General

Question 1

Tell me how you applied the 5 Global Ethical Standards in your advice to client in this case study?

Answer 1

I provided a High Standard of Service to my client by acting within my competence to achieve an outcome that correlated with my clients corporate objectives.

I was also respectful of my client and built a trustworthy rapport by regularly inspecting the property and providing them with updates on progress on a regular basis.

I refused the offer of hospitality from Hayley’s who invited me out for a Chinese once the project was complete and informed my client of this offer to ensure I acted with Integrity.

Question 2

Describe how you measured the property?

Answer 2

I measured the property to gross internal area in accordance with RICS Code of Measuring Practice 6th Edition using a laser

I measured to the internal surface area of the perimeter walls and included all internal walls, columns and standard facilities. I excluded the perimeter wall thickness and external areas.

Question 3

What is the eaves height?

Answer 3

The eaves height was 12 foot.

Question 4

When was it built?

Answer 4

1960’s

Question 5

Describe the specification of this unit?

Answer 5

1. 3 phase electrical supply
2. Eaves height go 12 ft.
3. Air con in the offices
4. Space heater in main warehouse area
5. Floor loading of 15 KN per tonne

Question 6

Tell me about the unique characteristics of trading estates?

Answer 6

They offer free parking and convenience for customers.

They are generally located next to good transport links and historically they were mainly for big ticket items such as curry’s or DFS.

However there is now an interesting trend where there is a more diverse offering for retail, leisure and food which makes trading estates a shopping destination.

Question 7

What is the planning use class?

Answer 7

B1, B2 and B8

Question 8

Are there any changes to the use classes?

Answer 8

Yes, there are 3 new use classes

1. Use class E - general business use (industrial, shops, gyms)
2. Use Class F1 - Educational facilities
3. Use Class F2 - Community assets

Question 9

Is there a trade counter? Why is this important?

Answer 9

No there isn’t.

For occupiers they haven’t faced the same threat to E-Commerce as the traditional retailers.

For investors and landlords, there is a supply and demand imbalance with little construction to address the issue, which is providing upward pressure on rents and therefore driving investor demand.

Question 10

Describe King’s Lynn in socio-economic terms?

Answer 10

King’s Lynn is a small market town with a population of circa 44,000 and has a significantly larger catchment area.

It has a large employment offering in manufacturing and engineering and historically has a low unemployment rate.

There are two retail parks on the edge of the town centre, whilst the town centre itself has the Vancouver Shopping Centre where H&M have just opened, however the high street shops are mainly dominated by budget shops and there are relatively few national retailers.

King’s Lynn benefits from a university hospital and has variety of primary and secondary schools, however higher education is limited to the College of West Anglia.

Question 11

What is the Rateable Value?

Answer 11

The rateable value for the building as a whole was £72,500, however after the property was separated the combined Rateable Value amounted to £80,250

Question 12

What is the significance of an EPC rating of D?

Answer 12

A D rating is okay because it falls within the minimum rating of the Minimum Energy Efficiency Regulations.

Question 13

What were the conditions attached to the break clause?

Answer 13

To pay the principal rent only.

Question 14

How did you look at the accounts to determine the accuracy of the tenants claim?

Answer 14

The tenant provided profit and loss statements for the past 3 years, which showed their profit had diminished year on year from 2x the annual rent to less than 1x the annual rent.

Question 15

Describe the alienation clause and the impact on rental level?

Answer 15

The lease permitted alienation subject to landlord’s consent and therefore became a fully qualified covenant by virtue of S19 of the Landlord and Tenant Act 1927.

If the lease prohibited alienation, the lack of flexibility for the tenant would likely result in a lower rent.

Question 16

How was the proposed sub lease to be contracted out?

Answer 16

There are two ways.

1. Serve a 14 day health warning notice on the tenant notifying the consequences of entering into a “contracted out” lease. After 14 days have passed the tenant will sign a simply declaration to confirm he agrees to gave the lease contracted out.
2. If the landlord and tenant do not want to wait 14 days, the tenant can sign a statutory declaration and have it witnessed by an independent solicitor.

Question 17

What impact would the construction of the proposed dividing wall have on your client if the property was sublet?

Answer 17

If it negatively impacted the rent and capital value, the reinstatement at the end of the term would be limited to the diminution in value of the reinstated property and the altered property.

Question 18

Why is a surrender and renewal better than a sub-let?

Answer 18

It allowed my client to extend the term of the lease and provided them with an opportunity to renegotiate the terms.

Question 19

Tell me about S123 of the Local Government Act 1972?

Answer 19

S123 of the Local Government act essential requires the local authority to achieve best consideration when disposing their assets, either freehold or leasehold.

Question 20

What in a word is your client’s primary objective

Answer 20

My client has a corporate objective to maximise income from income generating assets to assist in providing core council services.

Question 21

Tell me how you explained the 21 year rule to your client in this context?

Answer 21

I advised my client that the works were subject to the 21 year rule because they had been consented to by my client, and the purpose of the legislation was to avoid the tenant paying twice for works through the initial expenditure for the works and the increased rent.

Question 22

Why was a rent saving of £20,000 your advised incentive to close the deal?

Answer 22

The market typically allow for a 3 month rent free period to, so this was offered to incentivise the tenant to agree to a 10 year lease with no break, and the remainder was offered as a contribution towards the cost of the constructing new toilets within the unit.

Question 23

What was the site coverage?

Answer 23

34%

Question 24

What is driving changes in the industrial sector?

Answer 24

E-Commerce and technology have driven demand for warehouse space as consumer spending habits switch to online, and this has only been exacerbated by Covid-19.

Question 25

What does without prejudice mean?

Answer 25

It essentially means without loss of existing rights.

So my client could consider the subletting at their discretion without loss of their existing contractual right for subletting to be prohibited in the lease.

Question 26

What are the risks associated with void property?

Answer 26

1. Void costs (rates, utilities liability)
2. Security - risk of vandalism
3. Repair liability
4. Poor prospects of reletting

Question 27

What is insolvency?

Answer 27

It relates to where the company has more liabilities than assets and are unable to pay their debts.

Question 28

What is the purpose of building regulations?

Answer 28

To ensure the property is safe, has adequate welfare facilities and is environmentally friendly.

Question 29

Why was your client in a strong negotiating position?

Answer 29

Havenbooks required the surrender and renewal to happen in order for them to make a financial saving.