Measurement / P&S / L&T Flashcards
What is your understanding of RICS Property Measurement (2018)?
- Global led initiative
- Aim is to establish global consistencies
- Not mandatory
- Members encouraged to report on a dual basis
- Must advise clients of benefits of IPMS
What are the general principles of measurement and calculation in RICS Professional Statement: RICS Property Measurement (2018)?
- Provide measurement date
- State methodology
- Provide plan reference / scale
- State conversion factor
- Retain record of RICS member responsible to certify
- Document reasons for departure
- Advise clients on benefits
What are the acceptable tolerances for IPMS measurements?
=/- 5 to 50mm depending on purpose of measurement
Found in Appendix A of RICS Property Measurement (2018)
Define IDF?
Internal Dominant Face
Inside finished surface comprising more than 50% of the floor to ceiling height for each IDF wall section
What does IPMS 1 measure?
Area of building including external walls
On a floor by floor basis
What does IPMS 2 measure?
Areas available for direct use.
Measured to IDF of the wall
On a floor by floor basis
In component areas
What does IPMS 3 measure?
Occupation of floor areas in exclusive use to an occupier
Measured to IDF
on a floor by floor basis
What does IPMS 1 state separately and exclude?
SS
- Covered Galleries / Balconies / Generally accessible roof terraces
Exclude:
- UPPER ATRIUM VOID LEVEL
- Open external stairwells
- PATIOS
- REFUSE AREAS
- External parking at ground level
What does IPMS 2 state separately and exclude?
SS
Covered galleries / balconies / generally accessible roof terraces
Exclude
- External parking
- Cooling equipment
- Cooling yards
- REFUSE AREAS
- PATIOS
- UPPER ATRIUM VOID LEVELS
- Decks at ground floor level
What does IPMS 3 state separately and exclude?
SS
Covered Galleries / Balconies / Generally Accessible Roof Terraces
Exclude:
Areas providing shared / common facilities - i.e stairs / lifts /motors / WC’s / cleaners cupboards
Main differences between IPMS3 and NIA?
- Perimeter measurements taken to IDF
- No exclusions for less than 1.5m height
- Columns included
- On floors with multiple occupiers, the area is taken to midpoint
What is your understanding of IPMS All Buildings 2023?
- Supersedes previous documents
- Harmonises all asset classes into single set of standards
- Yet to be adopted
- Published 2023
What do you include within GIA measurements?
- Columns
- Lift wells
- Mezzanines with permanent access
- Loading bay
- Ancillary Offices (GIA)
What do you exclude within GIA measurements?
Canopies, Fire escapes , covered ways
What is a yield?
Measurement of investment return, expressed as a percentage of capital invested
How do you calculate YP? What is it?
100 / yield - number of years required for income to repay purchase price
What is a reversionary yield?
Market Rent / Current Price
What is initial yield?
Current Income / Current Price
What is an Equivalent Yield?
Weighted average of initial yield and reversionary yield
What is an All Risks Yield?
Takes into account all the prospects and risks attached to the particular investment
i.e if you alter the yield
Difference between Gross & Net Yield?
Gross = not adjusted for purchasers costs
Net = adjusted for purchasers cost
What RICS guidance covers DCF calculations?
Practice Information - Discounted Cash Flow Valuations (November 2023)
What are the 5 exceptions to VPS 1-5 set out in PS1?
- Negotiation / Litigation
- Statutory function (except statutory return to tax man)
- For internal purposes without 3rd party reliance / liability
- Preparing evidence as expert witness
- Agency / Brokerage (except when purchase report required)
What does PS 2 cover?
- Ethics
- Competency
- Objectivity
- Disclosures
What does VPS 2 set out? What are the requirements for desktop valuations?
Inspections / Records / Investigations
- Nature of restriction confirmed in ToE
- Valuation implications confirmed in writing
- Restriction referred to in report
- Consider whether restriction is reasonable
What are the 6 basis of valuation?
- Market Value
- Market Rent
- Investment Value
- Fair Value
- Equitable value
- Liquidation Value
What might you include within a loan security valuation?
- Refer to VPGA 2
- Disclose CoI / Information barrier
- Valuation methodology
- Environmental consideration
- Suitability for mortgage purposes
- Value with and without special assumption
What is special value?
Special value represents the particular attributes of an asset that are only available to the special purchaser
What are the four requirements of a lease?
- Exclusive Possession
- Payment of Rent
- Specified duration of term
- If for more than 3 years, terms in writing and written as a deed.
What is the difference between a licence and a lease?
- Lease = estate in land / Licence = permission to make use lawful
- Lease can’t be terminated (unless break) / Licence can be at any time
- Lease = can be assigned / Licence = can’t be assigned
What is a TaW
- Form of licence for unspecified time
- Can be used to allow fit out works
- Can be used to allow negotiations for contracted out tenancies.
What are the four usual assumptions and disregards?
Assumption:
1. Property is available to let on open market between willing landlord and willing tenant for duration of term.
- Property is available for immediate use and occupation.
- All covenants observed
- Can be used for use set out in lease.
