)
63
How would you value an under rented property
T&R
Value income at current rent until rent review/lease end
Then adjust to MR, capitalise at chosen yield into perpetuity
64
How would you value an over rented property
Hardcore and Topslice Method
- Income flow divided horizontally
Hardcore (MR) valued into perp and Net initial Yield
Top slice (current rent - market rent) capitalised to next lease event at net initial yield
Top slice yield is higher due to increased risk of over renting
65
What is included in Workman’s privacy notice?
- What information you have
- What information will be used for?
- Which third parties you might share the information with?
- How long the information is being kept for?
- What legal right the firm has
66
What would you do if there was a data breach
Notify the Information Commissioners Office (ICO) within 72 hours
67
Why did you not measure Unit 29 using IPMS
- Not mandatory
- Limited comps in IPMS
68
What method did you use to measure 3 Copthall
IPMS 3
69
How does energy efficiency impact a buildings value
Improves as
- More cost effective to run sustainable building
- Investors and occupiers are more conscious about carbon footprint of building and will pay higher price for sustainable building
70
When are EPCs required on a property
When a commercial building over 50m2 is:
- newly built
- sold
- leased for longer than 6 months
- heating/cooling is altered
71
When would you not need an EPC
- listed building
- building with no heating
- temporary buildings
- buildings set to be demolished
- buildings less than 50m2
72
Under what circumstances is a building exempt from MEES?
- If property doesn’t need EPC
- If increasing rating isn’t feasible assuming payback period of 7 years (3 quotes must be sought)
- If changes would reduce the value of the property by +5%
Exemptions last 5 years, can’t be transferred at sale
73
What legislation relates to money laundering
- Proceed of Crime Act (2002)
- Bribery Act (2010)
- Money Laundering, Terrorist Financing & Transfer of Funds Act (2017)
74
What are the penalties under the Money Laundering, Terrorist Financing & Transfer of Funds Act (2017)
Being complicit in money laundering = up to 14 years in prison + unlimited fine
Failing to report money laundering = up to 5 years in prison + unlimited fine
75
What is Workman’s policy on money laundering
- Carry out conflict of interest checks
- AML risk assesments
- Gifts register
- Vets - tenants, potential clients and contractors
76
What is Workman’s gift policy
- Consider proportionality and circumstances
- If acceptable, notify PIC and register on Workman’s E-register
For contractors
- if accepting gift is to be raffled
For client
- If accepted, may keep however to be shared with team working on client
77
How do you understand a client’s aims and objectives
- Ask questions and listen carefully
- Understand client brief
78
Give an example of a client aim and objective you have worked on
Branbridges EPC project, getting entire estate to minimum B
79
What forms of communication are there
- Verbal
- Non-verbal
- Written
- Presentation
- Listening
80
What are the types of negotiation
Hard - Goal of victory
Soft - Goal of agreement
Principled - Goal of problem solving
81
What is my style of negotiation
Depends on situation primarily
Accommodating - maintaining relationship a priority
Collaborative - mutual success
In extreme examples (debt collection)
Dominant - outcome over relationship
82
What types of H&S training have you had
- Legionella Awareness
- Asbestos
- General H&S
- Contractor management
83
What are the penalties for breaching the H&S at work act 1974
£20k fine
Imprisonment
84
What legislation relates to asbestos
Control of Asbestos Regulations (2012)
85
What is IOSH
Institution of Occupational Safety and Health
Global organisation for H&S professionals
86
Give an example of something you learnt on IOSH
- Contractor Management
- How to write RA
- How to identify risk
87
What is your understanding of GAAP
Generally Accepted Accounting Principles
- Standards that encompass the details, complexities and legalities of business accounting
- must be followed when compiling financial statements
Introduced to improve the clarity of communicating financial information
88
What are the 3 principles of GAAP
RCS
1. Regularity
2. Consistency
3. Sincerity
89
Tell me about a common financial measure
Current Ratio = Current Assets / Current Liabilities
aka Working Capital Ratio
90
What are the 3 types of financial statement you might come across relating to a company
1. Balance Sheets
2. Income Statements
3. Cash Flow Statements
91
What is the basis of value under IRFS 13
Fair Value
92
What is IRFS 16
Obligation for leaseholders to show leases in their financial reporting (balance sheet etc)
Came into effect 1st Jan 2019
93
What is the result of IRFS 16
Increase in assets, liabilities and debt when lease is bought onto balance sheet
Could result in entities taking shorter leases to reduce debt on balance sheet
94
What RICS Guidance do you relate to in relation to handling client money
RICS Professional Statement, Client Money Handling (2019)
95
What is a P&L account
Summary of business income and expenditure transactions on an annual basis, gives overall P or L figure
96
How is gross profit calculated
Turnover - cost of sales
97
What is Net Asset Value
Total assets - total liabilities
If share price is higher than NAV per share, the market expects the company to make future profit
98
What are the 3 parts of a balance sheet
- Assets
- Liabilities
- Owners Equity
99
How would you work out if a company was solvent
Current assets / current liabilities (liquidity ratio)
(Current Assets - Stock) / Current liabilities (Acid test)
- More short term approach, measures ability for quick assets/cash to meet liabilities
100
Name a KPI you have worked with
Rent collection, 98% by Day 28
Failure to meet will reduce performance bonus and reduce likelihood of new instruction
