Nitty gritty Flashcards
1
Q
1954 Act Part II
A
An Act to provide security of tenure for occupying tenants under certain leases
S24 - If a lease is inside the act, the tenancy will not come to an end if the tenant remains in occupation. Instead it will automatically continue on the same terms until it is terminated.
S25 - Landlord’s notice served between 6-12 months before the expiry of the lease. Non-hostile notice - when landlord is prepared to grant new lease (includes new terms). Hostile notice - When the landlord opposes a new lease (grounds must be stated).
S26 - Tenant’s notice served requesting a new tenancy beginning with a date 6-12 months after making request but not before contractual expiry date specified in lease. (Must include proposals under new lease. If landlord is opposed to this, a counter notice must be served within 2 months).
S27 - Two options if the tenant does not want the lease to continue. 1) They can simply vacate by the expiry date. 2) They can serve a s27(1) notice to the landlord giving 3 months notice. Section S27(2) can be served if a tenant wishes to vacate once they are holding over, but must give 3 months’ notice.
S30 sets out 7 grounds for opposition toe grant a new tenancy.
a) Breach of repairing covenant
b) Persistent delay in paying rent
c) other substantial breach
d) Provide suitable alternative accommodation
e) uneconomic sub division (compensation payable)
f) Demolition or reconstruction (compensation payable)
g) Owner occupation (compensation payable)
a-c ‘fault-based grounds’ d-g ‘non-fault grounds’
a-e discretionary and court will decide if reasonable
f-g mandatory
For redevelopment, landlord must prove firm intention.
For owner occupation, landlord must have owned property for five years & prove intention to occupy and run business.
Compensation:
-14+ years in occupation = RV x 2
- Less than 14 years occupation RV x 1
2
Q
What is a rent deposit?
A
A rent deposit is a sum of money a commercial landlord may request a tenant pay them at the start of a lease. This sum will protect the landlord and act as a form of security should the tenant fail to uphold any lease provision, such as non-payment of rent.
3
Q
How do you perform an assignment?
A
1) Check the lease to check their is nothing prohibiting as assignment.
2) Find a suitable tenant and inform the landlord
3) Landlord has 21 days to respond.
4) Licence to assign drafted by solicitors.
4
Q
How do you serve an outside of the Act lease?
A
- The landlord must serve a notice known as a ‘health-warning’ warning that the proposed lease will not be protected.
- The proposed tenant must make a declaration in response, confirming they they have received the notice and accepts its terms. (Simple declaration - given when the parties have at least 14 days or more prior to committing to the new lease. Statutory - Given when parties have less than 14 days prior to committing to the lease. Must be made before an independent solicitor).
- Procedure must be completed before the lease is signed.
5
Q
Which section of the L&T Act 1954 Part II is relevant for lease renewals outside the Act?
A
Section 38a sets out the procedure that must be followed.
Reasons for contracting outside the act:
- Landlord wants to occupy the property in due course
- Landlord wishes to develop the property as the lease end
- Rent may be lower
- Landlord wants future flexibility
6
Q
The Red Book is mandatory for all valuations except if
A
- Advice is expressly provided in preparation for negotiations or litigations.
- Value is performing a statutory function except for the provision of a valuation for inclusion in statutory return to a tax authority.
- Valuation is provided for a client purely for internal purposes.
- Valuation is provide as part of agency and brokerage work.
- Valuation is provide in anticipation of giving evidence as an expert witness.
7
Q
Method for doing a Residual Site Valuation
A
Gross development value (capital value of completed scheme (GDV)
- Measure. Use plans if needed.
- Valued at current date assuming present values and market conditions
- Comparable method of valuation to establish rents and yields.
- All-risks yield.
- An allowance for tenant incentives can be assumed.
- Purchasers costs deducted.
8
Q
Method for Depreciated Replacement Costs (DRC)
A
- Value land in its existing use (assuming planning permission exists).
- Add current cost of replacing the building plus fees less a discount for depreciation and obsolescence/deterioration (Use BCIS and then judge level of obsolescence).
Physical obsolscence
Functional obsolscence
Economic obsolscence
9
Q
What is a yield?
A
Is a measure of investment return. Calculated by dividing the rent by the capital value.
Comparable evidence guides what yield to use.
10
Q
What is years purchased?
A
Calculated by 100/yield. It is a measure of the number of days it would take for the rental income of a property to repay its value.
11
Q
What is IPMS?
A
International Property Measurement Standards (IPMS) - Aimed at avoiding inconsistent definitions and bringing greater global transparency.
Currently, it is mandatory RICS guidance for members to advise clients on the benefits of IPMS.
IPMS Office, Residential currently incorporated in RICS guidance. IPMS All Buildings was published in 2023 but has not been incorporated yet.
12
Q
Define gross external area
A
Area of a building measured externally at each floor level
13
Q
Define gross internal area, what is it used for and what isn’t include?
A
Area of a building measured to the internal face of the perimeter walls at each floor level.
