SUBMISSION Flashcards
Tell me about your residential comparable valuation in Fulham. What was the guidance note for comparable evidence? (VAL L2)
RICS Professional Standard ‘Comparable Evidence in Real Estate Valuation’ 1st Edition, 2019.
I valued a 1930s flat for IHT purposes.
Utilising the comparable method, I gathered comparable transactions of similar properties in the locality and formed a basket of evidence.
I adjusted and weighted my evidence, and the value returned appeared low.
I inspected the property and recorded its condition and position within the building. I noted that the flat was located on the top floor and it had a mansard roof.
On return to the office, I adjusted the comparable evidence to reflect that the subject had a mansard roof.
I agreed with the value returned and reported to HMRC
Talk me through your valuation of the LPA School in Ealing. What is the guidance note relating to this? (VAL L2)
RICS Professional Standard, Depreciated Replacement Cost Method of Valuation for Financial Reporting, 1st Ed, November 2018.
I dealt with a 2017 Challenge which proposed a reduction, as some of the school now comprised of temporary buildings.
Given the specialised nature of the property and the limited market evidence I utilised the DRC approach.
I determined which buildings had been demolished and replaced with temporary buildings.
I first, calculated the ARC, I adjusted for A&O (at 60%) I added the land value and I applied the statutory decap rate (2.6%) to come to an annual equivalent of capital value i.e. rateable value.
Finally, I “stood back and looked” and concluded that the valuation was reasonable.
What advice did you provide for the Residential/Office property in Ashord? (VAL L3)
RICS Professional Standard ‘Comparable Evidence in Real Estate Valuation’ 1st Edition, 2019.
I completed the valuation of a detached dwelling in Ashford for IHT purposes.
The property was a large, detached building which was being used as an office for the deceased’s firm.
Initially, I utilised the investment method and cross-referenced against similar types of property in the area and decided that it looked too low.
I carried out an inspection and confirmed that the property’s optimum value was as a residential dwelling.
I utilised the comparable method, I gathered sale transactions of similar properties in the locality and formed a basket of evidence.
After adjusting and analysing the comparable evidence, I determined a higher valuation than that returned.
I entered into negotiations with the executors Valuer, advising that due to the location, lack of formal tenancy arrangements, and relevant permitted development guidance.
We agreed on a valuation which I was able to report to HMRC.
What advice did you provide to the Valuation Tribunal?
I provided reasoned advice for a 2017 Rating Appeal where the appellants representative was arguing that a Tyre and Exhaust Centre should be valued as an industrial unit.
The appellants representative proposed that the RV should be reduced in line with industrial evidence.
The valuation approach for Tyre and Exhaust centres is distinct and the subject rent supported the valuation determined by the VOA.
The appeal was dismissed and the existing RV of the appeal property was accepted as correct.
Talk me through your Red Book Valuation in Purley? What guidance did you follow?
RICS Valuation - Global Standards, 31st January 2022.
VPGA 8- Valuation of Real Property Interests.
Upon supervision, I completed a Red Book valuation of a one bedroom flat in Purley for disposal purposes.
I completed COI checks (COI, March 17) and ensured I was competent before issuing a ToE (VPS1) to the client.
I inspected the property measuring to IPMS Residential 3B (IPMS, All buildings, January 23) and noted its condition and VSF within my inspection template (VPS2).
I used the comparable method (VPS5) to find similar transactions in the area to determine the market value.
I drafted a report following the RICS Red Book standards.
A RICS Registered Valuer reviewed and approved the report.
Talk me through the valuation of the retail unit in Harrow. (CL L3)
LGFA 1988.
Lotus & Delta v Culverwell (VO) and Leicester City Council (1976):
I completed the valuation of a ground floor retail assessment in Harrow for rating purposes were a revised Rateable Value was agreed.
The agent submitted a Challenge and sought a reduction in the RV contending that the tone was excessive and out of line with the market rent and the rents on the parade (ED & MD: 17th April 2017).
The subject rent was a NL agreed close to the AVD, therefore I attached great weight to it.
