Questions on Case Study Flashcards
CASE STUDY
What did the terms of business include? –
What did you do as part of your desktop review
Rating consultancy, 4th edition Appendix A, terms of the instruction (rating list, fee basis), Savills standard consultancy terms of engagement (fees will be transparent, terminate appointment of savills with 28 days notice)
Did you carry out a conflict of interest check and which statement would you have used?
Yes i used my firms internal portal. i understand that The Conflict of Interest professional standard does not allow you to choose whether
you can proceed despite a Conflict of Interest or a significant risk of one: it prohibits you
from proceeding, unless you obtain prior Informed Consent from all affected parties.
Did you need PPE at inspection ? – did you inspect alone?
Inspected with my line manager - arranged to meet the property manager on site (as the units were vacant did not need to notify the tenants)
High vis
What did you do as part of your desktop review?
- Location of the unit
- Rating assessment size and description of the unit
-Checked asbestos survey (asbestos is contained within cement product as part of guttering and within the roof was in situ and it was deemed safe to inspect)
Can you talk me through how you inspected the property ?
In my experience there are 4 stages to an inspection – these are…
- is there a particular aspect you would like me to focus on?
- Desktop review – maps, plans, health and safety – tell them how you arranged access to the site, asbestos register - read survey and checked with the property manager
- Immediate locality – is it near motorways, , flooding risk,
- Exterior – construction, repair, decoration, eaves height, SITE COVERAGE
- Interior- Repair, dec, features, specification
Can you talk me through how you measured the property?
- measured whole in closed area within the external walls
- the partitioning for the toilet was lightweight and was not reported separately (would have done so if it was brick built toilet block with lighting and flooring - voa may add on 10% for this)
What is the demise/ what is the site coverage?
PARKING AREA TO THE front of the unit and then shared yard/ parking area
When was the unit vacated? & did you apply for empty rates relief?
Jan 24 - yes 6 months relief granted
How old is the property ?
Approx 70 years according to PM
What is the EPC rating?-
EPC D – improvements are install actual heating system instead of plug in electric heaters and to change lighting to LED lighting- would raise to a C
what is the main construction?
steel portal frame, internal painted brickwork and concrete floor
what is the main risk to repair of steel portal frame?
Cut edge corrosion but none reported at the unit
How does the eaves height of 3.14 m compare to modern units?
New modern buildings norm have eaves of + 12 metres high. NOTE but maybe don’t mention - the rough standard for older units in rating manual is 3.5-4m so is slightly below unit 4b
What is the site access like?
private secure road into the estate
Are there nearby industrial estates?
2 x small estates near chipping norton
Who is responsible for the maintaining the area in front of the property?
tenant is resp for space in front of property as falls within demise, LL resp for maintaining estate road (paid through by the SC)
What other property types are on the estate at enstone
Range of industrial units – 300 sqm (3000 sq ft ) to approx. 1400 sqm (14,500 sq ft)
Any flood risk- V low risk
What is the definition of gross value referred to within the second lotus and delta principle?
Geneeral rate act 1967-gross value “, in relation to a hereditament, means the rent at which the hereditament might reasonably be expected to let from year to year if the tenant undertook to pay all usual tenant’s rates and taxes and the landlord undertook to bear the cost of the repairs and insurance and the other expenses, if any, necessary to maintain the hereditament in a state to command that rent;
What are the 3 assumptions of the hypothetical tenancy?
“The rateable value of a non-domestic hereditament none of which consists of domestic property and none of which is exempt from local non-domestic rating shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year on these three assumptions -
(a)the first assumption is that the tenancy begins on the day by reference to which the determination is to be made;
(b)the secondassumption is that immediately before the tenancy begins the hereditament is in a state of reasonable repair, but excluding from this assumption any repairs which a reasonable landlord would consider uneconomic;
(c)the third assumption is that the tenant undertakes to pay all usual tenant’s rates and taxes and to bear the cost ofthe repairs and insurance and the otherexpenses (if any) necessary to maintain the hereditament in a state to command the rent mentioned above.”
How did you analyse the chosen comparable unit 4c? – what about the stepped rent?
Why do you think the VOA adjusted their val from £60 psm to 58.50?
Due to the lack of heating
Was the price for parking reflected in the valuation?
yes included in a val scheme where parking is assumed to be part of the value of the property
How else could you analyse the rent if not on a straight line basis?
Why do you think it is taking more time for the VOA to respond to your challenge?
It’s a rental challenge which has the potential to affect 6 other units on the estate that are assessed at a UAR of £60 per sqm
Can you give an example of other piece of rating work you have completed at enstone?
- Helped secure 6 months void rate on unit 4…
- Inspected and measured unit 20 - submitted a check for deletion - property was without roller shutter doors, open side of the unit removed - couldn’t have been occupied while the contractors were in situ
How might the voa write up your valuation differently from what you have done?