Supermarkets, retail warehouses, industrial
Doesn’t include canopies, open-side balconies, covered ways, fire escapes
14
Q
Define net internal area, when is it used and what is excluded?
A
The useable area within a building measure to the internal face of the perimeter walls at each floor level.
Used in retail units
Excludes toilets, plant rooms, cleaning rooms, areas with headroom of less than 1.5m
15
Q
What is included in a development appraisal?
A
Site Preparation - Demolition eg
Planning Costs
Building Costs
Professional fees - 10-15% plus VAT for architects, M&E consultants, project managers, structural engineers etc.
Contingency - 5-10% depending on level of risk
Marketing Costs - Sale around 1%. Leasing 10% annual rent
Cost of Finance - Interest rate can include SONIA rate, Bank of England Base Rate plus premium.
Developers Profit - Percentage of GDV or total construction cost - say 15-20%.
16
Q
What is a FRI lease?
A
A full repairing and insuring lease. A lease where the costs of all repairs and insurance are borne by the tenant notwithstanding that: The landlord will almost invariably take out the insurance itself; and. In the case of a multi-let building, the landlord will carry out the repairs to the common parts.
17
Q
What is the definition of fair value?
A
IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Required if International Financial Reporting Standards have been adopted by the client.
RICS view is that this definition is generally consistent with the definition of market value.
18
Q
Movement - talk to me about subsidence and heave.
A
Subsistence - the vertical downard movement of a building foundation caused by the loss of support of the site beneath the foundation.
Heave - expansion of the ground beneath. Could be caused by tree removal.
Signs: Horizontal cracking in brickwork.
19
Q
Water - talk to me about water damage
A
Damp.
Wet rote - Caused by damp and timber decay. Signs include wet and soft timber, a high damp meter reading, visible fungal growth and musty smell.
Dry rot - caused by fungal attack. Signs include fungus, (mycelium spreads across wood in fine and fluffy white strands. Other signs include a strong smell, red spores, cracking paintwork).
Rising damp stomps around 1.5m above ground level.
Condensation caused by lack of ventilation and background heating. Signs include mould and streaming water on inside of window or walls.
Damp can also be caused by leaking plumbing/air conditioning/pipework.
20
Q
Contamination - what are the 3 types of survey
A
Phase 1 - Desktop
Phase 2 - Identification of nature and extent of contamination with detailed soil samples taken.
Phase 3 - Remediation report setting out remedial options with design requirements.
21
Q
Deleterious materials
A
Materials that can degrade with age causing structure problems.
For example -
Reinforce autoclaved aerated concrete (RAAC) - Can degrade overtime and used in many buildings between 1960 and 1990.
High Illumina cement
Woodwool shuttering
Calcium chloride.
22
Q
What are the types of asbestos.
A
Blue - Crocidolite
Brown - Amosite
White - Chrysolite
23
Q
What is the key legislation relating to asbestos and what steps must be taken?
A
The Control of Asbestos Regulations 2012
Criminal offence to not comply
Duty holder must undertake a risk assessment.
Work undertaken must be done be licensed contractor.
Asbestos register must be produced and regularly updated.
Newly constructed buildings must have an architect’s signature to confirm no asbestos present.
24
Q
What does EPC and MEES stand for?
A
EPC - Energy Performance Certificates
MEES - Minimum Energy Efficiency Standards
25
What are the current EPC rules?
EPC's required for all commercial buildings with a total useful area of over 50 sq m or when newly built, sold or let for more than 6 months / or it is newly refurbished, and heating, air conditioning and ventilation services are altered.
Exemptions for listed buildings, religous buildings, temporary buildings.
Currently under MEES, a property must have a minimum rating of E, but it must be B by 2030.
26
What does BREEAM stand for and what is used to calculate it?
Building Research Establishment Environmental Assessment Method
Rated against nine weighted categories including water use, energy consumption, transport links, waste management.
Five ratings: Pass, Good, Very Good, Excellent, Outstanding.
27
What is an unencumbered freehold?
An unencumbered property is a mortgage-free property that is free of loans, charges, and restrictions.
28
What is an easement?
An easement is a nonpossessory right to use and/or enter onto the real property of another without possessing it. It is "best typified in the right of way which one landowner, A, may enjoy over the land of another, B"
29
What makes up purchasers costs?
Stamp Duty Land tax - is in bands
If property worth less than £150,000 = 0%
If property is worth between £150,001 - £250,000 = 2%
If property is worth above £250,001 = £5%
Agents Fees = 1%
Solicitors fees = 0.5%
Plus VAT for both
30
What does EBITDA stand for?
Earnings Before Interest Tax Depreciation and Amortisation
31
What is included in a set of public limited accounts?
Chairmen's statement
Auditorys report
Income statement (P&L)
Statement of financial position (Balance Sheet)
32
What is the difference between balance sheet and a profit and loss sheet?
Balance sheet is a statement of the business's financial position showing its assets and liabilities at a given date.
Profit and loss account is a summary of the business's income and expenditure transactions.
