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

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

Flashcards in The underlying principles of property law, planning and other relevant regulations or controls and their impact on property values Deck (11)
Loading flashcards...
1

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

Expressly reflected in the RESIDUAL method

2

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

Stamp Duty Land Tax - at the prevailing rate

Agent's fees - say 1% of the purchase price + VAT

Solicitor's fees - say 0.5% of the purchase price + VAT

3

What are the current SDLT brackets?

(REVIEW BEFORE INTERVIEW)

4

What planning / legal considerations should a valuation consider?

Flooding

Valuation of Ransom strips

Zoning (ITZA)

Party Walls

Rights of Light

Surrenders / renewals

5

How should flooding be considered in a valuation?

Valuation report should include advice on risk of flooding as this may detrimentally impact on marketability and valuation of property

The Environment Agency website can be used to check flooding risk

6

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

This is a piece of land which controls access to another piece of land

Lands Tribunal evidence suggests value of a ransom strip could be 15%-50% of development value unlocked by inclusion of the ransom strip within proposed development

The Lands Tribunal assesses each case on its own particular facts

The key case is Stokes v Cambridge (1969) when a value of one third of the uplift in development site value was awarded to the owner of the ransom strip

7

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

Remember HUT when talking about zoning:
- Halving back principle
- U - A zone A rate is a Unit of comparison
- T - Zoning is a valuation Technique NOT a method

Used for comparison of retail properties to create unit of comparison for different sized buildings

Areas ‘zoned’ on ground floor and value attributed to each zone is ‘halved back’ from front to rear

Rationale - rental value of property reduces away from the street

The halving back principle with 6.1m (20ft) zones

Treatment of return frontages - usually 10% uplift but depends on comparable evidence and shoppers' footfall

8

What is natural zoning?

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

9

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

A wall is a ‘party wall’ if it stands astride the boundary of land belonging to two / more different land owners

There are Chartered Surveyors who specialise in party wall disputes

Party Wall Act 1996 provides a framework for resolving party wall disputes, boundary walls and excavations near neighbouring buildings

Act provides a building owner, who wishes to carry out various sorts of work to an existing party wall, with additional rights going beyond ordinary common law rights

10

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

Right to light of a building lasts for 20 years uninterrupted enjoyment of light without consent of a
third party

If a right to light is infringed, an injunction is granted /damages awarded

A recent case = HKRUK 11(CHC) Ltd (a subsidiary of Highcross) v Heaney (2011)

Outcome left Highcross with a remedial works bill £1m-£2.5m and a mandatory injunction to reduce scale of extended Toronto Square scheme in Leeds where
2 new floors = added to existing office building

11

How should surrenders / renewals be considered in a valuation?

When landlord /tenant wants to surrender the existing lease and agree to grant a new lease (usually longer /on different lease terms)

Calculation of a premium needed to reflect change in value of the leasehold interest

Need to value the before and after leasehold interests

Need to understand the valuation of premiums