I then gathered, adjusted and analysed a basket of comparable rents, NL and agreed close to the AVD.
I noted that the neighbouring units to the left of the subject were in better location than the ones on the right, which was reflected in their tone.
I also considered settlement evidence and noted that there had been reductions agreed up to 10% in the locality.
Considering the evidence, I advised a senior colleague that the subject was in a break point, and the evidence supported a revised rateable value in line with the passing rent, therefore an agreement was reached with the rating agent and the rating list was updated.
Tell me about the advice you provided for the Deletion in Cardiff? and what case law helped you reach your decision? (LT L3)
LGFA 1988.
Th Court of Appeal and Supreme Court in Newbigin (VO) v Monk (2017)
Jackson (VO) v Canary Wharf Ltd (Upper Tribunal) (2019)
Aviva v Bunyan.
I provided reasoned advice for a proposal to delete a 2017 Rating Assessment due to planned redevelopment works and agreed a withdrawal with the agent.
Initially, I considered the Material Day (2nd August 2021) and the physical factors at that day - the ratepayers representative provided planning documents and photographs of the building in their submission.
However, I was unable to confirm the extent of the redevelopment works from the information provided, therefore I arranged an inspection.
During the inspection, it became apparent that the proposal was premature and no works had began, the hereditament was in beneficial occupation.
The proposal was withdrawn, and the hereditament remained in the 2017 Rating List.
Talk me through your MCC in Staines? (LT L3)
LGFA 1988.
I provided reasoned advice for a 207 Challenge for an MCC consisting of a closure of a department store in the locality.
In support of their 10% allowance, the agent provided a selection of comparable settlements.
The subject rent in the starting point (Lotus & Delta) and no reduction was agreed when the department store was closed.
At the MD (Dec 21), I determined there was a vibrant market which was evidenced by the high demand, rising rental levels and low vacancy rates.
I therefore concluded ythat the vacant store would be quickly re-let at the AVD and I advised that the closure would have no negative effect on the hypothetical rental bid of the subject property.
I also considered the comparable evidence of the agent and gave low weighting due to them being in a different locality, some were a different mode and category and some were evidence from the 2010 list (2008 AVD).
I advised my senior Valuer that no allowance was warranted and issued a DN, this was not appealed.
Case Law (to consider):
Dinwiddy (VO) v Anderson (RA/14/1995) – vacant units have an effect on the rental value of other units in the locality.
Finnis v Priest – Tenant coming fresh to the scene, not concerned with circumstances that may have existed before the date of the letting.
How did you determine an Incomplete Submission? (LT L2).
The Non-Domestic Rating (Alterations of Lists and Appeals) (England) Regs, 2009 - Part 2:
The ratepayers representative had submitted a Challenge for a 2017 Rating List.
On receipt of the Challenge, I noted that the ratepayers representative did not provide evidence to support the ground of the proposal.
I concluded that the proposal did not meet the required content or evidence standards under Regulation 6.
I issued a notice of refusal to the ratepayers representative, in line with Regulation 8, on the grounds that it was an incomplete proposal.
What case law helped you decide to Split the retail unit in Abergavenny? (LT L2).
John Lang & Son v Kingswood (1949)
Gilbert (VO) & Hickinbottom (S) & Sons Ltd (1956)
The ratepayers representative requested to split an office into two units.
They provided lease agreements for the two occupiers, along with plans that clearly distinguished between them.
I reviewed the plans and noted that the occupiers had two clearly definable separate units, each with their own entrance.
I established that the two occupiers were capable of separate occupation, had a single geographical unit and were a single definable position.
I provided reasoned advice to a senior colleague that a split was warranted and issued a Valuation Office Notice to the two occupiers.
Talk me through your residential valuation in Tooting (CT L2).
Wight and Moss v CIR (The Nellie Wight Case)
The Trustees of Land and Appointment Trustees Act 1996 (LTATA 1996).
I undertook an IHT 50% undivided share valuation involving a residential property in London.
I adopted the comparable method and arrived at an entirety figure.