33
What is included in a business plan?
Analysis of opportunities
Risks of the business
Resources Required
SWOT
Fee forecasts
Budgets, Cash flows
34
What types of dispute resolution do you know?
Arbitrator - decides a dispute acting in accordance with statute
Independent expert - Can be appointed by the agreement of the parties (check lease)
Alternative Dispute Resolution (ADR) - CEDR
RICS Dispute Resolution Service
35
What are the principles under UK GDPR?
Article 5(1) Personal data must be:
Processed lawfully, fairly, and in a transparent manner
Collected for specified, explicit, and legitimate purposes
Adequate a limited to what is necessary
Must be kept up to date
Kept in a form that permits identification for no longer than necessary.
Article 5(2) - Controller is responsible for and able to demonstrate, compliance with the principles.
36
What are the requirements and fines for not complying with UK General Data Protection Regulation and the Data Protection Act?
- Data protection impact assessments undertaken for high risk holding of data.
- Data controller decides how and why personal data is processed and is responsible for GDPR.
- Data security breaches must be reported to Information Commisioners Office (ICO) within 72 hours where there is a loss of personal data and a risk to harm individuals.
Fines of up to 4% global turnover or £17.5m (whichever is greater)
37
What are the individual rights under UK GDPR?
1) Right to be informed
2) Right of access
3) Right to rectification
4) Right to erase
5) Right to restrict processing
6) Right to data portability (to use their own purposes)
7) Right to object
8) Rights to automated decision making and profiling
38
What is the freedom of information act?
Gives individuals the right to access held by public bodies (companies house, land registration)
Exemptions are allowed if contrary to GDPR requirements or it would prejudice a criminal matter under investigation
39
What is an non-disclosure agreement (NDA)
Legally enforceable contract between two parties relating to sensitive information.
Will create a confidential realtionship between a person who has sensitive information.
Legal action can be undertaken if breaches.
40
What are the 9 protected characteristics under the Equality Act 2010?
Gender reassignment
Sex
Age
Marital or partnership status
Religion
Race
Sexual Orientation
Disability
Pregnancy and maternity
41
What is an unconscious bias?
Associations we hold which are deeply ingrained and outside of our consciousness or control
42
What are the key skills for effective team working?
listening
discussing
persuading
respect
helping
sharing
participating
communicating
reflecting.
43
How does the Equality Act 2010 link with Inclusive Environments?
An inclusive environment is one which is designed and managed to allow people with a diverse range of needs and abilities to access and use it.
The Equality Act includes 9 protected characteristics, and an inclusive environment is one that caters to all needs under this.
The act also extends the existing requirement for reasonable adjustments to be made to help disable people if they would be placed at a substantial disadvantage if the work was not carried out.
When faced with an obstacle to access for disable persons, The act requires the service provider to remove or alter the feature, or provide a reasonable means for avoiding the obstacle or reasonable alternative access to the service.
44
What is included in a risk assessment?
1. Identify the hazards present
2. Identify the people at risks from the hazards eg. employees, contractors, visitors
3. Evaluate the risk, considering the likelihood and severity of any accidents. Existing precautions in place should be identified and evaluated.
4. Record the findings on a suitable form
5. Review the risk assessment regularly.
6. Advise all those affected of the outcome of the risk assessment and methods of work and precautions to minimize or eliminate risk.
45
What is the 'safe person' concept?
An individual who assumes individual behavioural responsibility for their own, their colleagues' and others health and safety while at work.
46
What does the Health & Safety at Work 1974 act relate to?
Duty of the employer to ensure as reasonably practicable the health and safety at work for all employees.
47
What are the 'Six Pack' of H&S Regulations?
1. Management of Health and Safety at work
2. Display Screen Equipment
3. Manual handling Operations
4. Personal Protective Equipment at Work
5. Provision and Use of Work Equipment
6. Workplace health, safety and welfare.
48
What is the structure of the Red Book
1. Introduction
2. Glossary
3. Professional Standards (PS) - What valuations aren't included under Red Book, ethics, competency, disclosures
4. Valuation technical and performance standards (VPS) - VPS1 ToE, VPS2 Bases of Value, assumptions and special assumptions , VPS3 Valuation Approaches and Methods VPS4 - Inspections, investigations and records, VPS5 Valuation Models (New) VPS6 Valuation reports
5. Valuation applications (VPGA)
6. IVS
49
What is the investment value?
The value of an asset to a particular owner or prospective owner for individual investment or operational objectives.
50
What is the RICS Valuer Registration Scheme?
Put in place in October 2011 to improve quality, to meet RICS requirement to self-regulate effectively, to protect and raise the status of the valuation profession.
Information required:
Type of valuations
Purpose of valuations
Number of valuations
Firm's total fee income from Red Book Global valuations
What data sources are used
Quality assurance audit procedures in place
History of any negligence claims
51
What is the Pereira Gray report? And what measures were put in place?
