Questions 5 Flashcards
What’s excluded from Net Internal Area
• areas under 1.5 metres in height
• wc’s
• stairwells
Bribery what are the 6 principles?
• proportionate
•top level comittment
• risk assessment
• due dilligence
• communication
• mothering and review
Bribery - what does proportions mean?
What is the proportion of risk ? How much due dilligence do you need to do
When would you use GEA
Town planning and development
What’s included in GEA
External walls and columns
What’s the difference between consumer protection regulations and the misrepresentation act?
The consumer protection act relates to misleading marketing material for a property.
The misrepresentation act relates to fraudulent statements
Five exceptions of the Red Book Global
- Valuation in preparation for litigation
- Valuation in regards to tax authority
- Internal purposes without liability
- Agency
- Provided to an expert witness
Ps1 red book?
When do you use red book section
What is the structure of the red book?
- Introduction
- Glossary
- Proffesional standards (ps)
- Valuation technical and performance standards (vps)
- Valuation applications (vpga)
- International valuation standards
Ps2 red book?
Ethics
Difference between RPI and CPI?
Measuring inflation
RPI - retail price index: prices goods and services and divides the figure by number of items, taking into account housing costs.
CPI - Consumer Price Index: similar, doesn’t take into account housing costs and is calculated using a geometric means. Usually lower inflation recorded
What does the Consumer protection against unfair trading regulations (2008) do?
Protects customers from unfair or misleading trading and bans aggressive sales tactics
What’s does The business protection from misleading marketing regulations 2008 do?
Protects against misleading marketing
Where can you find information on valuation reporting in the red book?
VPGA1
Tell me the five VPS’s in the red book
VPS1 - Terms of Engagement
VPS2 - Inspections and investigations
VPS3 - Valuation Reports
VPS4 - Bases of Value
VPS5 - Valuation approach
What are the different VPGA’s?
VPGA 1 - fianncial statements
VPGA2 - secured lending
VPGA3 - business and business interest
VPGA4 - Individual trade related properties
What Legislation applies to Japanese Knotweed?
Wildlife and Countryside Act 1981 and the environmental Protection Act 1990
How would you check boundaries of a property?
Go on Land Registry and source plans (Title Plans) and use basic measuring tools and techniques to determine boundary
In Purchase and Sale what would you advise your client if they exchanged contracts but failed to complete.
The deposit could be held by the seller or if the property was remarketed and sold for a lower price the initial buyer could be pursued for the difference
Where would you go to purchase PII?
RICS website approves certain insurers and publish an approved list on the RICS website
In PII if two people are claiming in the same year, could they both claim up to £250,000?
Yes, it’s “each and every claim” - each case has its own claim to that amount
What is an ombudsman?
Someone who is appointment to look into complaints about companies. They are free and impartia. Try and resolve the complaint with the organisation before you complain to an ombudsman
What are the Stamp Duty bands for commercial property?
£0-£150k = NIL
£150k-£250k = 2%
£250k + = 5%
What are typical purchasers costs?
Stamp Duty Land Tax - 0-5%
Agency fees - usually 1% of purchase price + VAT
Solicitor Fees - say 0.5% of purchase price + VAT
What is WAULT and when is it used?
Weighted average unexpired lease term.
A calculation when valuing an asset with a multi occupied investment
What is Zoning and how is it carried out?
Zoning is a valuation technique not a method of valuation.
Used for comparison of retail properties to compare buildings of different size.
Halving back principle every 6.1m as retail properties are more valuable from the front of the shop
What is a Licence?
A right to enter a property
Agreement between licensor and licencee
Can be terminated at any time
3 requirements for a lease?
- Exclusive possession
- Payment of rent
- Duration of a specified term
3 main differences between and lease and a licence
- A lease provides an occupier with an estate, whereas a licence is a permission to use the land
- A lease can be assigned whereas a licence cannot.
- A lease cannot be terminated until it expires. A licence can be revoked at any time
What are 4 bases of rent review?
- Upwards only to the market rent
- Index linked to CPI and RPI with caps and collars.
- Turnover
- Stepped increases
3 usual rent review assumptions?
- That the property is fit and available for immediate occupation
- Property is let in the open market by willing Landlord and willing tenant.
- Property may be used for the purpose as set out in the lease
2 usual rent review disregards?
- Any goodwill from the Landlord
- Any tenant improvements
What is the hierarchy of evidence for a rent review or lease renewal?
- Open market letting
- Lease renewal.
- Rent review.
- Indepentant expert determination
- Arbitrator awards
What is without prejudice save as to costs?
To give a party in a dispute a chance to settle without affording high costing dispute resolution
What can a party do during a disputed rent review
Serve a Calderbank offer as per the legal case Calderbank vs Calderbank 1975 which must be market ‘without prejudice save as to costs”
What’s must a Calderbank offer do?
Must set out clearly the terms that they would accept unconditionally. The terms are potentially binding
What is the lease renewal equivalent of a Calderbank offer?
Lease renewals that are inside the LL & T act 1954 allow for part 36 offers under the part 36 of civil procedure rules.
Differences between arbitrators and independent experts?
