Matt - Important things to remember Flashcards
What are the six propositions detailed by the Lands Tribunal within the Lotus & Delta decision?
- The subject property rent should be taken as a starting point
- The closer the rent is agreed to the hypothetical assumption, the more weight can be attached
- The rents of other comparable properties should be considered
- Similar comparable property settlements should also be considered
- An opinion of value can now be formed considering all the evidence
- With a lack of other comparable evidence or settlements, it would be difficult to discard the subject rent
What is the hierarchy of rental evidence?
- New letting
- Lease renewal
- Rent review
- Independent expert
- Opinion
- Arbitration / court decisions
- Asking rents
What are the four offences found within the Bribery Act 2010?
1) Offering, promising or giving a bribe to another person.
2) Requesting, agreeing to receive or accepting a bribe from another person.
3) Bribing a foreign public official.
4) Failing to prevent bribery.
What are the 6 principles under the Bribery Act 2010?
- Proportionality
- Top level commitment
- Risk assessment
- Due diligence
- Communication
- Monitoring and review
Can you tell me about the minimum levels of indemnity insurance?
If a firms turnover is £100,000 or less, then the minimum level of indemnity insurance is £250,000.
If a firms turnover is between £100,001 and £200,000, then the minimum level of indemnity insurance is £500,000.
If a firms turnover is £200,001 or more then the minimum level of indemnity insurance is £1,000,000.
What are the 9 protected characteristics as detailed within the Equality Act 2010?
- Age
- Sex
- Race
- Disability
- Religion or belief
- Marriage or civil partnership
- Pregnancy and maternity
- Sexual orientation
- Gender reassignment
What does VPS 2 and VPGA 8 state about how to approach an inspection?
- Capture the locality
- Capture external areas
- Capture internal details
- Do not visit unannounced
- Lone working policy
What does VPS 2 and VPGA 8 state about value significant factors to capture at inspection?
- Location
- Dimensions
- Access
- Age and construction
- Accommodation and parking
- Installations and amenities
- Quality
- Planning use class
- Hazards - natural and non natural
- Sustainability
What are some common building defects?
- Rot
- Damp
- Movement
- Subsidence
- Decay
- Infestation
What are the steps you would take to carrying out a comparable method valuation?
- Look at the subject property
- Search for comparables
- Adjust and analyse comparables
- Value the subject property
- Stand back and look
What are the steps you would take to carrying out a depreciated replacement cost valuation?
If I’m trying to establish a capital value:
- Establish the replacement cost of a modern equivalent
- Depreciate for age and obsolescence
- Add site/land value
- Stand back and look
If trying to establish a rental value:
The same steps as above but an extra step of adding the statutory decap rate.
What are the steps you would take to carrying out a receipts and expenditure valuation?
If I’m trying to establish a capital value:
- Establish the fair maintainable trade of a reasonably efficient operator
- Deduct costs and expenses to achieve the fair maintainable operating profit (FMOP)
- Multiply the FMOP by a suitable YP to arrive at a capital value
If I’m trying to establish a rental value:
The same steps as above, however the FMOP instead becomes the divisible balance and is then split between the landlord and tenant
What are the steps you would take to do a residual valuation?
Gross Development Value (Residual value) = Gross Development Costs less Developers Profit
What is the definition of Gross External Area as per the RICS Code of Measuring Practice 6th edition?
The area of a building measured externally at each floor level
What would you exclude from GEA?
- External open sided balconies and fire escapes
- Canopies
- Open vehicle parking areas, roof terraces and the like
What is the definition of Gross Internal Area as per the RICS Code of Measuring Practice 6th edition?
The area of a building measured to the internal face of the perimeter walls at each floor level.
What would you exclude from GIA?
- External open sided balconies, covered ways and fire escapes
- Canopies
- Open vehicle parking areas, roof terraces and the like
What is the definition of Net Internal Area as per the RICS Code of Measuring Practice 6th edition?
The usable area within a building measured to the internal face of the perimeter walls at each floor level.
What would you exclude with NIA?
- Toilets, cleaners rooms and bathrooms
- Stairwells, lifts and permanent lift lobbies
- Areas with a headroom of less than 1.5m
- Plant rooms and tank rooms
- Entrance halls and balconies used in common
What are the different volumes of IPMS as contained within “All Buildings”?
- IPMS 1
- IPMS 2
- IPMS 3.1
- IPMS 3.2
- IPMS 4.1
- IPMS 4.2
What is IPMS 1?
External measurements for whole or part of a building
What is IPMS 2?
Internal measurements for whole or part of a building
What is IPMS 3.1?
External measurements for exclusive occupation
What is IPMS 3.2?
Internal measurements for exclusive occupation
What is IPMS 4.1?
Internal measurements for selected areas including internal walls and columns
What is IPMS 4.2?
Internal measurements for selected areas excluding internal walls and columns
What are some of the key definitions in relation to IPMS?