As a result of Covid-19, the Standards and Regulation Board commissioned a review to future proof the valuation.
Recommendations include:
- Valuers should ensure separation of valuation and advisory activities.
- Rotation process for valuers
- Clearly signposted processes for its regulated members and other stakeholders in relation to ethical conduct and address.
- Valuation audit trails.
52
Under Real Estate Agency and brokerage 2016, what are the 12 mandatory principles?
1. Honest, fair, transparent, and professional manner
2. Carry out work with due skill, care and diligence,
3. Fair and clear ToE
4. Do utmost to avoide conflicts of interst
5. Do not discriminate
6. Ensure communications are clear
7. Ensure advertising material is honest, decent and truthful
8. Ensure that all client money is held separately
9. Have adequate PII
10. Ensure it is made clear to all parties the scope of your obligations to each party.
11. Give a realistic assessment of the likely selling, buying or rental price, cost of occupancy, or the likely financial outcome of any issues using best judgement
12. Ensure meetings, inspections, viewings carried out in accordance with client's lawful and reasonable wishes.
53
Under Real Estate Agency and brokerage 2016, what are the 8 best practice sections?
1. Ethics
2. Securing instructions
3. Acting for the seller: marketing the property
4. Acting for the seller: agreeing the sale or lease
5. Acting for the buyer
6. Ending the instruction
7. Safety and security
8. Agency management
54
Who enforces EPCs?
Local Authority Trading Standards
55
What RICS document provides guidance on commercial market appraisal.
UK commercial real estate agency, 2016
Not a formal valuation. Should only be provided if you have a thorough knowledge.
4.5.1 - Advising on the property price or rent or marketing purposes - Should be realistic. Provided in good faith. Should take into account likely lease terms. Should be supported with comparables.
4.5.2 Providing market advice.
Before you must - inspect the property inside and out. Take measurements. Review condition. Ask client questions. Obtain comparable evidence/market sentiment evidence. Try to establish comparable transaction context to ensure no special factors, special purchasers, insolvency sales etc.
4.5.3 Reporting your advice to the client
Should always confirm your recommendation in writing. Should include comparative data. Should include recommended lease terms.
Should form part of the marketing strategy and advice.
4.5.4 Keeping records
Should be kept including evidence used to reach your opinion of rent.
Should include all comparative data you have used, the adjustments made, measurements, inspection notes.
56
What is the definition of a market appraisal?
An estimate of market price or rent based on market evidence and knowledge of the local market.
57
How is a market appraisal different to a valuation?
Not necessarily performed by a registered valuer. Not covered by Red Book. Does not come with any liability. Can be a free service. Does not need to be accompanied by ToE, a report.
58
What is IPMS?
Global led initiative aimed at bringing greater transparency to measurement definitons.
IPMS Office and IPMS Residential incorporated into RICS standards.
IPMS 1 - GEA
IPMS 2 - GIA
IPMS 3 - NIA
59
Define shop depth
Measurement from the notional display window to the rear of the retail area
60
Define gross frontage
Overall external measurement in a straight line across the front of the building from the outside of the external walls or the center line of the party walls.
61
Define net frontage
Overall frontage of the shop line measured between the internal face of the external walls.
62
What is a special assumption?
When the valuer assumes facts that differ from those existing at the valuation date.
Eg a quick sale, Vacant Possession, trading equipment removed.
63
What is a special purchaser?
A particular buyer for whom a particular asset has a special value because of advantages arising from its ownership that would not be available to other buyers in a market.
64
What is a reasonably efficient operator? (REO)
Concept where the valuer assumes market participants are competent and acting in an efficient manner. Involves estimating if the the actual trade level should be adopted or if it should be estimated to reflect what an REO could achieve.
65
What is a service charge?
These are costs incurred by the Landlord for running and maintaining shared parts of the building or estate, which the landlord can charge back to tenants.
66
What is a business rate?
A tax on the occupation of non-domestic property.
67
What is a Dun & Bradstreet test?
A comprehensive business profile and credit score based on public and private information about a company in question.
68
What is an Experian Credit Risk report?
A report that evaluates a collection of information such as credit/loan history, identity information, company structure. Provides credit limit and credit ratings, and a delphi score which gauges the risk of a company facing financial troubles or failure in the next 12 months by analysing its performance and credit history.
69
What is a profit test when reviewing a tenant's suitability for taking a lease.
Net profit must be 3 times the rent for 3 consecutive years.
Or net asset value of business must be more than 5 times the rent.
(Market demand and suitability of building can affect this).
70
What is a WAULT?
Weighted average unexpired lease term remaining to the first break or expiry of a lease across asset weighted by the contracted weight
71
What is a pre-letting?
A letting before the premises is available?
72
What are the advantages and disadvantages of pre-letting?
Advantage
If tenant has bespoke fit out this can be factored into design of unit.
Disadvantages
Entering a long and length process
Risk if the developer or contractor does not perform.
73
What needs to be attached to the agreement for lease?
The lease - in its pre-agreed form which shall be executed once the developer has fulfilled obligations.
