Common Questions

Question 1

What is Interim Rent?

Answer 1

Temporary rent payable after lease expiry under LTA 1954 until renewal or withdrawal.

Set at market rate, but can be adjusted.

Question 2

What is Equivalent Yield?

Answer 2

Blended yield considering initial & reversionary income.

Weighted average return, discounting future cash flows.

Question 3

What is the Sportelli Rate?

Answer 3

Risk-free discount rate used in leasehold enfranchisement (Sportelli v Cadogan, 2008).

Based on long-term gilt yields + risk premium.

Question 4

What is Alternative Dispute Resolution (ADR)?

Answer 4

Avoids court litigation – faster & cost-effective.

Methods: 1. Mediation – Facilitated negotiation. 2. Arbitration – Legally binding. 3. Independent Expert – Determination by a specialist. 4. Adjudication – Interim resolution, common in construction.

Question 5

What are the 5 RICS Rules of Conduct?

Answer 5

1. Integrity – Be honest & transparent. 2. High Standard of Service – Provide competent advice. 3. Promote Trust – Maintain client & public confidence. 4. Respect – Treat all fairly. 5. Take Responsibility – Be accountable.

Question 6

Independent Expert vs. Arbitrator

Answer 6

Criteria: Independent Expert uses expertise, Arbitrator acts like a judge. Binding? Yes (unless agreed otherwise) for Independent Expert, Yes (Arbitration Act 1996) for Arbitrator. Process: Informal for Independent Expert, Formal for Arbitrator. Evidence: Can use own knowledge for Independent Expert, Only considers submissions for Arbitrator. Cost/Time: Faster & cheaper for Independent Expert, More expensive/time-consuming for Arbitrator.

Question 7

What is RICS Hierarchy of Evidence?

Answer 7

1. Direct lease/sale of subject (Best). 2. Recent comparable transactions. 3. Published data (e.g. market reports). 4. Asking rents/offers. 5. Historic/distressed sales (Least reliable).

Question 8

What is Hart v Large (2021)?

Answer 8

Surveyor failed to highlight major defects in a HomeBuyer Report.

Court ruled surveyors must flag risks & advise specialist reports. Raised duty of care for surveyors.

Question 9

What is RAAC (Reinforced Autoclaved Aerated Concrete)?

Answer 9

Lightweight concrete (1950s–1990s), prone to moisture absorption & failure.

High-risk in schools & public buildings.

Question 10

What is Internally Dominant Face?

Answer 10

Measurement principle (IPMS) – largest surface area determines floor space.

Used in office & commercial property measurements.

Question 11

What is All-Risks Yield (ARY)?

Answer 11

Investment yield reflecting all risks (voids, lease terms, market fluctuations).

Formula: ARY = (Rent / Capital Value) × 100. Used to assess investment risk.