The co-owner resided at the property, therefore having regard to the appropriate case law, I applied a 15% share discounted to the 50% value.
I discussed my valuation with the executor to ensure that they understood and agreed with the proposed value and reported the agreed value to HMRC.
How did you value the mixed use estate in Croydon? (CT L2).
Discounted Cash Flow Valuations Information Paper, November 2023.
Independent Review of Real Estate Investment Valuations, December 2021.
I valued a mixed use estate in Croydon for IHT purpose.
I used the comparable method to determine the value for the residential properties.
The commercial properties were let and the lease terms were provided so I used the investment method of valuation to calculate their capital value at the valuation date.
I completed research of rental evidence within the locality and determined that the properties were let at market rent.
I the capitalised individual rents by a gross yield to arrive at a market value for each of the properties.
I advised a senior Valuer the valuations returned, I advised the executor and reported the figures to HMRC.
What advice did you provide in regard to your valuation of the flat in Fulham.
Comparable Evidence in Real Estate Valuation, 2019.
I provided the valuation for a residential flat in Putney for IHT purposes.
I adopted the comparable method of valuation gathering transaction of of similar properties sold within the locality, close to the valuation date and found that the returned value appeared low.
I arranged to inspect the property and noted that it had been refurbished to a high standard and the value returned didn’t reflect this.
On return to the office, I advised the executor that the comparable evidence presented the value returned to be too low and a revised returned value was agreed and returned to HMRC.
What advice did you provide for the development in Tottenham Hale? (CT L3).
RICS Professional Statement, Valuation of Development Property, October 2019.
Taxation of Chargeable Gains Act 1992.
I completed the valuation of a semi-detached property in Tottenham Hale for CGT purposes, following a connected party sale.
The property formed part of a site with planning permission for a mixed-use development, and the adjoining semi-detached house was owned by the same purchaser as the subject.
Initially, I utilised the comparable method to determine the existing use value.
I then completed market research to assess the GDV of the site using the comparable and investment method.
I used BCIS to calculate and deduct the costs for demolishing the existing structure and building the mixed use development.
As well as deducting associated costs for marketing, agents and professional fees, statutory costs and site prep.
As well as finance on a straight line basis assuming 100% debt compounded over the estimated length of the development. I estimated a conservative length of 12 months at an interest rate of 5%.
I also deduced a profit of 20% and made a contingency allowance of 2.5%.
Following these deductions, I was able to establish the total residual value.
I apportioned the value between the two-semi detached houses on the site and considered special value.
I provided reasoned advice to the agent stating that the development potential had to be considered in the valuation. After lengthy negotiations, the agent agreed with my reasoning and as a result, a higher value was agreed for the property.
What advice did you provide for the dilapidated property in Fulham?
I completed the valuation of a terraced residential property for IHT purposes.
The valuation report provided referenced the property was in poor state of repair and required full refurbishment throughout.
I reviewed the planning history and noted that planning approval had been granted to extended the property.
I utilised the comparable method and identified properties in a similar condition which had sold with the same planning scheme, close to the valuation date.
I inspected the property to confirm the condition and externally inspected the comparable properties.
Utilising the comparable evidence, I arrived at a higher valuation and deducted 15% in line with the Filfield case given the risk that planning permission was not granted at the valuation date.
I then entered into negotiations with the executor, advising that my valuation took into account the significant factor of planning approval obtained after the valuation date.
A revised valuation was agreed upon, which I then reported to HMRC.
What advice did you provide for the residential with land in Finsbury?
I provided the apportionment values for a residential with land in Finsbury for CGT purposes.
I used the comparable method of valuation to value the residential property at the acquisition date (30th March 2016).
I then identified comparable plots of land using EiG.
The comparable evidence identified consisted of single plots of land and individual houses; therefore, I adjusted the evidence to reflect that the subjects were sold as a single entity.
I cross-checked my valuation against the total acquisition cost to ensure they reasonably aligned.
I advised HMRC of my approach and how I arrived at my apportionment in my report to HMRC.
