Inspection Flashcards
“I understand my personal and corporate obligations for health and safety management. Whilst at work and on inspections, I adhere to the RICS guidance note, ‘Surveying Safely, 2nd Edition’ (November 2018), alongside my firm’s health and safety procedures.
I understand the tools required for inspection and how to use a checklist. I accurately record building and site characteristics and know the impact this can have on valuation and property management. I understand the importance of a schedule of condition and dilapidations schedules”
“Unit 3 Prospect Road
I inspected an industrial unit for valuation purposes. When I arrived on site, I located the manager who instructed me on the site safety rules. I recorded the condition and specification of the property including road surface condition, eaves height and roller shutter specification. I also took photographic evidence of the internal and external condition to support my report.”
“3 The Square
While inspecting an office unit on a secondary street for a rent review, I noted that the building had steps into and out of the property and that the WC and kitchenette were at basement level with no lift. The windows of the property were also in disrepair with peeling paint and evidence of rot. I made notes on my inspection checklist with photographs. The rent review assumes the property to be ‘in repair’ and is on full repairing and insuring terms. I compiled a full report highlighting my concerns with supporting photographs.”
“F&B Retail Property – Winchester
I inspected an F&B retail property for estate management purposes. I noted that the property on the first floor was experiencing water ingress and the tenant informed me that they had been experiencing problems for some time. I noted that the plaster was damaged, internal decoration was stained and the skirting boards were rotting. I recorded my observations both written and photographically. I referred to the lease terms to ascertain the repairing obligations, which were full repairing and insuring with a Jervis v Harris clause. I advised my client on the condition of the property and the repair clause implications.”
“Garages, Winchester
While inspecting a block of garages, I noted a large crack in the wall and a pool of water on the floor. I reported these issues to the client and I advised that the property needed further investigation by a structural surveyor. The client acted on my advice and I was further instructed to arrange the repairs identified. Through my advice the client was able to ensure the structural integrity of the building and prevent further water ingress from the guttering being in disrepair.”
At Unit 3 Prospect Road, what site safety rules did you need to adhere to?
At Unit 3 prospect road I was inducted onto the site, I was provided with PPE, personal protective equipment. High visibility vest and my foot ware was checked. I was shown the traffic management plan and where it was safe to walk through the site. I was told where to go in the event of an emergency.
What was the road surface material and condition?
The surface material was tarmac smooth surface it good condition with not potholes or surface damage.
How did your Inspection notes assist your valuation?
inspections for valuation purposes require the valuer to consider not only the physical nature of the property but its macro and micro location.
My inspection notes detailed the eaves height, and roller shutter specification. I also took measurements of the building and noted the yard space. I took photos of the building and noted its condition.
How did the condition of the property Impact the valuation?
It impacted my comparable evidence. as this property was in a good condition with good eaves height for storage and roller shutter height, I reflected this in my valuation comparable.
What Impact did the accessibility Issues with 3 The Square have on the rent review?
It makes an impact on the market demand for this type of property and I used it to compare the comparable office transactions. for example there are refurbished office units above the IVY rented to Southampton University. they have installed lift access making the property more desirable and valuable to a tenant than 3 the square who’s facilities are on basement level with no lift access. Under the equality act 2010 you have to use reasonable actions to make buildings accessible to all. in this case of a grade 2 office building there it was not be reasonable to make this building accessible.
What evidence of rot did you find on the windows?
The window paint had peeled, the wood itself was fibered and flaking. it was loose and crumbling to the touch.
Surely If the rent review clause assumed the property to be In repair, this Information was not necessary to document for your rent review?
Yes the property was assumed to be in repair, and the lease covenants had been complied with.
I also act as the property asset manager, The condition of the property related to the repairing covenant of the lease and remedies for the repairs. Responsibility and the bigger picture for the management.
How did you use the Information gathered during your Inspection for the rent review?
I used the information gathered to assist me in compiling my comparable evidence. it was used to assess the tenants responsibility for repair and compliance with the lease covenants.
Explain a factor identified during an inspection which impacted upon value.
in the case of 3 the square, the facilities in the basement area, not accessible. In the case of prospect road, the site overage impacted value and building specification.
What Is an F&B retail property?
food and beverage
When was your last Inspection of this property?
