CASE STUDY Flashcards
What is a proposal to alter the rating list?
A proposal is submitted by the ratepayer, or their representative when they believe their business rates are incorrect. The proposal is submitted within the CCA process.
Can you explain the CCA procedure?
The ratepayer/representative begins by submitting a check proposal, which deals with the factual matters regarding the hereditament, such as size, split or mergers, or deletion. If the check team have disagreed with the changes, the ratepayer/representative can submit a challenge proposal which deals with more complex, valuation specific issues such as the rate, MCC or area disputes. Should the ratepayer/representative disagree with the VOAs decision, they can then appeal the decision before the VT.
Can you explain the key dates and deadlines for the CCA process?
The ratepayer/representative can make a proposal against the 2017 Rating List at any point, beginning with the check stage.
They can progress to challenge within 4 months of the VOAs check decision or 16 months for MCC proposals, or where the VOA has not made a decision within 12 months.
They can progress to the appeal stage within 4 months of the challenge decision or where the VOA has not responded to the challenge within 18 months.
What is the Rateable Value definition? Where would you find this?
The definition can be found in the Local Government Finance Act 1988, Schedule 6, paragraph 2.
“The Rateable Value of a non-domestic hereditament, none of which consists of domestic property and none of which is exempt from local non-domestic rating, shall be taken to be an amount equal to the rent at which is estimated the hereditament might reasonably be expected to let from year to year on 3 assumptions.”
What are the 3 assumptions for the definition of Rateable Value?
1) the TENANCY BEGINS on the day by reference to which the determination is to be made. (VD)
2) immediately before the tenancy begins the hereditament is in a state of REASONABLE REPAIR but excluding from this assumption any repairs which a reasonable landlord would consider uneconomic. (GOOD REPAIR)
3) the tenant undertakes to pay all usual tenant rates and taxes and to bear the cost of the repairs and insurance and other expenses. (FRI)
What is the main legislation in relation to the CCA process?
Local Government Finance Act 19888 and The Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009 and its amendments.
What is the case law relevant to your case study?
Lotus and Delta v Culverwell (VO) & Leicester City Council (1976 RA 141)
How did you check for COI?
RICS Conflict of Interest, 2017.
Consider the steps.
I checked the property address and the ratepayer to ensure that I had no professional or personal dealings.
Can you give me an example of a COI?
A COI could be carrying out valuation or providing valuation advice for both the seller and buyer of the same property, as my advice would be conflicting due to each parties interest.
What guidance would you refer to for COI?
RICS Conflict of Interest, Professional Statement, March 2017 (1st Ed)
What legislation relates to the validity of a CCA proposal?
The Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations, 2009 - part 2.
Can you give me an example of a possible grounds of proposal?
Where the rateable value shown in the list is inaccurate by reason of a MCC which occurred on or after the rating list was compiled.
Where the RV was inaccurate on the day the list was compiled.
Can you give me an example of a valid proposal?
Where the proposer is the occupier and ratepayer or their representative, or have a valid interest in the property.
Should be made on one of the grounds of proposal as set out in Regulation 4.
Should contain the basic details, such as name and address of proposer, the relevant authority, proposed RV and supporting evidence.
Was the IP a small proposer?
No it was a representative.
What would you consider a small proposer? How would it affect the way you approached this project?
If the IP was a small proposer I would have used plain English, detailed explanation of the process and providing additional guidance.
Is your project governed by the Global Standards i.e. Red Book?
No, this was a statutory valuation for rating purposes.
What would you do if you could not settle a Challenge case within the statutory deadlines?
If the valuation couldn’t be agreed, I would have issued a decision notice that sets out my reasons, allowing the customer to consider if they wish to move to the next stage.
How did you determine you were competent to deal with this instruction/case?
I determined I was competent to deal with this instruction/case because I have extensive experience handling retail rating proposals in this area.
How did you apply the Conflicts of Interest, 1st Edition 2017 guidance?
I carried out a COI
I ensured that any potential conflicts were disclosed early and openly
If a conflict was identified, I would have withdrawn or managed the conflict
I would document all disclosures and decisions to provide a clear record of compliance
Who was your most important stakeholder?
Department for Levelling Up, Housing and Communities (DLUHC).
Now replaced by the Ministry of Housing, Communities and Local Government (MHCLG).
Who is the minister for your client department? Has the DLUHC changed?
Michael Grove.