101
What RICS Guidance is there on conflict on interest
RICS Professional Statement, Conflict of Interest (2017)
102
What are the three main processes to solve disputes
1. Negotiation
2. Mediation
3. 3rd Party Dispute Resolution
103
What is ADR
= Alternative Dispute Resolution
Dispute resolution service which falls outside of the scope of the court
Quicker and less costly, decided by a surveyor instead of a judge
104
What is PACT
Professional Arbitration on Court Terms
- Form of arbitration for lease renewals
- Is an alternative to litigation
- Is legally binding
105
What are the principles of GDPR
- Information used lawfully, fairly and transparently
collected for specified, explicit, and legitimate purposes
- Adequate, relevant and limited to necessity
- Accurate (kept up to date)
- Kept no longer than necessary
- Kept safe
106
What are the individual rights under GDPR
-To be informed
-To access
-To rectification
-To erasure
-To restrict processing
-To data portability
-To object
-To automated decision making and profiling
107
What is the penalty for breaching GDPR
Up to 20 million euros
Or 4% global turnover
108
What is Workman's policy in case of a data breach
Suspect breaches reported to PIC and firms data protection officer
109
What are challenges facing the RICS
- Sustainability drive to net zero
- Keeping retail sector competitive with rise of E-commerce
- Adapting office sector post COVID
110
What is the Land Registration Act (2002)
States all leases and freeholds over 7 years must be registered with compliant plan (10 years for adverse possession)
Gives goal of having all property registered electronically by 2030
111
What is required for compliant Land Registry Plan
- Drawn on scale of 1:100 or 1:200
- Have a scale measurement bar
- Have scale noted on the plan
- Include a 1:1250 scale map of the location (for urban areas)
- Full address including postcode
- North point arrow
- Demise outlined in red
112
What is the legal framework for equality and diversity
Equality Act (2010)
113
What are the 9 protected characteristics under the Equalities Act (2010)
- Age
- Gender
- Religion
- Race
- Disability
- Sex
- Sexual Orientation
- Marriage/Civil Partnership
- Pregnancy / Maternity
114
What has RICS created to promote equality
IEQM
115
What are the four principles of IEQM
1. Leadership
2. Recruitment
3. Culture
4. Development
116
Give examples of inclusive design
- Ramps
- Doors/lifts wide enough for wheelchairs
- Low hand rails
- Braille for those with visibility issues
117
What is the civil penalty for not displaying a valid EPC
12.5 of RV up to £5k
Could increase up to £30k from 2028
118
What is section 18(1) of the L&T Act 1927
States that damages are limited to the diminution in value to the Ls reversion caused by the Ts breach
Case law
Jones v Hexheimer (1950)
- Court awarded damages based on the cost of the L's repairs required for him to re-let
Smily v Townsend (1950)
- L did not intend to carry out repairs, so damage is negligible
119
What is section 19(2) L&T Act 1927
Where Ls consent can be given, it cannot be unreasonably withheld
120
What is S23 of the L&T Act 1954
Tenancies to which the act applies
- Business tenancies of over 6 months
121
What is S43 of the L&T Act 1954
Tenancies to which the act does not apply
- Agricultural Holdings
- Mining Leases
- Residential Tenancies
- Tenancies granted as condition of employment
- Tenancies not exceeding 6 months unless
- There is provision for extension
-T has been in occupation for more than 12 months
122
What is S24A of the L&T Act 1954
Application to court for interim rent
- Is the rent from the period of the expiry of the S25 or 26 (should a period exist) to the start of the new lease
Interim rent is the rent of the new tenancy unless L or T show otherwise, e.g.
- different valuation dates
- different terms of old and new tenancy
123
What is S25 of the L&T Act 1954
Landlord's notice
- Must be served between 12 or 6 months to:
a) Contractual end of the tenancy
b) Date specified in the notice i.e.
- if the tenancy has less than 6 months to run
- T is holding over under S24
- T is on periodic basis
Either a Friendly or Hostile notice is given
124
What is included in a friendly S25 notice
- Property comprised
- The rent
- The other terms
- A health warning explaining to the T that Ls proposals are for
purpose of negotiation
125
What is included in a hostile S25 notice
The ground(s) under S30(1) upon which the L would oppose the Ts application for new T
126
What is S26 of the L&T Act 1954
Ts request for new tenancy
For T who's term exceeds 12 months and has not yet received a S25 notice within the 12-6 month period (can also be requested after)
T may propose
- start date of new lease (up to 12 months from date of notice)
- Property comprised
- The rent
- Other terms
127
How may a L respond to a S26
May not serve S25
Can serve counter notice within 2 months to oppose the request for new tenancy and/or proposed terms
128
What happens if the L fails to respond to the S26 within the appropriate time window
L loses right of objection to new tenancy
Does NOT lose right of objection to new terms
129
What is S24(1) of the L&T Act 1954
If the tenancy has been terminated according to the act, the L&T may apply to court to determine the terms of the new tenancy
130
What is S27 of the L&T Act 1954
Where T wants to leave premises
Must be at least 3 months to expire and no later than the end of tenancy
131
What is your understanding of Single Horse Properties v Surrey County Council (2002)
L served S25
T served counter-notice and applied to court for new tenancy
T vacated premises and returned keys prior to expiry
Court held as tenant had ceased occupation before expiry the S25 was of no effect
132
What is S28 of the L&T Act 1954
Agreement for new tenancy
If L&T agree new tenancy for premises
- current tenancy shall continue until commencement of new tenancy and will cease to be a tenancy to which the act applies
133