163/164 High Street
This property is a new asset to my portfolio. this was my first inspection and tenant introduction.
Why had the water Ingress Issue not been reported and resolved In a timely manner?
the water ingress was found to be from multiple sources of poor maintenance. loose tiles, lead flashing which needed attention and blocked guttering. To access the roof of the 3 story property would require scaffolding at a cost of £13k. The tenant had not put this as a prioirty and with further costs of work had been avoiding making repairs.
What relevance did the Jervis v Harris clause have on the advice you provided?
A Lease which contains a properly drafted Jervis v Harris clause, grants the Landlord a right to first serve notice on a Tenant, specifying any breaches of covenants relating to the condition of a property.
If the Tenant then fails to proceed diligently with remedying the breaches and/or to remedy the breaches identified in the notice within a specified period, (as set out in the Jervis v Harris clause – usually within 2-3 months), the clause grants a right for the Landlord to enter the property to carry out the works and to then recover the costs in doing so from the tenant, as a ‘debt’.
One of the key advantages of using a Jervis v Harris clause is it is likely to result in the necessary works being carried out. Especially if the Tenant is properly informed and seeks professional advice, meaning the property does not fall into further dis-repair during the remainder of the term and which can result in more costly and difficult repairs being needed in the future.
Furthermore, the Landlord is able to recover their reasonable costs incurred in undertaking the works from the Tenant as a ‘debt’, rather than as a damages claim. Consequently, the costs incurred are not subject to Section 18 (1) of Landlord and Tenant Act 1927, which limits any damages claim due to a Tenants failure to maintain and repair a property in accordance with their contractual obligations, to the adverse effect on the properties freehold value.
Therefore, all a Landlord will need to prove is they have acted reasonably, undertaken the works, incurred costs in doing so and are entitled to recover the costs in doing so as a ‘debt’ rather ‘damages’. Meaning they are then entitled to recover the actual costs incurred as a simple debt due by the tenant, which is far more straightforward to pursue compared to a damages claim.
How did you advise your client should proceed?
On the 1st September 2016 the RICS published the updated Dilapidations Guidance note, now in its 7th Edition, with increased emphasis and detail on the application and use of Diminution Valuations and their role in the dilapidations process.
With this in mind, many landlords should now be considering their options more than ever in respect of how to avoid the statutory cap imposed by Section 18(1) of the Landlord and Tenant Act 1927 and the subsequent Diminution Valuation, as used by many tenants as a defence in terminal schedules of dilapidations and subsequent claims for damages.
In order for landlords to mitigate this defence commonly used by tenants, most commercial leases contain what is commonly known as a ‘Jervis V Harris’ clause which sets out a staged pathway for breaches of tenant’s covenants to be remedied.
The stages are typically set out as follows:
The landlord is permitted to enter the premises to inspect the state of repair.
The tenant is to carry out work required in accordance with the landlords Jervis V Harris notice within a set time frame.
Failing this, to allow the landlord to enter the premises to carry out the works stipulated within the notice.
To pay the landlord the cost of the works as a debt due upon completion.
The most significant benefit of issuing a Jervis v Harris schedule is that if the dilapidations works are undertaken by the landlord in accordance with the notice, the cost of the works is recoverable as a debt rather than that of damages which means that no statutory limitation can be claimed by the tenant under Section 18(1). In addition, this also ensures that the property is put into good order, which in turn will reduce the likelihood of a significant dilapidations dispute arising at lease expiry and will give the landlord the best possible chance of re-letting to a new tenant in the future.
Whilst there can be legal issues in respect of gaining access to the property to carry out the works during a tenant’s occupation and the fact that landlord’s will have to fund the cost of the works upfront, the Jervis V Harris approach will no doubt appeal to landlords looking to ensure their assets are maintained in good order where they are currently being neglected and their asset value is maximised.
How did the Issue get resolved?
The tenant made the repairs within the required time frame
For the Winchester garages, what did you consider a large crack to be?
I suspected that The large crack was on the wall was due to a vehicle reversing into it. this was confirmed by cctv footage.
Why did you advise a Structural Engineer be appointed?
because it beyond my expertise.
What repairs did they Identify that you helped resolve?
they reported that the crack did not affect the structural integrity of the building and was still safe to use.