Case Study Flashcards
Under what legislation determines a ground for a challenge? Name 3 other grounds
The non domestic rating (alterations and appeals) regulations (2018)
deletion, merger, mcc
Definition of Rateable Value?
LGFA 1988 sh6
Difference between AVD, effective date and material day.
AVD - the date the economical factors are considered, effectively the valuation date.
Effective date - is the date of the change on the rating list
Material day - the day the physical / factual details are considered
For a Private sector rating surveyor what should be included within the TOE and what is the fee basis?
Rating Consultancy code of practice (2017)
1. identify the client
2. identify property and extent of inspections
3. liability of appeal fees
Fee basis - no set basis but must be agreed in TOE
Client? SOS and minister
Department for Levelling Up, Housing and Communities
SOS - Michael Gove
Tell me about the local market at the time
Prime rents were at around £1400/m2 ITZA. Behind only London in the south.
250,000 footfall a week
13mil a year
30min catchment of 450,000
84min tourist dwell time
70 units
How did you know it was a 1960’s construction? Common defects?
Visually the brick clad told me it was post war, i later checked the exact date using previous plans and VO records. Common defects of this type of construction include honeycombing and brick deterioration.
How was it constructed?
Appeared to be slab and beam whereby structural beams rest on the foundations with concrete slabs acting as the ceiling and floor of the second storey.
Original lease and rent
2009 at £24,000pa.
Can a former IP submit a challenge
If an alteration was made effective during the time they were an IP.
What is a conflict, different types?
Where acting in ones interest could impact your ability to act in another parties interest.
Party conflict
Personal conflict
Confidential information conflict
Management
gain confirmed consent
record keeping
inform senior colleague and parties at earliest chance
Guidance - RICS conflicts of interest 1st edition 2018
Valid challenge?
if they qualified as IP
correct grounds
evidence supporting grounds
Desk based Checks conducted?
Search for evidence
Hardship / small proposer - would impact internal timelines
Purpose of Zoning?
The theory is that front of the shop is the most valuable therefore the floor area is analysed as such halving in value at 6.1m increments.
Zones can be different depending on locality for example some London authorities adopt 4m zones.
Timeline for Appeal?
Within 4 months of Challenge decision or 18 months after challenge submission if VOA not responded.
Cost of Appeal
£150 small proposer £300 all others - refunded if successful
Mode and category of Subject
Shop premises - A1 Shop or E
Tell me about Suri v Masters (1982)
Lands tribunal considered the most important factor in valuing Kiosks was its location rather than size, regarding frontage as more important than depth and size, commenting on the very narrow frontage of the appeal hereditament (0.7m).
Tell me about the Kiosk market in the locality
I identified two further Kiosk assessments in the locality, both of which were much smaller units with one located at a train station entrance therefore I concluded these did not offer comparability to the subject.
What is meant by the term standard shop rate
This refers to the adopted value per sqm in the locality for shop units, this is the wording used within the Suri v Masters case.
Are you aware of the Arma Hotels case?
Yes, this involved a hotel lacking rental and tone evidence whereby the Receipts and expenditure method was adopted.
Did you consider any case law when looking at mode and category?
Fir Mill Ltd v Royston (1960) - use limb of rebus sic stantibus - Held that a cotton mill could be valued as a factory and not restricted to a cotton mill - a factory is a factory but not any particular kind of factory.
Scottish and Newcastle v Williams 2000:
Case determined mode or category of occupation has two distinct limbs:
- Use – must be valued in same use
- Physical – only minor alterations
Case law regarding settlement evidence
Obrien v Harwood - unchallenged does not establish tone, good number of settlements does
Is Rating meant to be uniform? Case law?
No we are looking to arrive at a fair and reasonable RV in line with the statutory definition.
Ladies’ Hosiery v West Middlesex Assoc- Correctness must not be sacrificed to uniformity
How did you identify the non structural wall?
Knock test to see if hollow
checked upper floor to see if it was present in the same position which would suggest it is structural
could check previous plans
If structural would need to record the area differently for rating assessment and remove the thickness.
EPC? Letting Rules?
Subject CEPC was C. From April 2018 cant let below E. From April 2023 requirement to attain E or above.
What safety measures did you consider?
RICS Surveying Safely (2019)
travel route
lone working policy
condition of property (PPE)
special risks
Did you conduct a risk assessment?
Yes involved identification of risks, impacts and if any further actions required
What did you measure to internally?
I measured from the building line through non structural walls to the end of the occupied area and internal finish of external walls
Typical Inclusions and Exclusions of NIA
+ The usable area within a building measured to the face of the internal finish of perimeter or party walls
- common areas of permanent essential nature
- Structural walls
- staff toilets
- headroom -1.5m
Why not IPMS? If IPMS applied?
Agreed with client in SLA for 2017 list to adopt COMP.
IPMS 3 Retail is used for measuring the occupation of Floor Area(s) in exclusive use. Measure to IDF. Usually more inclusions therefore resulting in larger area. Not yet adopted by RICS.
Guidance for rental adjustment?
RICS Comparable evidence valuing real estate (2019)
VOA Rating Manual
How would you adjust for a 3 month RFP?
If incentive, the rent will need to be adjusted on the basis that for the first 3 month £0 rent is received, then the rent pa is amortised across the remaining lease term by a PV and YP multiplier to arrive at an AAE.
if for fit out it is ignored. If at renewal assumed not to be fitout.
What is the yellowing on LED lights?
Could be a sign of mould but most common cause is general ware and tare, they are still likely to have a significant life span and do not present a safety risk.
Damp in non-rating valuation?