What is S40 of the L&T Act 1954
Obtaining preliminary information from the other party
- L&T can request information from other party within last two years
of the term for renewing or terminating a tenancy
e.g. L may request details of occupation or sub-tenancies
T may request details of superior L
Either party must provide correct info within 1 month of request
134
What is S30 of the L&T Act 1954
Landlord's grounds for possession if opposing request for tenancy in S25 notice or in response to Ts S26 notice S30(1)
a) T has failed to carry out repairs
b) T has persistently delay paying rent
c) T is in breach of some other covenant
d) L offers suitable alternative accommodation
e) Where tenancy was created by a sub tenancy and the building let as a while would produce a higher rent than from separate lettings
f) L intends to demolish to reconstruct premises
g) L intends to occupy the premises for own purposes
LL must have been L for 5 years
135
Under what ground of S30 would the tenant be entitled to compensationWhat i
e) Where tenancy was created by a sub tenancy and the building let as a while would produce a higher rent than from separate lettings
f) L intends to demolish to reconstruct premises
g) L intends to occupy the premises for own purposes
LL must have been L for 5 years
135
How is compensation calculated
Under S37
RV multiplier
- If tenant in occupation for 14+years 2 x RV
- Less than 14 years = 1 x RV
Court may also award compensation for damage or loss sustained by T due to Ls misrepresentation or concealment
136
What can the L do if the T doesn't vacate when supposed to
L can double rent under L&T Act 1730
137
What is S29 of the L&T Act 1954
Power of the court to determine new tenancy
If the tenancy is terminated in accordance with Act and application from L or T has been made under S 24(1) the court has the power to grant a new tenancy under S29(1) and may determine:
- The property comprises
- Length of lease
- Rent
- Other terms
- Interim rent
138
What is S32 of the L&T Act 1954
The property comprised
Usually same as in old tenancy
However if L has objected to tenancy as they want to substantially reconstruct court may order a tenancy of part of the property (S31A(1)B))
- so long as T agrees and L can carry out works
139
What is S33 of the L&T Act 1954
The power the court has in granting a term length
Max 15 years (was 14 years before 1st June 2004)
140
What is S34 of the L&T Act 1954
The rent the property might reasonably be expected to let in the open market by a willing lessor, disregarding
- Ts previous occupation
- Any goodwill
- Certain improvements (see below)
- Carried out by T during old tenancy
- Less than 21 years before the application for new tenancy was made
- License to sell intoxicating liquor
141
What is S35 of the L&T Act 1954
The other terms of a new tenancy
- To be agreed between L & T
- Or determined by court
- Court must have regard to terms of old tenancy and other relevant
circumstances
- L may change terms if relevant circumstances are that different
terms are being agreed in the open market
Satisfied by O'May case
142
What is your understanding of the O'May and Others v City of London Real Property Co. Ltd [1982] case
Either party wishing to change terms of the lease will have to satisfy 4 tests (RICF)
(Reason, Impair, Compensation, Fair)?
1) Has the party demanding the change showed good reason?
2) Will the adjustments materially impair the conduct of Ts business
3) Will the party resisting the change be adequately compensated
4) Is the variation fair and reasonable between the parties
143
What is S36 of the L&T Act 1954
Carrying out the order for a new tenancy
- L bound to grant new lease on terms determined by court
- T can apply to have the court order revoked within 14 days, tenancy
will continue for reasonable period for L to re-let
144
What is S38 of the L&T Act 1954
Contracting out
For new tenancy of fixed term L or T may contract out of S24-28
L must serve T a notice under Regulatory Reform (Business Tenancies) (England and Wales) Order 2003
if notice served + 14 days before valid agreement for lease of start date
- T must sign simple declaration
If notice serve less than 14 days
- T must sign a statutory declaration before a solicitor
145
How would you know if time was of the essence
- Lease says so
- Lease makes it clear that time limits are strict
- There are deeming provisions
- T serves notice saying time if of the essence
146
What is a deeming provision
Where lease expressely states
- L to give notice proposing a new rent
- T to serve counter-notice with a counter proposal within a stated
period of time
- If T fails to serve counter-notice in time, T is deemed to have agreed
Ls rent
- L could be deemed to accept Ts counter proposal if lease states so
147
What case law relates to time being of the essence
Burnely & Cheapside cases
148
What matters are to be disregarded in a rent review
- Ts previous occupation
- Any goodwill
- Certain improvements (see below)
- Carried out by T during old tenancy
- Less than 21 years before the application for new tenancy was
made
- License to sell intoxicating liquor
149
What assumptions are usually made in a rent review
- Subject premises is fit for immediate occupation and use
- Market rent will be payable after expiry of any RF period
- No work has been carried out by T which reduced rental value
- If premises have been damaged or destroyed, they are reinstated
- T has complied with covenants in lease
150
What negotiating parameters did you agree with client on the rent review
- To be as accommodating as possible and not to damage L&T
relationships
- To be responsive in communications and seek a swift renewal
151
How long does rent have to be outstanding to enact CRAR
Sum equivalent to 7 days outstanding
152
What RICS guidance is there on service charges
RICS Professional Statement: Service Charges in Commercial Property (2018)
153
