Case Study Flashcards

Question

Additional security for the client

Answer 1

1. Rent Deposit - despite my recommendation to have a deposit equivalent to a few months' rent, the client did not think it necessary. - if there was a deposit then there would need to be a separate legally documented rent deposit deed

Answer 2

* Did not have suitable/appropriate social media channels i.e., insta/Facebook/tiktok available. * Instead used My Barking Riverside portal – much more appropriate to the target market

Answer 3

* assign’ (transfer) the lease to another party who will take over occupation of the property and responsibility for the lease obligations including paying the rent to the landlord * Benefits: Protects tenant and landlord and someone else could fulfill lease obligations * Risks: remain responsible for obligations and liabilities incurred before the assignment and a landlord could sue the original tenant for back rent if the new tenant failed to pay

Answer 4

* Why comp? appropriate to assess the market rent * Difficult to find comparables – used local agents and online platforms – used adjacent units and then wider surrounding area. - Unique nature of the newly developed estate * Consulted The hierarchy of evidence - Category B - could use historically transacted data i.e. Unit 2 & 4

Answer 5

* Good comparable factor to assess the popularity of the location – locational indicator - Spent time in both locations -Units on Barking High Street had high levels of footfall - particularity commuters - Subject Unit - Only 8:30-9am and 4-5pm owing to the school

Answer 6

* Adjacent unit comps, newly developed estate, limited comps in immediate local area * Looked in wider surrounding area, still struggled to find suitable comps – less appropriate but useful benchmark/indication

Answer 7

2019 - units 2 &4 benefited from pre-pandemic market conditions. Market changed since then - lease terms i.e. short leases for retail were more prominent thus making the long lease objective tricky. shift to online shopping Val date Feb 2022 - letting completed in May 2023 - bc i used immediate comp the chances of the rental value changing were slim. I informed the client and they were happy to proceed without redoing the valuation. --> same factors at play such as reduced comps

Answer 8

* financial stability and reliability of a tenant to fulfill their lease obligations.

Answer 9

An open market rent review sets the new rent based on what could currently be achieved on the open market if the property were let - it's fair to the tenant An open market review means that the rent is adjusted (usually upwards only) to reflect the rent the landlord could achieve on a letting in the open market.

Answer 10

ITZA - in terms of zone A. A valuation technique, Not a method of valuation Rationale - the rental value of the unit reduces away from the street - the halving back priniciples with 6.1 metes or 20 feet zones I did not use zoning owing to the small size of the retail unit - if used the majority of the retail unit would be zone A. Also there was no natural zoning i.e. steps For example: Zone A = A/1 Zone B = A/2, i.e. Zone B is half of Zone A Zone C = A/4, i.e. Zone C is a quarter of Zone A (or half of Zone B) Zone D (or remainder) = A/8, i.e. Zone D is 1/8

Answer 11

Where a shop occupying a corner site has display windows to two streets this is known as return frontage from which the property may derive additional value. Can add value to shop i.e. tenant can display more items, can attract passers-by to come in, increased prominence.

Answer 12

Mutual break option at the 5th year - subject to 6 months written notice. If the tenant does not operate the break then they would be entitled to a further 3 months rent free.

Answer 13

Tandem were a sole agent THREE Types of agency: 1. Sole agent - only one agent 2. Joint agent - two or more joint agents sharing a fee on a pre-agreed basis 3. Multiple agency - any number of agents but only the successful agent gets a fee

Answer 14

Risks: 1. The time taken to search and secure appropriate tenant - i.e. took over a year from instruction to offering the unit to the interested party - relieving the client of void costs i.e. service charge 2. Poss achieving poor cov tenant 3. Poss not achieving a long lease 4. Niche target market - demographic of the estate - lower average income.

Answer 15

Because of market conditions, post Covid, low tenant confidence, change in lease terms i.e. shorter leases. Less transactions in the surrounding area. Local agent told me that such a specific target market, it would be unlikely to achieve a lease longer than 5 years - bc of the nature of the estate, demo of area, market conditions, poss limitations of unit i.e. can't cook.

Answer 16

Phase 1 (where unit is located), phase 2 being building, phase 3 to be built - due for completion 2038 Lack of local amenities BLR wants a sense of community, collaboration, engagement with locals - place making scheme. Unique nature of the newly developed estate / low overall footfall during day time hours.

Answer 17

Attract passers by - specifically targeted marketing to meet client's objectives

Answer 18

A Board in the window with QR code which if scanned would take the ind to relevant contact details in which to enquirer My Barking Riverside Resident's Portal No to other agents as this was a sole agency project and did not want to utilse their platforms in case attracted ppl outside the target market Sales particulars - (yes they were dated)

Answer 19

Rent free period - 6 months rent free for fitting out. If tenant does not exercise break then they will be entitled to another 3 months rent free. Tenant only break? Ended up with a mutual break to benefit both parties and provide flexibility. Assignment clause and Underletting/Subletting

Answer 20

leases should allow tenants to assign/sublet with landlord's consent and not to be unreasonably with held or delayed. Gives tenant flexibility