£57.50 unadjusted rate then deduct £1.50 for lack of heating.
was there a price added in for the W/C?
No - lightweight portioning to create W/C
- if it was a solid structure with lighting, flooring VOA may add on plus 10% adjustment for this
If the tenant added heating, sprinklers would this affect the RV?
Yes- the voa would add on - they base it as a % of the average values for these items and use this
iF YOU wanted to check then the process would be to get the tenant cost for works and apply decap rate
Would the voa add an addition for hard surfaced fenced land if it had some?
yes - under the val scheme for this property they would add £8.00 per sq m for fenced and surfaced land
What are common types of plant and machinery at industrial premises?
Cranes - fixed (may have solid base but revolve around a pivot) - rateable to extent of the structural parts
Security System (5 cameras or more)
If the tenant added a mezzanine how would this affect the RV?
yes would be added on as a separate line entry
What is the process if the challenge is not accepted?
The interim decision is issued, respond via email or call to the VOA, decide if you want to pursue further and talk to the client. Appeal to the valuation tribunal within 4 months of challenge decision
What if the client complained that the reduction wasn’t good enough?
You would discuss that this is all that could be achieved and refer to other achieved savings/ appeals in progress on the estate
Who appears at the valuation tribunal
Clerk
Chairperson - deciding vote
2-3 person panel
Appelant
*special cases = president of tribunal like in shoosmiths (Gary garland)
They are voluntaries
Who is your duty to in tribunal?
The tribunal
If you took this case to the tribunal what would you be appearing as?
Expert witness (duty to tribunal to give evidence) & at the same time you are an advocate (legal argument who has duty to the client)
Under RICS guide for expert witness can you charge a conditional fee based on a % of savings?
Yes and no…
When permitted in lower tribunals, where a surveyor acts in a dual role As both expert
witness and advocate, a conditional fee arrangement may be entered into BUT YOU MUST DECLARE IT
Otherwise it is not permitted - idea is that the ex witness will be influenced by the fee basis and will therefore not fulfil true duty to the tribunal
What are the stages of higher appeal?
Tribunal
Upper tribunal - The Upper Tribunal primarily, but not exclusively, reviews and decides appeals arising from the First-tier Tribunal.
court of appeal - civil The Court of Appeal is the highest court within the Senior Courts of England and Wales, and deals only with appeals from other courts or tribunals.
Supreme Court - decisions have the most weight at this stage
How did you measure the property and why did you choose this unit of measurement?
GIA AS USED IN THE RATING ASSESSMENT
measures the gross inside of the external walls.
Include: columns, lift wells, mezzanine (with permanent access) & loading bays (as well as any partitioning, internal structural walls etc.)
Exclude: canopies, fire-escapes & covered ways
What are the thresholds for small business rates relief?
You will not pay business rates on a property with a rateable value of £12,000 or less, if that’s the only property your business uses.
For properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.
- normally only awarded if this is your main business premises BUT there you can still get SBBR if the total rateable value of all your properties is less than £20,000
What other methods of rental analysis could you have used?
VOA often use DCFs albeit normally for more complicated deals
Can you explain the hierarchy of evidence in lotus and delta
‘(1) Where the hereditament which is the subject of consideration is actually let that rent
should be taken as the starting point.
(2) The more closely the circumstances under which the rent agreed both as to time, subject
matter and conditions relate to the statutory requirements contained in the definition of Gross
Value in s.19(6) of the General Rate Act 1976 the more weight should be attached to it.
(3) Where rents of similar properties are available they too are to be properly looked at
through the eye of the valuer in order to confirm or otherwise the level of value indicated by
the actual rent of the subject property.
(4) Assessments of other comparable properties are relevant. When a valuation list is
prepared these assessments are to be taken as indicating comparative values estimated by
the Valuation Officer. In subsequent proceedings on that list therefore they can properly be
referred to as giving an indication of that opinion.
(5) In light of all the evidence an opinion can then be formed of the value of the appeal
hereditament, the weight to be attributed to the differing types of evidence depending on the
one hand on the nature of the actual rent and on the other hand, on the degree of
comparability found in other properties.
(6) In those cases where there are no rents available of comparable properties a review of
other assessments may be helpful but in such circumstances it would be clearly more
difficult to reject the evidence of the actual rent.’
How do you set up the instructions from
Outset ?
- completed conflict of interest
Consider your competence!! - Issued terms of engagement
- Client signed terms
- i engaged in client call to understand objectives
Did you consider the repair of the property when undertaking the valuation?
Rateable value represents the rental value of a property if it was let at the standard valuation date on the basis that the tenant pays for all repairs during the letting. The definition includes an assumption that the property is let in a state of reasonable repair.
How did you account for the lack of heating?
I completed my valuation for a letting which was for a property that did not have heating.
I understand that the valuation could be written up differently to add on xx for heating and then adjust downwards to reflect this