License for alterations - to allow tenant to undertake fitout works
Fit out plans
Developers guarantee
Warranties
Collateral warranty - gives tenant direct contract with construction team
74
What is current uniform business rate for 2024/25?
£0.499 for RVs less than £51,000 (frozen from previous year)
£0.555 for RVs of £51,000 or more. (increased from £0.546)
Crossrail Levy for most properties in Central London (additional 2p, so most properties in Central London will use a multiplier of £0.575)
In City Of London, there is a 2.2p surcharge on standard properties and 2p for smaller properties.
Varies in City of London, Wales and Scotland
75
Explain how to do a DCF?
1- Project cash flows (income less expenditure) for a holding period (10 years)
2 - Estimate the exit value at the end of the holding period
3 - select the discount rate
4 - Discount cash flow at discount rate
5 - Value is the sum of the completed discounted cash flow to provide the NPV
76
What is the Net Present Value (NPV)?
Sum of the discounted cash flows.
Can be used to determine if an investment gives a positive return against a target rate of return.
77
Internal rate of Return
The rate of return at which all future cashflows must be discounted to produce an NPV of zero.
78
What RICS document relates to DCFs?
RICS Practice Information: Discounted Cash Flow Valuations, Novembe4 2023
79
Profits method
1. Annual turnover less costs/puchases
= Gross profit
Less working expenses
= Unadjusted net profit
Less operator's remuneration
= Adjusted net profit known as FMOP
Can be expressed as the EBITDA
Capitalised at appropriate yield
Cross check with comparable sales information
80
What is PS 1 of Red Book
Professional Standards
PS1 Compliance with standards and practice statements where a written valuation is provided.
81
What is PS2 of Red Book?
Professional Standard
PS2 Ethics, competency, objectivity and disclosures
82
What is VPS 1 of Red Book?
Valuation Technical & Performance Standards (VPS)
VPS1 - Terms of Engagement
To include:
Identity and status of valuer
Asset to be valued
Currency
Purpose of valuation
Basis of value
Valuation date
Extent of investigation
Nature and source of the information to be relied upon
Restrictions for use
Limitation of liability agreed
83
What does VPS 4 relate to in the new red book?
Inspections, investigations and records
Valuers must take the steps (inspection) to verify necessary information
If information is restricted and no inspection is undertaken, a desk top valuation is permitted but:
1. Nature of restriction must be agreed in writing in ToE
2. Possible valuation implications must be confrimed in writing before valuation is reported.
3. The valuer should consider whether the restriction is reasonable with regard to the purpose of the valuation.
4. The restriction must be referred to in the report.
84
In a revaluation, do you have to inspect?
A revaluation without inspection is allowed only if the valuer is satisfied there have been no material changes to the property or nature of its location.
Must be recorded in ToE and valuation report.
85
What does VPS6 relate to?
VPS 6 Valuation reports
Valuation reports must:
Status and identity of valuer
Identify client and intended users
Purpose of the valuation
Basis of value adopted
Valuation date
Extent of investigation
Nature and source of information relied upon
Assumptions and special assumptions
Restrictions on use, distribution and publication of the report
Confirmation that the valuation has been undertaken with IVS and/or Red Book
Valuation approach and reasoning
Amount of the valuation
Date of valuation
Commentary on any material valuation uncertainty
Set out limitations on liability
Significant ESG factors used and considered
86
What does VPS2 relate to?
VPS 2 Bases of Value
Market Value
Market Rent
Fair Value (IFRS 13)
Investment Value
87
What does VPS 3 relate to?
VPS 3 Valuation Approaches and method
Valuers responsible for choosing and justifying their valuation approach.
In some cases, more than one approach may be appropriate.
88
What is Part 5 of the Red Book?
Valuation Applications (Valuation Practice Guidance Applications - VPGAs)
89
Under VPGA2, when should a loan security valuation be declined?
- If there is a longstanding relationship with prospective borrower or owner
- When the valuer will gain a fee from introducing the transaction to the lender?
- If there is a financial interest
- When the valuer is retained to act on the disposal or letting.
90
Under VPGA 2, what should be included in a loan security report?
Disclosure of any involvement identified in ToE
Valuation method
Comment on environmental considerations
Comment on loan security suitability
Circumstances that could affect price in future
Any special assumptions
91
What was included in the latest Red Book national supplement?
Mandatory rotation
1. Maximum of 10 years before rotation (this might include multiple engagements)
2. Maximum Single engagement of 5 years
3. A maximum of 5 years before the rotation of an individual reponsible valuer
4. Minimum of 3 years after rotating off an engagement.
92
What are the planning use classes?
Class A1 to A5, B1, D1 and D2 are revoked.
Class E amalgamates - A1 (retail), A2 (financial and professional services), A3 (restaurants/cafes), B1 (offices) along with health/medical uses, creches, nurseries (all formally D1) and indoor sports/recreation (formerly D2).
Permission not required to change between any uses within class E.