What are the mandatory obligations for PM's set out in: Service Charges in Commercial Property (2018)
1) Not to recover more than 100% of the proper actual costs
2) Service charge must be issued annually to tenants
3) A signed statement showing actual expenditure must be issued to
the tenant's annually
4) All interest accrued on SC accounts must be credited to the
account
5) All costs must be transparent
6) The basis of apportionment must be fair and reasonable
7) When issuing statements of account of certifying expenditure PM's
must act in a non-partisan way acting as experts
8) Independent review of the SC should be undertaken
9) Quality service must be produced ensure value for money is
achieved at all times, not simply lowest cost
154
What acts must be considered in an assignment of the lease
* Section 19, landlord and tenant act 1927
* Landlord & Tenant Act 1988
* Landlord & Tenant Covenants act 1995
155
What is a hypothetical term
The length of the terms to be valued at a rent review
Will specified in the lease, if silent assumed to be the unexpired term
156
How does the hypothetical term impact value
If longer than unexpired term = higher rent
If shorter = lower rent
157
What degree of accuracy did you use for your measurements
3% for industrial
1% for office
158
What is a section 146 notice and where is it found
Law and Property Act 1925
LL can serve for breach of covenant, if tenant does not remedy lease can be terminated
159
What is the content of the UK national supplement (2023)
1 x PS
3 x VPS
17 x VPGA
160
What are the three VPS from the UK national supplement (2023)
VPS 1 - Terms of Engagement (Red Book Compliance)
VPS 2 - Terms of Engagement (Supplementary Provisions in Scotland)
VPS 3 - Regulated purpose valuations
161
What is the punishment for a LL breaching MEES
If the breach is for less than 3 months
- Higher of £5k or 10% of the RV
- Fine capped at £50k
If the breach is more than 3 months
- Higher of £10k or 20% of the RV
- Fine capped at £150k
162
What valuations are exempt from the red book
- Agency of brokerage work
- Acting of preparing to act as expert witness
- For statutory functions
- For internal purposes
- For litigation or negotiation
163
Why would a landlord not opt their property for VAT
For marketing and letting purposes
If they are looking to let to companies who are exempt from paying VAT (charities, financial institutions) the VAT element would not be recoverable from the tenant
164
What are the red book basis of value
- Market Rent
- Market Value
- Fair value
- Investment Value
165
What is the purpose of RICS client money protect
RICS scheme to protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client's money, up to the limits and exceptions set out in the scheme rules.
166
What are the penalties for not having appropriate client money protection in place?
Fined up to £30,000 if you do not join a Client money protection scheme (Gov)
Fine up to £5,000 for not displaying certificate (Gov)
167
What is on Workman's Inspection checklist
- Desktop H&S assessment
- PPE (If necessary)
- Diarise inspection with return time
- Notify colleague of return time
- Take fully charged phone
167
What use class was Unit 4 Branbridges?
Classes B1, B2, B8 - Storage and Distribution (of bevs)
168
What are the three common causes of defect
- Water
- Movement
- Deteriorating materials
169
What are common defects of modern industrial buildings
- Roof leaks around roof lights
- Cut edge corrosion
- Blocked valley gutters
170
What are the two parts of a Dunn and Bradsheet rating
Financial Strength Indicator (Letter)
Credit Risk Indicator (1 min - 4 high risk)
170
What are the three tests for insolvency
- Balance Sheet Test
- Cashflow Test
- Legal action test
171
What are common defects for Modern office buildings
- Cavity wall tie failure
- Damp from the roof and ground
- Water damage from burst pipes
- Damaged cladding
172
How long would you hold a lease on your data management systems
7 years after expiry
173
What RICS Guidance relates to Licences to Alter
RICS Guidance Note, Licence for Alterations 2013
174
What are the 3 types of dilaps schedule
Interim +3 years from expiry
Terminal -3 years from expiry
Final - Served after lease expiry when T is out of occupation
175
What are the four types of SC apportionment
1 - Floor Area
2 - Fixed Percentage
3 - Rateable Value
4 - Weighted Floor Area
176
What is your understanding of Jervis v Harris (1996)
Law in respect to LL's right to re-enter the premises to undertake repairs
177
What is the climate change Levy (CCL)
Tax on energy consumption for businesses in the UK, introduced as incentive to reduce energy consumption
178
What are the five levels of BREEAM
- Outstanding
- Excellent
- Very good
- Good
- Pass
179
What is included in an actual rent review memo
- Date of review
- Reference to the lease
- Parties to the lease
- Disclaimer with amended rent
180
What is the fee banding for SDLT
0-150k = 0%
+150-250k = 2%
+250k = 5%
181
Name some basis principles of surveying safely
Personal responsibilities for RICS members and firms
Assessing hazards and risks
Workplace health and safety
Occupational hygiene and health
Visiting premises and sites
Fire safety
Residential property surveying
Procurement and management of contractors
182
Name a key point from surveying safely
Introduced the safe person concept
= each individual assumes individual behavioural responsibility for their own, their colleagues and other H&S while at work
183
When would you be required to report a RIDDOR incident
- Over 7 days incapacitation
- Must be reported to HSE within 15 days of the incident
184
What legislation relates to fire safety
- Fire Safety Regulatory Reform (2005)
- Fire Safety Act (2021)
- Fire Safety Regulations (2022)
185
When is a written H&S policy required and what should it contain
Required for companies of 5+ people
Must contain
- Policy setting out firms H&S commitment
- Details of H&S structure
- Workplace Risk assessment
- Details of planning implementation of H&S policy