- Internal Dominant Face
- Component
- Component Area
- Standard Facilities
What is the Internal Dominant Face?
The inside surface area comprising more than 50% of the lowest 2.75m measurement vertically from the structural floor surface, or to the ceiling if lower, for each wall section.
What is the Component?
One of the main elements into which the floor area of a building can be allocated.
What is the Component Area?
The floor area attributed to one of the components.
What is the Standard Facilities?
Shared areas in a building that typically don’t change over time such as circulation areas, stairs, escalators, lifts, toilets, plant rooms and maintenance rooms.
Can you list some sections of the Commissioners for Revenue and Customs Act (2005) and what they relate to?
Section 7 - Details how the VOA compiles and maintains Valuation Lists and Rating Lists
Section 10 - Details the list of clients that the VOA may act for such as for HMRC or other public bodies
Section 17 - Sharing of information between HMRC and VOA
Section 18 - Sharing of information outside of VOA
Section 19 - Criminal offence to disclose information that can identify an individual
What are the 7 data protection principles for the Data Protection Act (2018)?
- Confidentiality
- Accountability
- Storage limitation
- Accurate and up to date
- Data minimisation
- Lawfulness, fairness and transparency
- Legitimate interest
What are the 8 individual rights under GDPR?
- Right to rectification
- Right of access
- Right of portability
- Right to be informed
- Right to restrict processing
- Right to object
- Right to erase
- Rights in relation to automated decision making and profiling
What are the 6 principles under Article 5(1) for GDPR?
- Not kept longer than necessary
- Adequate, relevant and necessary
- Processed in a manner which ensures security
- Processed lawfully and in a transparent manner
- Accurate and up to date
- Collected for specified explicit and legitimate interest
What are the mentioned matters that can be found within Schedule 6, Paragraph 2(7)?
a) Matters affecting the physical state of the hereditament
aa) Matters affecting the physical enjoyment of the hereditament
b) The mode or category of occupation of the hereditament
c) The quantity of minerals or other substances in or extracted from the hereditament
cc) The quantity of refuse or waste material which is brought onto or permanently deposited on the hereditament
d) Matters affecting the physical state of the locality in which the hereditament is situated
da) Matters which, though not affecting the physical state of the locality, are nonetheless physically manifest there
e) The use or occupation of other premises situated in the locality of the hereditament.
What are the six statutory rules under the Land Compensation Act 1961?
Rule 1: No additional allowance shall be made on account for the acquisition being compulsory.
Rule 2: The value of the land shall be taken to be the amount that it would achieve if sold on the open market.
Rule 3: Special suitability or adaptability of the land is to be ignored
Rule 4: Increase in value due to illegal use is to be ignored
Rule 5: If the land acquired has no general demand or market for land of that purpose, the compensation may be assessed on the basis of the reasonable cost of equivalent reinstatement.
Rule 6: Disturbance compensation assessed on ‘value to owner’ basis not “open market value”
What are the seven physical factors detailed within the Land Compensation Act 1973?
- Noise
- Vibration
- Smell
- Fumes
- Smoke
- Artificial lighting
- Discharge of solid or liquid substance onto the land
What is an all risks yield?
This is a growth implicit yield and it takes account of risks, returns and expectations of growth.
What is a gross initial yield?
This is the simplest yield and is the income as a percentage of the capital value.
What is a net initial yield?
This yield is calculated from a transaction, expressing the income as a percentage of the capital value but reflects the purchasers costs.
What is an equivalent yield?
This is the weighted average yield between the term and reversion or sometimes also called the internal rate of return with no growth.
What is a reversionary yield?
If the rent is likely to change at reversion, then the yield is likely to change too.
This yield reflects the risk, return and expectations of growth at the future rent review or renewal.
What is an equated yield?
This is the discount rate in a discounted cash flow and the internal rate of return WITH allowance for growth. It represents the investors total return.
This yield is NOT an all risk yield because it is growth explicit!
What is the difference between a growth implicit and growth explicit valuation?
Growth implicit - This is where any increases in rental or capital values are reflected within the yield.
Growth explicit - This is where any increases in value are reflected in the cash flow.
What were some of the minimum terms of engagement?
- Identification of Client
- Purpose of instruction
- Identification of property
- Valuation date
- Confirmed standards to be applied (e.g. Red Book, Property Measurement and Code of Measuring Practice)
- Agreed departures
- Basis of value
- Assumptions and Special Assumptions
- Identification of Valuer
- Sources relied upon
- Conflict of interest
- Validity period
- Restrictions on disclosure
- Fee basis
- Currency
- Complaints handling procedure
What does your final red book report include that isn’t in your Terms of Engagement?
The final valuation
What are some of the costs within a GDC for a residual valuation?
- Purchasers costs - 15%
- Construction costs - 15%
- Professional fees - 10%-15%
- Marketing fees - 2.5-5%