Class A4 (drinking establishments) and A5 (hot food takeaway) now become 'sui generous' meaning beyond classification.
93
What are the rules relating to marketing signage?
Town & Country Planning (Control of Advertisements) (England) Regulations 2007 as amended
Without planning consent - flat boards under 2 sqm, V boards 2.3 sqm. Only one board per building.
Can't project more than 1m from face of building and can't be above 4.6m from ground.
Planning permission needed for: illuminated boards, remote boards, listed buildings, conservation areas.
Must be removed 14 days after
Must have owner's approval.
94
Give an example of case law
Gill v Lees News Limited (2023)
Relates to the LTA 1954 section 30.
Landlord had rejected tenants s26 claim and had issued a hostile s25 siting grounds a (repair covenant), b (delaying in paying rent), and c other substantial breaches.
Judge found this to be the case at the date of the counternotice, but by time of hearing the issues had been remedied and judge ordered the grand of new tenancy.
Landlord's appeal was rejected and it sheds light on when grounds will be considered. Court confirmed correct approach is cumulative and not compartmentalized.
95
Under LTA 1954 S30 what are the fault clauses?
a) breaching repair covenant
b) persistent delay paing rent
c) Other substantial breach
d) Suitable alternative accomodation provided
96
Under LTA 1954 s30 what are the non-fault clauses?
e) Uneconomic subdivision
f) demolition or reconstruction
g) Owner occupation
97
When is DRC not suitable?
Red Book Global compliant valuations for secured lending purposes.
Can only be used for calculation of market value for specialised properties only for valuations for financial statements.
98
What is the RICS Structure?
Under the Royal Charter, the Governing Council approves RICS strategy and vision, and oversees effective delivery of the strategy.
Below is the RICS management board which has various committees (Global Members / Audit, Risk Assurance and Finance Committee) and the Standards and Regulation Board which is chaired by Nigel Clarke.
99
Who is RICS President, President elect and CEO?
Tina Pailett FRICS
Justin Sullivan FRICS
Justin Young
100
Give a piece of RICS news?
Governing Council election results are in. Commercial Property Seat - David Hourihan. Valuation seat - Jason Hardman
Switching of
101
What are the new RICS document types
Professional Standards -which set mandatory requirements and best practice.
Practice information - This is supplementary guidance to support surveyors in delivering specific services or working in specific areas of practice. The guidance is not mandatory and does not provide explicit recommendations.
102
Why do surveyors need to be aware of key professional guidance?
To maintain competence
and for reference of acting with reasonable competence if faced with a negligence claim.
103
Tell me about the new guidence relating to Social Media: guidance for RICS members
Newly updated guidance.
RICS members must uphold rules of conduct when posting on social media. Includes statements which question the connection between professional and personal posting and includes case studies.
Members must think about if public comment might be misinterpreted as professional opinion.
Must think about if discriminatory posts link to professional life.
Liking or sharing of specific content personally could lead to allegations of conflict of interest professionally.
In order to comply with Rule 4, members and firms should express views in a professionl and respectful way.
104
What is your understanding of the Bichard Review?
Independent review commissioned by RICS Governing board in December 2021 looking into purpose, governance, and strategy of RICS following Levitt Review.
36 Recommendations including:
1- Renewed public interest focus for RICS, including amendment of Royal Charter.
2-Maintaining self regulation
3-Increased focus on diversity
4-Empowering and enabling members through greater support for regional boards.
5-Undertake an independent review of RICS governance effectiveness and effectiveness at delivering against its royal charter for the public every 5 years.
6-New simplified, clear, accountable strucutre
7-Show greater leadership on issues that matter most.
105
Benefits of being an RICS member
Status
Recognition
Market Advantage
Knowledge
Network
106
How does RICS act in publics best interest?
Maintains highest standards of education and training.
Protects consumers through strict regulation of professional standards
Is the leading source of information and independent advice on land property, construction and associated environmental issues.
107
What is an exit yield?
Capitalisation yield used to capitalise the rental income or value at the terminal date of the DCF valuation.
108
What is a discount rate?
Use to derive the present value or net present value of the expected future cash flows.
109
Why has new global practice information on DCF valuations come out?
1. Previous guidence was published 13 years ago and needed to be updated in line with technical advances.
2. Had to be expanded from UK to global coverage
3. Pereira Gray report highlighted that valuation profession should incorporate DCF as principle model applied in preparing property investment valuations.
110
What is the UK National Supplement?
Most recently published in October 2023 and to be enforced from May 2024.
It sets out specific requirements, together with supporting guidance, for members on the application of the RICS Valuation – Global Standards (Red Book Global Standards) to valuations undertaken subject to UK jurisdiction.
Changes include
Mandatory valuer rotation
New VPGAs:
VPGA1 - Valuation for financial reporting
VPGA8 - Valuation of charity assets.
VPGA9 - Relationship with auditors
111
What are the two types of asbestos survey?
Management survey
- Locate, assess and advise on its management during occupation and use of premises.