Yes, it has been renamed to the Ministry of Housing, Communities & Local Government (MHCLG) and the minister is Angela Rayner.
Are you aware of any guidance regarding rating consultancy?
The RICS Rating Consultancy Code of Practice, 5th edition, April 2024
What would some typical ToE be for a rating instruction? How would you determine your fee basis?
As a minimum the TOE should include:
a. Identification of the client.
b. Confirmation that the service relates only to a single specified general rating revaluation unless clearly and unambiguously stated otherwise.
c. Confirmation of the extent to which the service includes assessment alterations during the revaluation period and outline of the service to be provided.
d. Identification of the property/properties in reflect of which the service is to be provided together with the extent to which the property/properties will be inspected.
e. Details of how the fees will be calculated and when they are due.
f. Details of the handling of any rate refunds if these are two be payable to the rating consultant.
RICS, IRRV and RSA do not prescribe scales of fees and they have to be agreed with the
client for each instruction.
If you were the agent, other than this compiled list Challenge, how would you mitigate your client’s rating liability?
I would check for property reliefs/exemptions such as small business rate relief, charitable rate relief, empty property relief.
There were no changes proposed at Check but how would you determine if the unit of hereditament is correct?
All facts were agreed at Check.
What would you do if an ATM at the front of the unit has been installed?
Cardtronics UK Ltd v Sykes (2020):
The UK Supreme Court ruled that ATMs within stores should not be separate hereditaments. The retailers had “paramount control” over the ATM spaces.
How did you determine the age of the subject property? Typical construction and features of a 1940’s property such as this?
- Our internal records.
- Cross checking with 3rd party sources like EG or CoStar.
- You could have also checked historic websites and local records.
- In addition to the findings of your desk-based review/inspection i.e.
a. the cavity wall construction
b. the stretcher bond brick work of the next-door bank
c. Some of the features likes the hipped roof.
What type of brick construction? How did you determine this?
Stretcher bond brick work, determined by looking at the construction of next-door.
Does it have an EPC rating? What is the building’s planning history?
The EPC rating could not be found – but could play it safe at C. No planning history.
What is next door? What is above the subject hereditament?
Neighbouring units are both retail units, above the subject hereditament is accommodation.
How would you treat this if it were a customer toilet?
I would have excluded customer toilets from NIA.
What are typical defects of this type of property from this period?
Dampness, poor insulation, dated wiring and plumbing, structural movement.
Is this only for loading for customers? Is there no rear loading for the subject? Any affect on the rent?
Yes, there was loading at the front of the property.
How does this enhance accessibility for all? Think about Inclusive Environments. Maybe NPPF - Section 8?
Inclusive design – S8 of the National Planning Policy Framework (NPPF).
Entrance – ensuring it is accessible to all, incl those with disabilities.
Internal layout – enough space for wheelchairs or mobility aids/
Toilets – accessible for disabled users, following the Equality Act 2010 guidelines.
Signage and lighting – clear, visible signage and good lighting.
Are any of these anchor tenants? Do they have any effect on the level or direction of footfall?
Yes, M&S foodhall. These do have an effect, they increased the level of the footfall past the subject unit.
How did you determine the level of activity? Footfall figures? Vibrant and active compared to what? Also, when? Do you mean currently or at the material day?
I inspected the local area and observed the level of footfall, noting that it was vibrant and active. I also noted that there were no vacant units.
What were the lease details for the previous occupier?
The previous occupier let on a 15 year term from 1st March 2006.
- How did you conduct your desk-based review? (aside from reviewing the previous plans and inspection notes).
Location, aspect, business types, public transport, amenities.
What does the RICS COMP state regarding zoning?
RICS Code of Measuring Practice, 6th
Zoning – the use of zones when assessing the values of shops is a valuation, not measurement, technique.
Consequently, it is not part of this code.
Can you explain zoning? Did you apply it to your measurement or valuation? Why did you use a zoned approach? What zoning pattern? Why? Are you aware of any other zoning patterns?
Zoning is a method of measuring retail premises to calculate and compare their value – it is a form of analysis. The theory is that the area closest to the shop window is most valuable, with the value decreasing with distance away from the frontage.
The zoning pattern used was the standard 6.1m depth zoning for ZA, ZB and remainder.
Can be 4.3m or 9.43m in London.
Did you consider any other approach other than zoning?
Overall approach, although the zoning approach was consistent with the market.
