Case Study Flashcards
How did you check that you were competent to undertake the instruction?
Competence was verified by ensuring I had the relevant experience, sufficient knowledge, and technical skills to deliver the advice to a satisfactory standard. I made sure I had support from MRICS / competent colleagues. Additionally, I reviewed my past experience with similar instructions and confirmed that professional indemnity insurance covered the scope of work.
[1]
How might a conflict have arisen in this case?
A conflict could have arisen if I had a prior relationship with either the landlord or tenant, or if I had a financial interest in the property. It’s crucial to identify and manage any actual or potential conflicts of interest to maintain impartiality.
[11]
What was the Landlord’s response to the serving of the break notice in the first place?
The landlord was surprised on the basis I then broached regear conversations. It could have gone two ways in that the Landlord could see the clients intentions to go if not getting a fair deal, but simultaneously reduced the bargaining power of impending break. Landlords often seek to retain tenants to ensure continuous rental income so it put a timeline on the Landlord to agreeing a good deal.
[4] [5]
What did you exclude from your NIA?
Exclusions from the Net Internal Area (NIA) typically include structural elements, stairwells, communal areas, and service areas such as toilets and plant rooms.
[24]
Talk through the zoning technique.
The zoning technique involves dividing a retail space into zones, typically of 20 feet depth, with Zone A being the most valuable. Each subsequent zone (B, C, etc.) is valued at a decreasing rate, often half the value of the previous zone. This method helps in comparing rents of shops of different sizes and layouts.
[14]
Given the size of the property did you think that zoning was appropriate in this case?
Yes, zoning was appropriate as it provided a standardized method to value different sections of the property, ensuring a fair comparison with other similar properties.
What does ‘security of tenure’ mean?
Security of tenure refers to the statutory right of a tenant to renew their lease at the end of the contractual term, provided certain conditions are met. This right is granted under the Landlord and Tenant Act 1954.
[42]
Define ‘market rent’ – where would you find this definition?
Market rent is the estimated amount for which a property should lease on the valuation date between a willing lessor and lessee, in an arm’s length transaction, after proper marketing and where the parties acted knowledgeably and without compulsion. This definition can be found in the RICS Valuation – Global Standards (Red Book).
[31]
What makes a ‘good’ comparable?
A good comparable is a property that is similar in location, size, condition, and use to the subject property. It should have been sold or leased recently to reflect current market conditions.
[26]
Talk through the hierarchy of evidence.
The hierarchy of evidence includes: Category A: Direct transactional evidence from recent sales or leases. Category B: General market data such as indices and historic evidence. Category C: Other sources like transactional evidence from different property types or locations.
[21]
What is the difference between a headline rent and a net effective rent?
Headline rent is the rent payable after any rent-free periods or concessions have expired. Net effective rent accounts for these incentives, spreading the total cost over the lease term to reflect the actual financial commitment.
[35] [38]
The comps that you refer to ‘COMP1’ etc – where are they and what made them relevant? COMP2 for example is on a business park
COMP1 and COMP2 are located in similar market areas and have comparable property characteristics such as size, condition, and use. COMP2, being on a business park, was relevant due to its proximity and similar tenant profile.
How do you calculate the net effective rent?
Net effective rent is calculated by taking the total rent payable over the lease term, subtracting any rent-free periods or incentives, and then dividing by the lease term to get an average annual rent.
[38]
Is the serving of a break notice a statutory notice?
Serving a break notice is not typically a statutory notice but a contractual right outlined in the lease agreement. However, it must comply with the terms specified in the lease to be valid.
[5]
If the client was to instigate the break – how would they do this?
The client would need to serve a written notice to the landlord within the timeframe specified in the lease, ensuring all conditions for the break are met, such as being up-to-date with rent payments and vacating the property by the break date.
[5]