Refurbishment/demolition survey
Required where premises or part of it needs upgrading, refurbishments or demolition.
112
5 Steps to take with regards to asbesos
1. Assess premises whenever containing asbestos.
2. Assess risk & produce asbestos management plan
3. Asbestos register
4. Make register available to all relevant parties
5. Review regularly.
113
What is an inherent defect and what is a latent defect?
Inherent - Defect in design or a material which has always been present.
Latent defect - Fault that could not have been discovered by a resonably thorough inspection of the property.
114
What are four steps if you identify a defect?
1. Take photos
2. Try to establish cause
3. Inform client of investigations
4. Recommend advice from a building survey or or structural engineer (if movement)
115
What is an IRI Lease?
Stands for internal reporting insuring lease. Tenant has narrower liability for maintenance, repairs and insurance, which is confined to the internal parts of the property and not the external.
116
What are the forms of commercial leasing agency?
Sole
Joint
Multiple
117
What is a protected tenancy?
Tenancy inside the act.
118
What is the Six Pack of H&S Regulations
Group of 6 regulations introduced in 1993 covering various aspects of H&S compliance.
Clarify how employers must comply with their duties under the Health and Safety at Work Act 1974.
Regulations are:
1. Management of Health and Safety at Work
2. Display Screen Equipment
3. Manual Handling Operations
4. Personal Protective Equipment at Work
5. Provision and Use of Work Equipment
6. Workplace health, safety and welfare
119
What are the signs of Reinforced aerated autoclaved concrete?
RAAC panels are light-grey or white in appearance, the underside of the panels will appear smooth. The inside of the planks will appear bubbly, often described as looking like an Aero bar. Unlike traditional concrete, there will not be visible stones (aggregate) in the panels.
120
What property types should not be measured using the Code of Measuring Practice?
Offices and Residential which are covered in IMPS Residential and IPMS Offices.
IPMS All Buildings 2023 has not yet been incorporated into RICS guidance and Code of Measuring practice should be used for all properties that aren't offices and residential.
121
What is IPMS 1?
IPMS 1 refers to the measurement of the area of a building from the external face of the building's external walls.
Essentially Gross External Area (GEA)
Measurements included but stated separately are:
- Covered galleries
- Balconies
- Generally accessible roof terraces (GEA does not include galleries or balconies)
Exclusions include:
- Upper void levels of an atrium
- Open external stairwells
- Patios, refuse areas, external parking at ground level
122
What is IPMS 2?
- Measures the total useable internal area of the building.
- Used for measuring the interior of an office to include all areas available for direct use, measured to the 'Internal Dominant Face' (IDF) of the wall on a floor-by-floor basis in component areas.
Most related to GIA
Measurements included but stated separately are:
- Covered galleries and balconies
- Generally accessible roof terraces
Exclusions:
- Open light wells and upper-level voids of an atrium
- Patio and decks at ground floor level
- External parking, equipment yards, cooling equipment, refuse areas.
123
What is IPMS 3?
Used for measuring the occupation of floor areas in exclusive use using same assumptions are IPMS2.
Measured to the internal dominant face on a floor-by-floor basis
Floor area available on an exclusive basis to an occupier
Excludes standard facilities providing share or common facilities such as stairs, lifts, motor rooms, WCs, cleaners cupboards, plant rooms etc.
124
What are the differences between IPMS3 and NIA?
- Perimeter measurements are taken to the IDF
- No exclusions for restricted height of less than 1.5m
- All columns are included
- Area occupied by the reveals of a window when measured and assess as the internal dominant face are included
- On floors with multiple occupiers, the area is taken to the midpoint of the partition wall between tenancies.
- Covered galleries and balconies for the exclusive use of one tenant are included and stated separately.
125
What is IPMS: Residential Buildings?
Came into effect in May 2018 and the standards are:
IPMS 1 External
IPMS 2 Residential (internal) - interior of the building
IPMS 3 Residential (Occupiers) - The occupation of the building on an exclsuive basis to an occupiers. Broken down into 3 sub areas:
IPMS 3A - Measurement of the outer face of the external wall and centre-line of shared walls
IPMS 3B - Measurement of the area in exclusive occupation, including internal walls and columns, measured to the Internal Dominant Face and finished surface
IPMS 3C - Measurement of the area of exclusive occupation, excluding the walls and columns, measured to the Internal Dominant Face and finished surface.
126
Define internal dominant face (IDF) and a IDF Wall section
Internal dominant face - The internal finish comprising more than 50% of the floor to ceiling height for each IDF Wall Section. If such does not occur, the Finished Surface is deemed to be the IDF.
Internal Dominant Face (IDF) Wall section - Each internal finish of a section of an external wall, ignoring the existence of any columns, that is either recessed from or protrudes from its adjacent section.
127
Define the term limited use areas which is used in IPMS
Portions of a building or space that are accessible but not suitable for general use or occupancy.