I was assess the extent to the best of my abilities and based on this i may make an adjustment while also considering comparables. I would also advise remediation from a H&S perspective
How would you assess if repair is uneconomic?
Monk v Newbigin (2015) - the economic question
- would a reasonable landlord consider the works to be uneconomic
a comparison of costs and potential income in the future
What is meant by good terms?
Terms that align with the definition of Rateable Value
How do you know there was a rising market?
I consulted the market knowledge report assembled by a colleague via CoStar
Can you typically change the terms on assignment?
No, however sometimes a premium or reverse premium is paid on assignment so that may have needed to be considered.
Alienation clause?
Allows Landlord to restrict, consent, prevent assignment of the lease. Permission must be granted by the LL to do so. Does not need reason to refuse. Can impose conditions such as attaining a guarantor.
Data Management, what legislation did you follow?
Data Protection Act 2018 - I kept the data safe by storing in a secure file storage system. Correspondences were uploaded to a shared online which both myself and the IPs could access.
The 5 Rules and how applied?
I showed the agent respect in allowing for a discussion of all evidence and promoted inclusion and teamworking in seeking approval of my valuation.
I provided a diligent service in responding to the agent in timely manner and dealing with the case swiftly.
I took responsibility to investigate the subjects lease to attain the correct information
How did you ensure good client care?
I made sure I remained within the clients and internal timescales.
I issued correspondences to both the agent and the ratepayer so they were both fully informed
On inspection I identified myself with ID to the individual meeting me.
Any sustainability issues?
no issues, the subject has a high CEPC for the locality. I ensured sustainable practice by completing a second inspection on the day. As well as using online communication where necessary.
Did you encounter any inclusivity issues?
No, though a small shop it offered disabled access, with low counters.
I further insured inclusivity in all my communications with relevant parties, explaining processes where necessary.
What RICS guidance did you use throughout the case and why?
COMP - agreed with client to use for 2017 rating list
RICS Surveying Safely - provides guidance on safety provisions within workplace and inspections
RICS comparable evidence in real estate valuations - alongside case law advises weighting of evidence
Rules of Conduct
Global Standards - not a red book val
Comp 2 – much bigger – did you consider quantum or any kind of reverse quantum for the smaller units? Was there any pattern in the area?
I considered if there could be a quantum or rev quantum allowance present in the locality but generally the evidence didnt suggest this was the case, the main driver of value appeared to be the proximity to the city center.
How did you know the property was concrete frame construction and also how did you know it had been refurbished?
externally i noticed columns at even spacing so checked inside the next door property and saw what appeared to be structural pillars consistent with concrete frame - i later confirmed with online records
i learnt it was refurbished through discussions with the agent
If the case had not been agreed what would have been the next steps the parties/VO could have taken?
Appeal to the valuation tribunal can cost £150-£300, then upper tribunal, court of appeal, supreme court
Had all your comps been refurbished/were they of similar construction
Comps 1 + 2 were on the same parade so was therefore constructed and re-clad at the same time.
What do you think is the future for Town Centre shops in the digital age?
though e-commerce has taken alot of footfall from town centres there is a still an element of social need which brings people to town centres, this is highlighted by alot of retail premises being repurposed and reoccupied by leisure and activity facilities.
Gravity in old debenams
How would your communication style have altered had you been negotiating with an unrepresented ratepayer rather than an agent?
I would avoid the use of rating / valuation jargon and be open to explaining fully any rating principles necessary - inspection
Is that plant and machinery in the photos?
No, they are machines used by the occupier and are not rateable in line with the Plant and Machinery Regulations 2000.
They do not come under the four classes set out in the Regs: Power, Services, infrastructure, structures
When is P+M not rateable? Any case law?
When it is essential to “manufacturing operations or trade processes”.
Iceland Foods v Berry (2018)
Can you tell me about the case you referenced regarding Kiosks?
Suri v Masters - related to a Kiosk in London. Lands tribunal said that the value derives mostly from the properties location rather than size commenting on a small frontage of 0.7m therefore zoning the property may cause the assessment to be undervalued.
i believed this didnt apply to the subject as it was on the edge of prime location so didnt reflect the same foot in value as say a train station would and that it has a similar frontage and depth to other shops on the parade.
When can a surveyor act as a EW and Advocate
- Lower Tribunals
- Cost permits
- justice is accessible
- must distinguish which role you are acting as at each point
What is the court system for Rating and conditions?
VT - £150 cost disagree with challenge
UT - settles matters of valuation and fact
COA - appeals in a point of law made to COA
SC - appeals in a point of law of public importance
How did you arrive at £1,200/m2 ITZA.
I applied the most weight to the subject and COMP 1 but had regard to the entire basket of evidence and felt that £1,200 was most reasonable
Why did you did you make that decision for Issue 1 when it would not impact the valuation?
I was determining the mode and category and decided it was a shop so i reflected how a shop premises would be approached in the open market for analysis and valuation to give me a common basis of comparison.
Where would you find the grounds for proposal?
Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009
Where would you find details on validity of the challenge?
Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009
REG 6
How did you carry out a risk assessment and what were your findings?
IWERRA
The risk assessment prior to the case was a consideration of RV change had the agents propasal well founded - income implications to client and stakeholder - low risk.
Did you consider the previous rating list at all?
Yes, but i considered most the evidence available to me and my statutory duty contained in s 41 (4) of LGFA 1988 to not be constricted by the approach of previous lists.
Did the unchallenged assessments not help establish a tone?
No, a good number of settlements would,
in line with Harwood v Obrien or Futures London v Stratford
