Case Study Flashcards
Please describe the layout of your industrial property?
What is the user class of your case study?
User class was B1C - light industrial use within a residential area
Now superseded by Class E as of 1st sept 2020
I note your tenant was contracted out of the Landlord and tenant act 1954. How was this done?
- give up security of tenure
- 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.
Difference between GIA and IMPS2
Internal balconies - GIA included/IMPS2 stated separately
External balconies - GIA excluded/IMPS2 stated separately
Accessible rooftop terraces - GIA excluded/IMPS2 stated separately
You did a credit check to determine tenants covenant strength, how?
Dunn and Bradstreet
- Financial strength (A-E)
- risk indicator (1-5)
How to inspect in accordance with surveying safely ?
-Carry out a risk assessment before visiting
-Check in with RFM
-Let the tenant aware if you are needing demise access
-Take charged phone, put in outlook diary
-Let colleagues know what time to come back
-sign in and out of site
You looked on companies house to review tenants financial accounts. What governs the format the company accounts?
The Companies Act 2006
What is included in company accounts, as laid out in the Companies Act 2006?
- cover page
- information and contents
- Directors report
- Accountants report
- profit and loss account (income statement)
- balance sheet
Why did you measure on GIA and not IPMS?
As a chartered surveyor I’d advise and encourage to use IPMS however client wanted GIA.
Wasn’t enough comparable data in GIA
If you have been doing a lease renewal for some time, and gone beyond contractual lease expiry date. What would you do?
Call for interim rent - S24A
Calculated based on market rent
Aim of LL and Tenant Act 1988?
S1 states consent must be provided reasonable timeframe (no delays)
Aim of LL and T Act 1927?
S18 - Limits the amount of damages a LL is able to recover for breach of T repairing covenants
S19 - States consent must not be unreasonably withheld
9 Mandatory requirements in SC Professional Statement?
Walk me through how you would do a rent review?
- Receive client instructions
- Check competent
- Check if any Conflicts of interest
- Agree a few
- Check RR clause and see if there is a LTA in place.
- Inspect and measure.
- Collect comparable and make recommendation to the client
assumptions?
- property is fit for use
-property is vacant - tenant has not been in breach of lease (obligations)
- the lease term
Disregards?
- any goodwill
- tenants occupation
- some improvements
Difference between balance sheet and income statement?
Landlord and tenant covenant act 1995?
Authorised guarantee agreement (AGA)
What is the data protection act 2018 and the 7 principles of it?
What does GDPR stand for and what are the 8 rights under it?
General Data Protection Regulation
- right to information
- right to access
- right to rectification
- right to erasure
- right for restrict processing
- right to data portability
- right to object
- right to automated decision making
What and when would you use the investment method?
Market rent (net of outgoings) x years purchased
= market value
When you have an income stream to value
How would you value a reversionary investment?
Term and reversion (under rented)
Term
Get your net income (annual rent) and capitalise this until the end of the lease with a lower yield (risk is lower as it’s below market rent)
Reversion
Get your market rent and capitalise this at a higher yield (reflect the risk) into perpetuity. You then discount it back to PV£1 as there is time left on term. Market rent is not coming in until then.
What are exceptions to the red book?
Internal purposes - for client to know market value of property
Agency - advertise price if getting interest up it, if not lower it
Statutory functions - where the law tells us what to do (lease renewals, rating, compulsory purchases)
Acting as a expert witness - arbitrator or expert would tell you what to do
Workman’s management agreement?
What determines how much you inspect your properties?
-client requirements
-workman requirements
-insurer requirements (if vacant)
What are the purposes of inspection?
Valuation
Purchase or sale (agency)
Property management (breach of lease)
Rent is inclusive how do you CRAR/apportion it?
Deduct the rates and service charge
It will be an approx figure
Net effective rent?
Rent that incorporates rental concessions
Rent including rent free period
Break notice?
- 6 months before the break date
- must be in writing to LL address
- have to give vacant possession
