Submission Questions Flashcards
What are the RICS Rules of Conduct?
- Be honest and act with integrity
- Maintain professional competence.
- Provide good quality and diligent service.
- Treat others with respect and encourage diversity and inclusion.
- Act in the public interest, take responsibility for your actions and maintain public confidence in the profession.
Provide an example of being honest and acting with integrity.
Was asked by an agent to attend a rugby match but as we were currently tendering for marketing agents, I declined.
Provide an example of maintaining professional competence.
Roof leak in warehouse - advised client to contact building surveyor.
Provide an example of providing good quality and diligent service.
I have quarterly asset management meetings with the client to discuss progress and ensure we are still working towards their objectives.
Provide an example of treating others with respect and encouraging diversity & inclusion.
Within my area of work, I liaise with lots of different agents, colleagues, contractors and ensure I always treat everyone with respect and fairly.
Provide an example of acting in the public’s interest and taking responsibility.
….
What are some examples of professional obligations members must adhere to?
CPD requirements
Cooperate with the RICS when requested.
Promptly provide information reasonably requested by the Standards and Regulation Board.
What are some examples of professional obligations firms must adhere to?
CHP - including APR provider and complaints log.
PII
Sole principal must make appropriate arrangements for professional work to continue if they die/inability to work.
Cooperate with RICS
Promptly provide information reasonably requested by the Standards and Regulation Board.
Display on business literature, in accordance with RICS published policy, that they are regulated by RICS.
Report to RICS any matter required under Rules for the Registration of Firms.
What is the role of the RICS?
Maintain highest standards of education & training.
Protect consumers.
To be the leading source of info and independent advice.
Why do you want to be a Chartered Surveyor?
- Status
- Recognition
- Market advantage
- Knowledge
- Network
What are the ethical principles the RICS Rules of Conduct are based off?
Honesty
Integrity
Competence
Service
Respect
Responsibility
What did you learn in the Conduct Rules, Ethics and Professionalism webinar series?
What integrity means to me - being honest and having strong moral principles.
What a conflict of interest is.
The rules of conduct
What is the Bribery Act 2010?
Came into effect July 2011 and aims to combat bribery both within the UK and abroad and applies to individuals and companies.
What are the six key principles of the Bribery Act 2010?
- Proportionality
- Top-level commitment
- Risk assessment
- Communication
- Monitor and review
- Due diligence
What is a bribe?
Giving, offering, promising or receiving a gift/payment/service in exchange of an action which is illegal / breach of trust.
e.g. Being offered hospitality or money in exchange for appointing an agent on a sale/letting.
What are the penalties for bribery?
Max 10 years in prison or an unlimited fine.
Policed by Serious Fraud Office.
What are the four offences of the Bribery Act 2010?
Bribing
Receiving a bribe
Bribing a foreign public official
Not preventing bribery
What is the Misrepresentation Act 1967?
Provides remedies to individuals who have entered into a contract based on a misrepresentation.
How do you comply with the Misrepresentation Act 1967?
Take proactive steps to ensure that all statements and information I provide are accurate, honest, and not misleading.
Include a disclaimer in marketing particulars that states that brochure have been produced in good faith and are believed to be correct.
What was the specification of the industrial unit in Dartford?
30,000 sq ft. industrial unit.
Steel portal frame - low level brick and high level cladding.
5.5m eaves
50% site cover
1960s build
What was the specification of the industrial unit in Braintree?
80,000 sq ft industrial unit
Steel portal frame - metal cladding.
14m eaves height
40% site cover
10 dock level doors and 2 level access doors
2006 build
Talk me through the property management inspection at Braintree.
- Ensured I was competent to inspect the building.
- Obtained lease docs and property details.
- Contacted site manager to request access and confirm PPE requirements.
- Informed colleague of my whereabouts.
- Checked in with site manager on site.
- Completed an internal and external inspection of the building.
- To the rear west of the unit, I noticed some cracking along the concrete floor slabs.
- Took photos and noted location.
- Informed the client and recommended a structural engineer was appointed to investigate the cracking and provide a solution.
Was due to subsidence - a special resin was injected into the cracking to restrengthen the foundations below ground.
What is the RICS Complaints Handling 2016 Professional Guidance?
Sets out the requirements and best practices for RICS-regulated firms and members in dealing with client complaints.
All RICS-regulated firms must have a written CHP that is easily accessible and clearly communicated to clients.
What should be included in a Complaints Handling Procedure?
How complaints can be made.
Who will handle the complaint - Complaints Handling Officer
Expected timescales for a response.
Details of the alternative dispute resolution (ADR) mechanism.
MUST BE INCLUDED IN TofE.
How should a complaint be made?
In writing and include details of the complaint included who, why, when, what.
What is the timescale of a complaint?
Acknowledged within 7 days.
Respond within 28 days.
What happens if the complaint cannot be resolved internally?
Client has the opportunity to take complaint to an independent redress provider who will undertake an impartial review.
