Questions from Competencies Practice

Question 1

What is a Dun and Bradstreet check?

Answer 1

Company Credit Report
Includes;
1. Company Name
2. Company Number
3. A credit score
4. Profit before tax
5. Net tangible assets
6. Turnover

It states the financial strength indicator and risk indicator on a scale of 1-4.

Question 2

How do I carry out a conflict of interest check?

Answer 2

I ensure I am aware of the correct names of all parties and enter it in to a company database.

Question 3

What is an EWS1?

Answer 3

External Wall System Form.

• Relates to the cladding, insulation, fire break systems, etc.
• not required for - More than 18m with no combustible material that forms part of the external wall system. - An EWS1 applies to the entire block and is valid for 5 years.
• A leaseholder may require one if the are mortgaging or selling the flat.
• residential buildings with no cladding will no longer need to undergo an external wall survey (EWS1) process before dwellings can be sold or re-mortgages offered.
• Aluminium composite cladding, timber decking cladding and some forms of insultation between cladding and weather membrane.

Question 4

What is the recent RICS guidance note relating to fire safety?

Answer 4

RICS Valuation of properties in multi-storey, multi-occupancy residential buildings with cladding.

Helps valuers understand the EWS1 form.

Question 5

Difference between GIA and NIA

Answer 5

GIA - total area between the four walls

NIA - total usable area within a building measured to the internal face.

Question 6

What is a loan security valuation?

Answer 6

A valuation carried out for a bank, it is impartial advice on the true value of a property to ascertain the maximum level of that can be borrowed against the asset.

Question 7

Why might a property be unsuitable for a loan security valuation?

Answer 7

If there was a major structural or environmental issue. E.g. subsidence.

Question 8

What is the method used for a loan security valuation?

Answer 8

Need to determine the Market Value

e. g.
1. Apartment - Comparable
2. Block of apartments - residual

Question 9

What is the Residual method?

Answer 9

Used to assess viability of a development scheme.

Site value = GDV - total development costs - profit.

Question 10

What is the RICS Residual guidance?

Answer 10

RICS Guidance Note Valuation of Development Property 2019.

Question 11

What is a marketing period?

Answer 11

The period a property is likely to be on the market for.

A bank may ask for a secured lending value with differing marketing periods.

Question 12

What is a forced sale valuation?

Answer 12

Market value when a marketing period of 90 days/auction is assumed.

Question 13

What happens if parties don’t complete after an auction?

Answer 13

Seller can remarket and recover difference.

Question 14

What is S106 and CIL?

Answer 14

s106 - planning agreement - has to be on site

CIL - funds charged on developments by local authorities to be used for local infrastructure