CONEL
Costs - arbitrator awards costs, independent expert can’t
Outcome - arbitrator calls awards, independent expert calls determination
Negligence - arbitrator can’t be sued, independent expert could be, unlikely
Evidence - arbitrator acts on evidence provided, independent expert, duty to investigate and discover facts using their own knowledge and expertise
Law - arbitrator acts in accordance to statute Arbitration Act 1996, independent expert governed by contract
What will you find on a rent review memorandum?
• name of the LL & T
• address
• date of the lease and rent review
• confirmation of new rent agreed
• signed and dated by both parties
What is section 24 of the LL and Tenant Act 1954?
At the end of a lease inside the act, the tenancy will not come to an end if the tenant remains in occupation for business purposes, it will automatically continue on the same terms until terminated
What is section 25 of the LL and T act 1954?
Landlords notice served no more than 12 months and no less than 6 months before the expiry. The notice terminates the existing lease.
What must be included in a section 25 notice?
• Date of termination
• be in prescribed form and inform tenant of his rights
• if the landlord is prepared to grant a new lease (non hostile) and the terms stated with new rent
• if the landlord opposes a new lease (hostile) and the grounds for opposition must be stated.
• strong recommendation to seek professional advice
What is included in a section 26 notice?
Tenant to serve notice to a Landlord requesting a new tenancy beginning with a date not more than 12 months and not less than 6 months after making the request.
Must state the tenants new proposals
If landlord opposes a counter notice must be served within 2 months
What is a section 27 notice?
When a tenant does not want a new lease to continue beyond the original fixed term.
What are the grounds for refusal for a new lease under the LL and T act 1954?
• breach of repairing covenant
• persistent delay in paying rent
• other substantial breach
• provide suitable alternative accommodation
• uneconomic subdivision
• demolition / reconstruction
• owner occupation
What is section 24a ?
Interim rent payable after the expiry of the term and before a formal lease renewa has been completed
Cooling off period
A cooling off period of up to 14 days is allowed for clients who change their mind and do not want to instruct the agent
What is CPR’s and what happens if you breach it?
Consumer protection regulations.
They prohibit unfair business to consumer commercial practices such as giving false or misleading information
Breach - unlimited fine
What is a BPR’s
Business protection regulations
They relate to business to business activities and prohibit misleading advertising
What is the misrepresentation act 1967? Who can be sued
Relates to a misrepresentation or a false statement of fact made by a party during pre-contractural enquiries which has the effect of inducing a party to purchase
The vendor or agent can be sued for damages and / or the contract rescinded
3 types of misrepresentation
- fraudulent
- negligence
- innocent
How big can a marketing sign be on a shop and what other rules are there?
• Planning consent needed for boards on commercial buildings bigger than 2 sq m
• one board per building
• must not project more than 1m and not above 4.6m from the ground
What marketing boards need planning consent?
• illuminated boards
• boards on listed buildings
• must be removed after 14 days after completion
• must have owners approval
What is an initial yield?
Rent / value of the asset x 100
What is net initial yield ?
Brings in purchasers costs
• legal fees
• stamp duty land cost
• agency fees
What does CPSE stand for?
Commercial property standard enquiry
What is your firms PII?
£1,000,000
What is the professional standard surrounding leasing and letting?
RICS professional standard: code of leasing business premises 2020
What is the structure of the code of leasing premises?
Part 1: introduction
Part 2: Mandatory Requirements
PART 3: lease negotiation best practice
part 4: appendices
What are some of the mandatory requirements of the Code of leasing business premises?
1.1 Negotiations over the lease must be approached in a constructive and collaborative manner
1.2 if a party is not represented by RICs member it must be advised of the code
6 principles of Bribery
- Proportionality
- Top level commitment
- Risk assessment
- Due diligence
- Communication
- Monitoring and review
What are the 4 offences of bribery?
- Bribing
- Receiving a bribe
- Bribing a foreign public official
- failing to prevent bribery
What is money laundering? And what is the regulation you must know?
Money laundering is when proceeds of a criminal activities are disguised and then realised as legitimate assets.
Terrorist financing and transfer of funds regulations 2017
What are the key provisions of the terrorist financing and transfer of funds regulations?
• requirement to have a written money laundering and terrorist financing risk assessment
• implement systems and policies to addresss money laundering
• provide staff training
What is the amount that requires money laundering checks?
€10,000 a month
What is the minimum amount that you can accept in cash with a fee?
€10,000 euroes
AML DD - what customer due diligence can you do?
• identify the client and verify their identity
• for a company get the name, company number and address
• the names of directors are required unless the company is listed on a regulated marekt
What is Enhanced DD for AML ?
• Additional procedures needed for transactions involving a person in a high risk third country or politically exposed person
What are the penalties for failure to meet AML checks?
• maximum of 14 years in prison and / or an unlimited fine for assisting with money laundering
• maximum for 5 years prison sentence and / or unlimited fine for tipping a person by informing them they are under suspicion for money laundering
What AML checks are needed on a private individual?
Passport / driving license for identity
Copy of bank statement, credit card bill not more than 3 months old
4 offences of bribery
• bribing
• receiving a bribe
• bribing a foreign official
• failing to prevent a bribe
4 offences of bribery
• bribing
• receiving a bribe
• bribing a foreign official
• failing to prevent a bribe
What are the penalties for bribery?
The bribery act is policed by the serious fraud office!
Maximum penalty of 10 years of imprisonment and / or unlimited fine for individuals. Companies face an unlimited fine