EG:
- Service rooms (boiler rooms, pump rooms)
- Ceiling or floor voids - spaces above the ceiling or below the floor used for infrastructure
Staircases
128
Define finished surface in IPMS
The wall surface directly above the horizontal wall-floor junction, ignoring skirting boards, cable trunking, heating and cooling units, and pipework.
129
Define common facilities in IPMS
Parts of a building providing shared facilities that typically do not change over time.
EG - lifts, circulation areas, toilets, cleaner's cupboards, plant rooms, fire refuge areas.
130
Define component area in IPMS
The extent at ground level of the area of a building covered by one or more roofs, the perimeter of which is the outermost structural extension, exclusive of ornamental overhangs.
131
What is VPS 5 of the Red Book 2025?
VPS Valuation Models
Outlines IVS definition - IVS Defines a valuation model as a 'quantative implementation of a method in whole of in part that converts inputs into outputs used in the development of value'.
Valuers must make sure model is suitable for valuation purpose and use appropriate professional judgement
The more advanced the model, the greater the degree of vigilance needed to ensure there is no internal inconsistency or error.
132
Why was the Red Book updated in 2025?
Updated due to RICS' commitment to support high standards in valuation delivery worldwide and to future proof practices in publics best interest.
Changes reflect:
- Alignment with development in other global standards
- Addition of new content in relation to modelling and methods.
- Adaption to practice and process changes from evolving areas in technology and ESG.
133
What are the key changes to the red book 2025?
PS1 (Compliance with standards where a written valuation is provided) and PS2 (Ethics, competency, objectivity and disclosures have been revised.
VPSs (Valuation and technical and performance standards) have been revised and reordered:
VPS 1 (Terms of Engagement) > VPS1
VPS 2 (Inspections, investigations and records) > VPS4
VPS3 (Valuation Reports) > VPS6 and includes some additional items and entriets
VPS4 (Bases of Value, assumptions and special assumptions) > VPS2
VPS 5 splits into VP3 (Valuation approaches and methods and VPS5 Valuation Models)
134
What are the signs of asbestos?
Asbestos is often hard to detect as asbestos-containing materials (ACMs) often look similar to non-asbestos materials.
But, certain materials and building features in older buildings (constructed before 1980s) are more likely to contain asbestos.
1 - Insulation - Often white or grey, with a fluffy or fibrous texture - Could appear around pipes, boilers, ducts.
2 - Textured ceilings - Often white, off-white or grey with a rough texture. When damaged and disturbed, the ceilings may become powdery or crumble.
3 - Asbestos cement - Corrugated
cement roofing - looks brittle and has a greyish rough surface.
4 - Pipe insulation - Looks like a soft, fibrous blanket and is often white or off-white. Commonly wrapped around pipes and heating ducts
135
What are the signs of contamination?
1. Discoloured soil or ground - Oil or grease marks, dark patches, reddish-brown areas
2. Standing water - Pools of stagnant or unusual water that may have an oil sheen, different colour or smell.
3 - Evidence of burnt or charred soil
4 - Unusual vegetation - Dead plants, stunted growth, unhealthy vegetation.
5 - Chemical smells - Could be a sign of petrol or gas
6 -Visible waste - Presence of industrial waste
7 - Past land use and surrounding land usage
136
What is a licence?
-A right to enter a property
-A personal arrangement between licensor and licensee
-Licensee acquires no interest in the property
-A personal right which can be terminated by either party.
137
What are the differences between a lease and licence?
1. Lease provides an occupier with an estate in the relevant land - a licence is a permission to make it lawful for them to use the land.
2. A lease can be assigned - a licence is normally a personal right that cannot be assigned.
3. A lease cannot be terminated until it expires (unless there is a break clause) - a licence can usually be revoked at any time.
138
What does without prejudice and subject to contract mean?
Without prejudice - During period of negotiations, the opposing party cannot subsequently rely upon any document or discussions held which are labelled 'Without prejudice' where representations made in litigation to a judicial or quasi-judicial body.
Information is therefore 'privileged' and cannot be used as evidence against the part that sent the letter.
Subject to contract - same meaning.
139
What legislation controls marketing boards?
Town & Country Planning (control of advertisements) (England) Regulations 2007 as amended.
Maximum 2 sq m (flat) and 2.3 sq m (v board).
Only one board per building
Must not project more than 1m fromthe face of building and not above 4.6m from ground.
Planning permission required for:
-Illuminated boards
-Remote boards
-Listed buildings
Must be removed 14 days after completion of transaction.
-Local authorities may have more restrictive requirements eg London Boroughs.
-Policed by Local Planning Authority who can remove boards, issue fines and order costs.
140
What are dilapidations?
Refer to the state of disrepair or damage to a property particularly in the context of a lease agreement.
Typically arise at end of lease term when tenant is responsible to return the property in a certain condition, often to a state specified in the lease.
In essence, dilapidations are breaches of the tenant's obligations regarding the condition of the property, and the landlord may seek compensation or remedial action for any damage caused or maintenance not performed.