Did the agent’s approach to zoning impact the “measurements” i.e. the dimensions? Or just the calculation of the zoned areas but using the same measurements?
The agents approach to zoning did not impact the dimensions, just the calculation of the zoned areas.
What range of evidence? How wide does this range need to be?
K Shoe Shops v Hardy
Locality taken to mean area within sufficient evidence to produce a reasonably expected rent.
I identified evidence of retail properties on the same street or within close proximity.
When was the property last inspected?
December 2010
Had there been any changes to the property since the last inspection? Did you review the planning history?
Yes, I reviewed the planning history and there had not been any changes to the property since the last inspection, but the last inspection did not record any structural walls, therefore I needed to inspect to confirm.
As the survey was not disputed on the “no-change Check”, were there any settlement in the previous list? If there was an agreement in the 2010 list and there had been no changes to the subject property, would an inspection be required? Wouldn’t the survey be sufficient to produce a professionally adequate valuation ion line with VPS 2?
There had been no settlement in the previous list.
What health and safety did you consider when inspecting? Later on, you state you considered Surveying Safely, how or which part?
VOA lone worker policy.
RICS Surveying Safely Principles for Property Professionals, 2nd edition 2019,
Section 3 – assessing hazards and risks.
Section 6 – Visiting premises or sites.
Did you consider any PPE was required? How often do you check your PPE?
No, PPE was not required. Should be checked regularly, before each use, and weekly and monthly.
Did you consider any ESG factors during your inspection? RICS Guidance on this?
Sustainability and ESG in commercial property valuation and strategic advice, 3rd Ed, December 2021:
Environmental: energy efficiency, waste management, carbon emissions, and environmental impact of the building.
Social: impact on the community, accessibility for people with disabilities, health and safety standards, and the local employment opportunities.
Governance: Compliance with laws and regulations, transparency in operational practices, and ethical considerations.
Did you consider any diversity and inclusion issues on your inspection?
Equality Act 2010, during the inspection I would assess that the property provides adequate access, such as ramps, wide doorways, and accessible washrooms.
Can you describe how you inspected externally?
- Method of construction
- Repair and condition - describe from roof downwards
- Car parking, access, loading arrangements
- Defects - structural movement
- Check site boundaries -using OS map / title plan
- Age the building - ask client, research date of planning consent, Grade Listing at Historic England, Land Registry, local historic records, architectural style, or the architects certificate of practical completion.
What did you note during your inspection of the locality?
Accessibility to transport, commercial activity, infrastructure, neighbouring properties, local amenities.
I note there is no AC for this retail unit, if there was, how would you treat this?
For retail properties, AC is based on £7 sqm addition.
What value significant factors did you record? How did you ensure you did not miss any relevant details?
Condition of the building, location, accessibility, carparking.
I took photographs and made detailed notes.
What measuring tools did you use? Pros and cons of these tools? Did you calibrate your laser? How often do you do this?
Disto laser- pro: quick and accurate for measuring long distances, cons: inaccurate in sunlight and on tiles and requires regular calibration.
Why did you measure to NIA and not IPMS? How would you measurements been different if you had measured to IPMS?
NIA is commonly used for measuring retail, if I had measured to IPMS, the measurements would have been different because IPMS includes GIA.
Talk me through how you measured to NIA. Where did you measure from? What did you include/exclude?
I measured from the inner face of the external walls. I included all usable floor space and excluded common areas, internal structural walls, WC facilities, plant rooms, areas with a ceiling height below 1.5m.
How did you determine the wall in question was non-load bearing?
Thickness of the wall, position within the building and whether it aligns with structural columns, tapping the wall, non-load-bearing walls produce a hollow sound.
- You have determined the wall is non-load bearing but why value do we value rebus? Can you not accept the agent’s contention if this could be converted into a structural wall? Supporting case law? Would not installing a support beam just be a minor amendment?
- Consider the facts on MD.
- Always value Rebus at the MD. The property should reflect its current state and use, not its potential alternative uses and can only consider minor changes.
- For the first issue, I would have regard to Scottish v Newcastle and the first limb- the physical limb.
I’d there was a structural wall before the MD then u would have regard to it and zoning would stop as a structural wall would be more than a minor change.
If it was after the MD, then it would have been outside the scope of the CHG and u would have amended by VON.
Your inspection confirmed there was no change in areas or the survey. If there were changes to the survey, how would you treat this with regard to the previous list?
I would have issued a VON.