186
What are the principles of GDPR
- Information used lawfully, fairly and transparently
- Collected for specified, explicit and legitimate purposes
- Limited to necessity
- Accurate (kept up to date)
- Kept no longer than necessary
- Kept safe
187
Define encryption
The process of encoding information to make it more secure
188
What are the three principles of Real Estate Management (2016)
-Conduct business in an honest fair transparent and professional manner
-Not discriminate in any dealings
-To utmost to avoid COI, and where they arise deal with them openly fairly and promptly
189
What is the punishment for breaching Control of Asbestos Regulation (2012)
- 20k fine
- Up to 12 months imprisonment
More serious cases can be escalated
190
What were the main updates in the latest red book
- Reflect changes in the IVS published by IVSC
- More detail on TOE when applying exception to VPS 1-5
191
What valuations can be exceptions to red book
- Agency of brokerage work
- Acting as expert witness
- Statutory purposes
- Internal purposes
- For litigation or negotiation
192
What are PS1 & PS2
PS1 = Complying with UK law
PS2 = Ethics, competency, objectivity and disclosures
193
Define Investment Value
Value of an asset to the owner or prospective owner for individual investment or operational objectives
194
Define Fair Value
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
195
Give a basic method to Zoning
Use three zones (A,B,C + Remainder)
Zones of 20ft most commons
Then the zone area is halved back (48 sq ft for example)
A = 48sq ft
B = 48 sq ft/2 = 24 sq ft
C= 48 sq ft/4 =12 sq ft)
Remainder = 48 sq ft/8 = 6 sq ft
Then times cumulative sq fr ITZA by MR
196
How would you value a ransom strip
1/3 of increase in value of development land which arises from access via ransom strip
Stokes v Cambridge Corporation [1961]
197
Give a basic method to Profits Valuation
Turnover - less costs & purchases
Then Less
reasonable working expenses and operators remuneration
This is then capitalised at appropriate yield to give value
198
What is the Bank of England Base Rate
5.25%
199
What does the dual rate YP comprise of
- Remunerative rate
- Accumulative rate (adjusted for tax)
200
What are the main three forms of investment
- Gilts
- Equities
- Property
201
What are the disadvantage of property as an investment
- Low liquidity
- High levels of management
- High transfer costs
202
203
What form of arbitration is used for lease renewal disputes
PACT
204
What has RICS published on Complaints Handling
RICS Guidance Note, Complaints Handling (2016)
205
What is a green lease
A lease which contains additional provisions that impose an obligation on the L & T to manage and reduce the environmental impact of a property by way of improvements
206
What does BREEAM Stand for?
Building Research Establishment Environmental Assessment Method
207
What is the spec of an institutional spec industrial asset
- 30 kn/m2 minimum loading capacity
- Steel portal frame construction
- Minimum 8m clear height
- 10% lighting panels in the roof
- 5-10% office space
- Full height electric loading doors
- Site cover of 40%
208
Name some types of industrial building
- Manufacturing
- Cold storage
- Light manufacturing
- Warehouses
- Data Centres
- Showrooms
209
What are defects for modern industrial buildings
- Roof leaks around lights
- Cut edge corrosion
- Blocked valley gutters
210
Name some common defects for modern office buildings
- Cavity wall tie failure
- Damp from roof and ground
- Water ingress
211
Define NPV
Sums of all the discounted cash flows of a project, used to determine viability of an investment
212
What are the three types of obsolescence
- Physical
- Functional
- Economical
213
Describe the construction of 96-98 Kilburn High Road
- Solid brick wall facade
- Timber joist flooring
- Ceiling height of 2.5 m
- Single glazed windows
- No raised floors or ceilings
214
What were the build costs for your development
£650 per m2 for purpose built warehouse
215
What was the interest rate for your residual
9%, standard for development funding
216
What was the contingency
5%
217
What was the site area for the residual
11,875 sq ft
218
What was the floor area of the completed development
4,750 sq ft (IPMS 2)
219
What are RAMS and where is their requirement set out
Risk Assessment Method Statement - In Managing H&S at work regulation (1989)
220
What are the disposal costs in your residual
Letting Fees
Legal Fees
Tax
221
What are the developers costs for your residual
- Build costs
- Demolition
- Consultants fees
- Interest on loans
222
When did IRFS come into effect
1st Jan 2019
223
What use class do Automotive repairs fall in?
B2
224
Give me two example of deleterious materials
- High Aluminia Cement
- Iron Ore
225
What is the net initial yield
Rent expressed as a percentage of the gross acquisition price
226
What is the initial yield
Net income at date of purchase expressed as percentage of purchase price
227
What is the spec of a grade A office
- 2.6m floor to ceiling
- 350mm suspended ceiling void
- 150mm raised floor
- 2.5-3 KN/M2 floor loading with additional 1 KN for partitioning
- Double glazed window
- Air con
- Passenger lift
228
What is a sinking fund
Fund set aside for replacing of wasting asset, e.g. lift
229
What is a reserve fund
Fund formed to meet anticipated future expenditure, e.g. VRF replacement
230
What are sustainable office procedures Workman uses
- Recycling
- Zero waste to landfill
- Cycle to work scheme
231
What is a Part 36 Offer
Under P36 of Civil Procedure Rules 1998
Offer to settle at a lease renewal
232
How long is a part 36 valid
Minimum 21 days, will be stated on offer
233
What must be included in a Calderbank Offer
- Terms on which the party is willing to settle
- “Without prejudice Save as to costs”
- A proposal regarding costs incurred up to the date of the offer
- Time limit for how long the offer is valid for
234
Who can make a Calderbank offer?
