Case Study Flashcards
How did you record your special assumption and where did you record it?
What would you have done differently if your check had revealed a
conflict?
Either declined the job, or made all parties aware of the conflict and proceeded if they were happy for me to do so.
Did you consider why the rent reviews hadn’t been activated?
The first because there might not have been evidence for an increase and the second because it was over 2 years away.
What was the cause of the damp penetration?
Was not possible to be certain due to no building survey being provided, but it is possible it could have been caused vegetation to the box gutters as advised by building surveying colleagues.
Do you believe you were under an obligation to report the breach of
planning to the Local Authority? IF so or not, then why?
Is the assumption that the property has all necessary consents actually a
special assumption? If not, why not?
The planning consent and actual situation are very different, did you also
check whether building control certificates had been obtained? If not, why
not?
What Insurance Is available for breaches of planning consent on sale? What are the drawbacks of such policies?
The lack of EPCs for the flats Is a major risk, how did you raise this?
I notified my client of the legal obligation regarding EPCs.
What recommendations did you make to your client on the EPC point?
I strongly recommended that EPCs are commisoned for all of the flats.
Did you consider the risk of the rent falling at renewal? The general tone
of retail rents appears less than the passing rent.
I did not because my opinion of the Market Rent was that the property was rack-rented.
Did you consider the use of a Discounted Cashflow rather than an ARY?
What are the pros and cons of a DCF?
Why did you adopt 8.75% when better pitches were at 8.5%
Whilst better properties were sold at close to 8.5%, these were 46/47 East Street and 30-31 Western Road which were larger lot sizes compared with the subject. The comparables which are smaller lot sizes were lower than 8%, so 8.75% is a fair adjustment compared to those.
Wouldn’t a yield of 9% or more been appropriate?
Whilst the subject is worse than the comparables, it is a small lot size and would attract more investors, so 9% would have been too harsh in my opinion and my 8.75% already reflected the property being worse than the comparables.
