Questions on Case Study

Question 1

What did the terms of business include? –
What did you do as part of your desktop review

Answer 1

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)

Question 2

Did you carry out a conflict of interest check and which statement would you have used?

Answer 2

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.

Question 3

Did you need PPE at inspection ? – did you inspect alone?

Answer 3

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

Question 4

What did you do as part of your desktop review?

Answer 4

• 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)

Question 5

Can you talk me through how you inspected the property ?

Answer 5

In my experience there are 4 stages to an inspection – these are…
- is there a particular aspect you would like me to focus on?

1. 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
2. Immediate locality – is it near motorways, , flooding risk,
3. Exterior – construction, repair, decoration, eaves height, SITE COVERAGE
4. Interior- Repair, dec, features, specification

Question 6

Can you talk me through how you measured the property?

Answer 6

• 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)

Question 7

What is the demise/ what is the site coverage?

Answer 7

PARKING AREA TO THE front of the unit and then shared yard/ parking area

Question 8

When was the unit vacated? & did you apply for empty rates relief?

Answer 8

Jan 24 - yes 6 months relief granted

Question 9

How old is the property ?

Answer 9

Approx 70 years according to PM

Question 10

What is the EPC rating?-

Answer 10

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

Question 11

what is the main construction?

Answer 11

steel portal frame, internal painted brickwork and concrete floor

Question 12

what is the main risk to repair of steel portal frame?

Answer 12

Cut edge corrosion but none reported at the unit

Question 13

How does the eaves height of 3.14 m compare to modern units?

Answer 13

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

Question 14

What is the site access like?

Answer 14

private secure road into the estate

Question 15

Are there nearby industrial estates?

Answer 15

2 x small estates near chipping norton

Question 16

Who is responsible for the maintaining the area in front of the property?

Answer 16

tenant is resp for space in front of property as falls within demise, LL resp for maintaining estate road (paid through by the SC)

Question 17

What other property types are on the estate?

Answer 17

Range of industrial units – 300 sqm (3000 sq ft ) to approx. 1400 sqm (14,500 sq ft)
Any flood risk- V low risk

Question 18

What is the definition of gross value referred to within the second lotus and delta principle?

Answer 18

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;

Question 19

What are the assumptions of the hypothetical tenancy?

Answer 19

“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.”

Question 20

How did you analyse the chosen comparable unit 4c? – what about the stepped rent?

Question 21

Why do you think the VOA adjusted their val from £60 psm to 58.50?

Answer 21

Due to the lack of heating

Question 22

Was the price for parking reflected in the valuation?

Answer 22

yes included in a val scheme where parking is assumed to be part of the value of the property

Question 23

How else could you analyse the rent if not on a straight line basis?

Question 24

Why do you think it is taking more time for the VOA to respond to your challenge?

Answer 24

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

Question 25

Can you give an example of other piece of rating work you have completed at enstone?

Answer 25

• 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

Question 26

How might the voa write up your valuation differently from what you have done?

Answer 26

£57.50 unadjusted rate then deduct £1.50 for lack of heating.

Question 27

was there a price added in for the W/C?

Answer 27

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

Question 28

If the tenant added heating, sprinklers would this affect the RV?

Answer 28

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

Question 29

Would the voa add an addition for hard surfaced fenced land if it had some?

Answer 29

yes - under the val scheme for this property they would add £8.00 per sq m for fenced and surfaced land

Question 30

What are common types of plant and machinery at industrial premises?

Answer 30

Cranes - fixed (may have solid base but revolve around a pivot) - rateable to extent of the structural parts
Security System (5 cameras or more)

Question 31

If the tenant added a mezzanine how would this affect the RV?

Answer 31

yes would be added on as a separate line entry

Question 32

What is the process if the challenge is not accepted?

Answer 32

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

Question 33

What if the client complained that the reduction wasn’t good enough?

Answer 33

You would discuss that this is all that could be achieved and refer to other achieved savings/ appeals in progress on the estate

Question 34

Who appears at the valuation tribunal

Answer 34

Clerk
Chairperson - deciding vote
2-3 person panel
Appelant
*special cases = president of tribunal like in shoosmiths (Gary garland)

They are voluntaries

Question 35

Who is your duty to in tribunal?

Answer 35

The tribunal

Question 36

If you took this case to the tribunal what would you be appearing as?

Answer 36

Expert witness (duty to tribunal to give evidence) & at the same time you are an advocate (legal argument who has duty to the client)

Question 37

Under RICS guide for expert witness can you charge a conditional fee based on a % of savings?

Answer 37

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

Question 38

What are the stages of higher appeal?

Answer 38

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

Question 39

How did you measure the property and why did you choose this unit of measurement?

Answer 39

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

Question 40

What are the thresholds for small business rates relief?

Answer 40

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

Question 41

What other methods of rental analysis could you have used?

Answer 41

VOA often use DCFs albeit normally for more complicated deals

Question 42

Can you explain the hierarchy of evidence?

Answer 42

‘(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.’

Question 43

How did you set up the instruction?

Answer 43

1. completed conflict of interest
2. Issued terms of engagement
3. Client signed terms
4. i engaged in client call to understand objectives

Question 44

Did you consider the repair of the property when undertaking the valuation?

Answer 44

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.

Question 45

How did you account for the lack of heating?

Answer 45

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