Both LL and T
235
What is black mould indicative of
Condensation
236
What is a damp proof course
A physical barrier installed through the structure to prevent rising damp.
Is laid below walls
237
What is the difference between gross and net yield
Gross yield = Rent expressed as a percentage of the purchase price
Net yield = Rent expressed as a percentage of the gross acquisition price (i.e. Including purchasers costs)
238
What are the four requirements of a lease
1) Exclusive Occupation
2) Payment of rent
3) Duration for a specified term
4) If 3+ years, terms must be in writing, signed and registered as deed
239
What defects can be seen in brickwork
- Evidence of water entering brickwork
- Efflorescence = salt reacting with water and leaving white marks
- Spalling = bricks degrading because of heating & cooling of bricks
240
What types of air con are there and what are the advantages / disadvantages
- Variable Air volume = Higher costs but most flexible
- Fan Coil = Lower initial cost but higher operating and maintenance cost
- Variable Refrigerant Volume = Lower capital cost, but higher operating and maintenance cost
241
What would occur after a building has completed construction
Snagging - i.e. inspect building against the plans to check it has been finished correctly. Carried out by a contractor under warranty
242
What legislation relates to the contamination of land
Environmental Protection Act 1990
243
Under what act is it a criminal offence to allow the spread of Japanese Knotweed
Wildlife and Countryside Act 1981
244
Define GIA
The area of a building measured to the internal face of the perimeter walls at each floor area
245
What would you include within a NIA measurement
- Kitchens
- Built in-cupboards
- Areas occupied by perimeter trunking
- Areas occupied by non-structural walls
- Atria with clear height and entrance halls if not expressly included in the communal areas
246
What would you exclude from NIA
- WCs
- Areas under 1.5m in height
- Plant and lift room
- Stairwells
- Cleaner cupboards
- Space rendered unusable (gap of 25cm or less)
247
How do you calculate WAULT
Rental income * lease expiration time / total rent income
= Number of years
248
What did the RICS publish in relation to valuation and the use of comparable evidence
RICS Guidance Note, Comparable Evidence in Real Estate Valuation (2019)
249
Define equivalent yield
Weighted average yield between the initial and reversionary yield
250
What would happen if a tenant didn’t respond to a S25 notice
At the expiration of the notice the tenant would lose their right to renewal, and the landlord would have the right to regain possession.
251
What types of asbestos survey are there
- Managment
- Identifies location of asbestos and how to manage it, no samples taken
- Demolition
- Required when property is undergoing work, samples of material suspected to contain asbestos are taken and analysed
252
According to the Control of Asbestos Regulations (2012), what are the five steps for the duty holder in managing asbestos
CRRAR (Contain, Risk, Register, Available, Review)
1) Assess whether premises CONTAINS asbestos
2) Assess RISK of it
3) Create an Asbestos REGISTER
4) Make register AVAILABLE
5) REVIEW the register regularly
253
What are the future MEES dates
1st April 2027 - Minimum C
1st April 2030 - Minimum B
254
Name some purposes of inspection
- Valuation
- Property Management
- Agency
255
Residual method
Gross Development Value from MR capitalised into perp at initial yield
- Less developers costs & profit
= Net Development Value
- *PV for a year @ interest rate
= GRV
- Less agent fees, legal fees & SDLT
= Site Value
256
What would the options be if there was a disagreement with the rent review
- Real the lease to determine the method of determination within RR clause
- Could be agreed between parties or by president of RICS (cost of £425)
- Independent Expert of Arbitrator
257
What is corporate social responsibility
Corporate Social Responsibility (CSR) is commonly defined as a business model in which companies integrate social and environmental concerns in their business operations and plans.
258
Give an example of a time you have communicated effectively
When liaising with agents to obtain comparable.
Information was free of charge, agents not obliged to give out.
259
What lease length is required for IRFS to apply
At least 12 months
260
Give examples of information barriers
- Physically separating two parties
- Encrypting files
- Safe channels of communication
261
What is an SAR
Subject access request, demand that individual is given all the information a company holds on them
262
What does PS1 relate to in the red book
Details when a valuation needs to be red book compliant.
263
Define an assumption in the context of a valuation
An assumption is made where it is reasonable for the valuer to accept that something is true without the need for specific investigation or verification.
264
What are Workman's business aims and objectives
- Achieve sustainable and profitable growth
- Make positive impacts on communities
- Maintain culture where people thrive and reach full
potential
265
Expand on the disability access audit you have carried out
Copthall
- Identified a stairlift called be installed in the lobby up to
the first floor
- Picked up with client and had it installed via non-rec funds
266
What is the occupiers liability act 1957
Duty of care by the occupiers to any lawful visitors.