Disregards:
1. Effect of goodwill on tenants occupation
2. Goodwill attached to the property
3. Tenants improvements where LL consent granted
What legislation relates to time of the essence?
United Scientific Holdings V Burnley Borough Council (1977)
&
Bello v Ideal View (2008)
What is included within a rent memo?
- Name of tenant & landlord
- Address
- Date of lease and review
- Confirmation of rent
- Signed and dated by both parties
What must a s.25 notice be?
- In prescribed form
- Confirmation whether hostile / friendly
- Grounds for opposition / proposed rent
- State date of termination of tenancy
- Inform tenants of their rights
- Name & Address of LL & Tenant
- Address of Property
- Sent to correctly named party
What must a s.26 notice be?
- In prescribed form
- State proposals for new lease
- If LL opposes counter notice must be served
What are the grounds for opposing a new lease under s.30?
Fault Based Grounds:
a. Breach of repairing covenant
b. Persistent delay in paying rent
c. Other substantial breach
Non-fault based grounds:
d. Suitable alternative accommodation
e. Uneconomic subdivision (c)
f. Demolition or reconstruction (c)
g. Owner occupation (c)
What must a landlord prove for grounds f?
- Planning / Funding
- Board approval
- Firm intention
- Substantial work
- Necessity to gain VP
- Ability to redevelop provided VP secured.
S Frances Ltd v The Cavendish Hotel (London) 2018 - Acid test is whether the LL would undertake the works if the tenant wilfully vacated.
How can you request information from the other party?
LL or Tenant can issue s.40 notice - must confirm name and registered address within a month
Obligation to update if information changes within the next 6 months.
What are the two types of declaration?
- Simple Declaration > 14 days
- Statutory Declaration < 14 days
What must a Landlord give tenant if contracting out?
Health Warning
What are the 7 key principles of the Estates Agent Act 1979?
- Clarity to terms of agency (s.18)
- Honesty / accuracy
- Agreement & Liability for costs
- Openness regarding personal interests (s.21)
- Absence of discrimination
- Legal obligation to inform clients of offers
- Keep clients money separate
What penalties are associated with Estates Agents Act?
- Prohibition / Warning order
- Removal of licence
- Costs can be awarded
What are the main requirements of the Estate Agents Act 1979?
- Specify costs / fees in terms of business
- Specify nature of agency and selling rights
- Advice clients of services available
- Disclose personal interests (s.21)
- Declare interest on HoT’s as minimum
- Handle Clients Money - follow RICS rules
- Only tell truth regarding offers
What are the 12 core principles of UK Commercial Estate Agency 2016?
- Act honest / fair / trans
- Carry out work with due skill
- Clear ToB with CHP details
- COI - avoid / manage
- Do not discriminate
- Fair / timely communications w/ client
- Honest / truthful marketing material
- Client money held separately with insurance
- Hold PII
- Make identity clear
- Realistic values / costs
- Inspections in accordance with clients wishes.
What are key requirements of Consumer Protection Regulations 2015?
- Apply to lettings / sales
- Duty of care to all interested parties
- Declare everything known - no omissions
- Not exert pressure
- Pass on information
- Full DD for new instructions
- Policed by Trading Standards Office
DISCLAIMERS DO NOT APPLY
CRIMINAL - PRISON / PROHIITION / UNLIMITED FINE
What does the Misrepresentation Act 1967 apply to?
Misrepresentation / false statements
What are the offences / penalties for breaching Misrepresentation Act 1967?
- Civil offence
- Sued for damages / contract rescinded
Disclaimer clauses can be affective.
What case law relates to Misrepresentation Act 1967?
Hedley Byrne Co v Heller & Partners (1964)
Three tests to decide liability:
- Foreseeability
- Proximity
- Fairness.
When is planning consent required for marketing signage?
What must marketing signage not do?
Town & Country Planning Act (Control of Advertisement) Regulations 2007
- If over 2m/2.3m (flat/vboard)
- Illuminated
- Remote boards
- Conservation / Listed buildings
Must not project more than 1m from building and 4.6m from ground.
Must have owners approval and be removed within 14 days of transaction completing.
What is your understanding of the Land Registration Act 2002?
- Framework for electronic conveyancing
- Freeholds & 7+ year leases must be registered with compliant lease plan.
What is a compliant lease plan?
- Drawn to metric scale (1:100 / 1:200)
- Scale noted
- Scale measurement bar
- North arrow
- Address & Postcode
- Demise edged in red
- Location plan if in urban area (1:1250)
What are the advantages / disadvantages of private treaty?
Advantages
1. Flexibility
2. Confidentiality
3. No obligation to sell
Disadvantages:
1. Potential for gazumping / gazundering
2. Late decisions not to buy
3. Abortive costs
What are the advantages and disadvantages of Auctions?
Advantage:
1. Short timescale
2. Certainty
3. Useful for unusual / popular
Disadvantage
1. Lack of confidentiality
2. Short marketing period
3. Cannot choose purchaser
4. Cost of promotion and publicity