267
What is the occupiers liability act 1984
Duty of care by the occupiers to any trespassers
268
When is duty owed under the occupiers liability act 1984
When I am
- Aware of the danger on site
- Believe that a person on site may be at risk
- These risks must be managed to remove liability
269
What are the changes in the UK National Supplement (2023)
- To reflect changes in valuation standards & legislation
- New governance standards for regulated purpose
valuations
270
What must be included in a S146 Notice
- Specifying the breach
- Requirement for tenant to remedy the breach
- A reasonable to time to remedy the breach, length on case by case basis
Usually served by solicitors
271
What can a tenant do if served with a S146 notice
Remedy the breach within a "reasonable time"
Pay reasonable compensation to the satisfaction of the L
Apply for relief under Leasehold Property Repairs Act 1938 S1
Above only applies for leases of 7+ years with 3 years to run
272
What is the tenant's procedure if applying for relief in response to a S146
- Serve counter notice within 28 days under
Leasehold property repairs act 1938
- This prevents L from being able to take
forfeiture proceedings until leave from the
courts is secured
273
When would the court give leave for a L to forfeit under the 1938 Leasehold property repairs act
Prove one or more of the following grounds apply
1) immediate remedying of the breach is necessary to prevent substantial damage or its value has already been substantially diminished;
2) The immediate remedying of the breach is necessary to comply with an enactment or by-law or similar matter;
3) The tenant is not occupying the whole of the premises affected and the immediate remedying of the breach is necessary in the interests of the other occupier(s);
4) The cost of immediately remedying the breach is small relative to the likely cost occasioned by postponement;
5) There are special circumstances which make the giving of leave just and equitable.
274
How would a tenant register their improvements on a leasehold property
Follow procedure in S18 1927 L&T Act
1) Tenant serve a notice on L before works start
with details and plans
2) L has three months to object or offer to do
the work themselves in return for a
reasonable increase in rent
3) If L does not object or offer to do works, T can
proceed and complete works within an agreed
time period n
275
What happens if a L objects to T's improvements being registered under 1927 act
Courts will determine matter
276
What happens at the end of a tenancy if any improvements are registered in accordance with the 1927 act
Compensation will be payable to the T
277
How is compensation calculated under 1927 act
Shall not exceed the smaller of:
- the net addition to the value of the property as
a whole which is a direct result of the
improvement, OR
- the reasonable cost of carrying out the
improvement at the end of the lease less the
cost of putting the improvement into a
reasonable state of repair
278
What is the interim rent assessed as in a protected lease
Rent of the new tenancy unless L or T show otherwise
- Different valuation dates
- Different lease terms between tenancies
279
What is a deeming provision
Where lease states the process for a rent review is:
- L to give notice proposing new rent
- T to serve counter notice with counter
proposal within a stated period of time
- If T fails to serve counter notice in time, T is
DEEMED to have agreed L's rent
280
What happens if a T rejects a L's Calderbank offer, and the arbitrator awards a rent equal/higher to the proposed rent
The arbitrator can award the fees to the T from the date the offer could have reasonably been accepted
281
When was the L&T Act 1954 last amended
1st June 2004
282
During an inspection what would cause an unsafe atmosphere in a building
- Confined spaces with lack of oxygen
- Mould or fungus
- Rotting vegetation
- Pigeon droppings
283
Can the professional statement on Service charges override a lease
No
284
Name another insavive species (apart from Japanese knotweed)
Himalayan Balsam
285
What is the definition of IPMS 3.2?
The Floor Area available on an exclusive basis to an occupier measured internally to any Notional Boundaries, the Internal Dominant Face, Demising Walls and including any External Floor Areas, Sheltered Areas and Secondary Areas.
286
287
What is the reversionary yield
Market rent expressed as percentage of purchase price
288
How is VAT dealt with in your rent demands
As application for payment, not a rent demand
289
Why does your client opt for an application for payment rather than invoice
VAT, as VAT only becomes due on application for payment when payment is made
With invoice tenant VAT is due when the invoice is raised, therefore LL will be liable if T withholds funds
290
What action do you take to limit risks in a vacant building
- Drain down water
- Vacant inspections every two weeks
- Additional security if high risk
291
What types of yield are used on Co-Star
Net Initial Yield
292
List S32 - 35 of L&T 1954
S32 - Property Comprised
S33- Term (Max 15 years)
S34 - Rent
S35 - Other terms
293
What case law relates to break clauses
Osbourne Assets v Britianna Life Ltd (1997)
T did not comply with conditions of lease (three coats of paint), therefore break held ineffective
294
What would you do if a tenant becomes insolvent
- Register claim for arrears
- Inform insurers and client
- Put tenant on rent stop
- Ensure property is secure (if vacant)
- Do not accept keys back as it could constitute surrender
295
What is triangular cracking indicative of
Lintel failure
296
What is horizontal cracking indicative of
Cavity wall tie failure
297
Define NIA
Useable area within a building measured to the internal face of a perimeter wall
298
What needs to be shown on company accounts
Governed by companies act 2006
- Cover page
- Contents page
- Directors report
- Accoutants report
- P&L account
- Balance sheet
- Notes
299
What is R22 Refridgerant
Gas used in A/C systems
Banned for new equipment in 2004 due to Ozone depleting properties
From 2015 use and replacement of new low temp refrigerant is illegal
Being phases out
300
When did the UK adopt IRFS
31st December 2020
301
What did IRFS replace
International Accounting Standards (IAC)
302
Give me an example of an environmental management system
ISO14001 - International agreed standard that sets out requirements for an environmental management system
303
Define contamination
Making something inpure by contact with something unclean or harmful
304
What are carbon budgets
5 yearly budgets set by the government, restrict the amount on greenhouse gas the UK can release over 5 year period
Current one 2023-2027
305
Give examples of sustainable design features
- Good insulation
- Sustainable construction materials
- Renewable energy source
306
When do you need to display an EPC
- Floor area over 500 m2
- Frequently visited by the public
307
Name some asbestos containing materials
- Insulation lagging
- Insulation boards
- Roof and wall cladding
308
What is an inherent defect
A defect in the design or material which has always been present
309
What is a latent defect
Fault in the property which could not have been discovered through inspection
310
What is a sensitivity analysis
- Adjusting variables in a calculation to see how it would react in a different circumstances
- E.g. in RLV
311
What is the basic method for a DCF
1) Estimate cash flow (income less expenditure)
2) Estimate exit value at end of holding period
3) Select discount rate
4) Discount cash flow at discount rate
5) Value = sum of cash flow (NPV)
312
What is the discount rate for a DCF
An expression of the time value of the money in the DCF
313
What is a competent landlord
Defined in section 44 of L&T Act 1954
= The person whom notice must be served upon or serve notice
Either freeholder or superior tenant with unexpired terms of over 14 months
314
What would you advise the landlord would do if the unit is over-rented and the tenant hasn't served any notice
No action, allow the tenant to stay in occupation under S24
315
What is the difference between IPMS 3 Office and NIA
In IPMS 3
- Perimeter measurement taken to internal dominant face
- Areas under 1.5m in height measured but stated separately
- All columns included
- Covered galleries for exclusive use of one tenant included but stated separately
316
Define shop depth
Measured from the national window display to rear of retail area
317
What is a section 18 valuation
Valuation Under 1927 L&T Act to define the amount of damages that a landlord is able to recover for a breach of the tenants repairing covenant
318
What companies are exempt from GDPR
Organisations with fewer than 250 employees
319
320
What is the structure of the red book
1) Introduction
2) Glossary
3) Professional Standards
4) VPS
5) VPGA
6) IVS
321
What are PS1 & PS2
PS1 - Compliancee with standards where a written valuation is required
PS2 - Ethics, Competency, Objectivity & Disclosures
322
What does VPGA stand for
Valuation Practice Guidance - Applications
323
Is a SC audit mandatory
Only if stated in lease
324
What is Biodiversity Net Gain
Mandatory under Town and County Planning Act 1990 (As inserted by Environmental Act 2021)
States developers must deliver a BNG of 10%, i.e. development results in better quality natural habitat than before
325
Can you use NIA in SC budgets despite IPMS being mandatory?
- IPMS not mandatory for SC apportionments, client can opt for NIA
326
What has the RICS published on Sustainability
RICS Guidance Note - "Sustainability and ESG Guidance in Commercial Property Valuation and Strategic Advice" (2021)
327
How would you ascertain a yield if there were no comps
Use BOE base rate or gilts then add degree of risk
- from building age etc
Would give ARY
328
Define bribery in your own words
Offering, giving or receiving an item/action of value in order to influence the action of another person
329
What % of emissions is the built environment responsible for?
c.40%
330
What has the RICS written to demonstrate their commitment to sustainability
RICS Futures Report (2020)
Highlights importance of industry adapting to climate change
E.g. Using drones & building roads from plastic bags
331
What are the four common forms of foundation
1) Trench
- Used for resi
2) Raft
- Slab that spreads load over whole site
- For lightweight structures and soft soil
3) Piled
- Long and slender concrete cylinders
- Used for high loads
4) Pad
- Slab foundation system
- Under individual columns so load is spread
evenly
332
What updates have been made to the TCP 1987 Act
Introduction of E class in September 2020
Used to provide flexibility to change premises use without need for planning permission
Amalgamates
- A1, A2, A3, B1, D1, D2
333
What is the formula for YP for a term
1-yield
334
Define nominal yield
Assumes yield is paid in arrears
335
Define true yield
Assumes rent is paid in advance
336
What can a developer receiver if developing on a contaminated site? (Thus removes contamination)
Land remediation relief
- Form of tax relief that gives developer up to 150%
corporate tax relief
337
What are the pros and cons of independent expert determination
Pros
- Expert decision based on own option and advice
- Time and cost effective
Cons
- No statutory back up
- Limited right of appeal
338
How do you avoid conflicts in the first place
- Clear drafted lease
- Proactive risk analysis
- Good record keeping
- Following RICS Rules of conduct
339
What are the pros and cons of arbitration
Pros
- Fast, cost effective and confidential
- Have specialised knowledge of subject area
Cons
- Limited right of appeal
- Parties bear their own costs
340
What are the four types of discrimination
- Direct
- Indirect
- Victimisation
- Harassment
341
What does the equality act mean for landlords
LL may not discriminate against a person on basis of protected characteristic
342
Tell me something about the companies act
Replaced Companies Act 1985
Governs format of company accounts
is the primary source of UK company law
343
Why was IRFS introduced
Global consistency is financial reporting
344
How is gross profit calculated
Turnover - Cost of sales
345
What are reasonable grounds for refusing consent for an assignment
- Character of proposed assignee
- Weak covenant strength
- Impacting trade of other businesses (i.e. Retail
Park)
346
What an in-court PACT
Used for unopposed new tenancy where an application to court to fix new terms has already been made.
347
What is an out-of-court PACT
Where no application to court has been made
Agreement to postpone application until out-of-court PACT has been resolved
348
What does without prejudice save as to costs mean
Without prejudice applies until court delivers judgement
Court will then award costs
349
What RICS guidance is there on dilaps
Guidance Note, RICS Dilapidations in England and Wales (2016)
350
What is the timeframe to responding to a dilaps claim
56 days