- The Property Ombudsman (TPO)
- The Ombudsman Services: Property
- The Centre for Effective Dispute Resolution (CEDR)
How can you avoid a complaint?
Providing good quality service by understanding client’s expectations and objectives.
Good record keeping.
Good communication.
Adhere to RICS Guidance and Standards.
Maintain professional competence.
What was the specification of the industrial unit in Rotherham?
125,000 sq ft
Steel portal frame and metal cladding
10.6m eaves height
40% site cover
11 dock level doors
3 level access doors
1980s build
What was included in the enquiries schedule for Rotherham letting?
New enquiries - including size, tenant’s operations, tenant’s agent details, when they require occupation, any update.
How did you ensure the information was accurate in the enquiries schedule for Rotherham letting?
Verified details with agent.
Why is it important to have clear and concise communication skills?
Building client trust and confidence
Preventing misunderstandings and disputes
Demonstrates professionalism
What are different types of communication?
Written - email, letter etc.
Verbal - calls, teams, in person
What are the limitations of written communication?
Can lead to misinterpretation.
Lacks tone - can come across cold and rude.
Lack of personal connection.
Time delay.
Difficulty in conveying complex ideas.
What are the benefits of written communication?
Permanent record and documentation.
Ability to review before providing advice/response.
Professional and formal tone.
What are the limitations of verbal communication?
Lack of permanent record.
Limited time for reflection before responding.
Lack of complexity and detail
What are the benefits of written communication?
Immediate clarification and feedback
Personal connection and rapport
Enhanced negotiation opportunities
Efficient in time sensitive situations.
What was the specification of the industrial unit in Northampton?
50,000 sq ft
Steel portal frame and metal cladding
6m eaves height
1980s build - 2018 full refurb.
30% site cover
8 level access doors and 2 dock level doors
Talk me through the inspection at Northampton
- Ensured I was competent to inspect the building.
- Obtained lease docs and property details.
- Contacted site manager to request access and confirm PPE requirements.
- Informed colleague of my whereabouts.
- Checked in with site manager on site.
- Completed an internal and external inspection of the building.
- To the rear of the yard, I noticed lots of scaffolding. I asked the tenant who informed me they had sublet part of the yard to a
local scaffolding company. - Took photos and noted location.
- On return to my desk, I asked the tenant to provide the agreement in place and checked the lease.
- Informed the tenant that subletting without prior landlord’s consent was a breach of the lease.
- Informed the landlord and recommended a solicitor should issue a statutory notice informing of the breach and a method of
rectification. - Solicitors were then instructed to document the sublease.
What was the specification of the industrial unit in Wigan?
30,000 sq ft
Steel portal frame - brick elevation and metal cladding
7m eaves
2003 build
2 level access doors
50% site cover
Talk me through the rent review at Wigan.
- Checked I was competent.
- Requested legal pack, including lease, license for alterations etc.
- Read lease and check if time is not of the essence, look at rent review clause, assumptions / disregards.
- Set up meeting with client to understand objectives.
- Undertake inspection and measurement
- Get comparables.
- Provide written recommendation to LL.
- Service notice on tenant
- Negotiated.
- Agreement - signed rent review memo £7.40 per sq ft.
What is the RICS Surveying Safely 2018 Guidance Note?
Provides essential advice and guidelines to ensure the health and safety of RICS members and firms when undertaking surveying activities.
What are some key guidelines in the Surveying Safely guidance?
Risk Management
PPE
Surveyor Responsibilities and Duty of Care
Legal and Regulatory Compliance - Health & Safety at Work, 1974
Safe Use of Equipment
Mental Health and Wellbeing
Emergency Procedures and Incident Reporting
Training and Competence
What PPE do you use?
Hard hat
Steel cap toe boots
Hi-Vis
Safety glasses
Ear defenders
What was the specification of the industrial unit in Faringdon?
200,000 sq ft
6m eaves height
1990s build
12 roller shutter doors
65% site cover
Steel portal frame with metal cladding.
What did you include in the pre-assessment of the industrial unit in Faringdon?
Identify type of inspection - e.g. agency inspection
Potential hazards - heavy machinery, forklifts, weather etc.
Risk level - likelihood & impact
Control measures - PPE, access
Emergency measures - e.g. emergency contact and first aid
What was the specification of the industrial unit in Southall?
100,000 sqft
10m eaves
1980s build
13 dock level doors and 4 level access doors
40% site cover
Steel portal frame
How was the asbestos dealt with at Southall?
During roof replacement, following the Control of Asbestos Act 2012, the contractors undertook a refurbishment asbestos survey and samples were taken.
Asbestos was identified and a management plan was produced.
The appropriately qualified contractors safely disposed of the asbestos roof and air monitoring reports were done on a weekly basis to ensure the roof void was safe for construction workers.
What should be included in a set of company accounts?
Chairman’s statement
Independent auditor’s statement
Income statement / P&L
Balance sheet
Corporate Governance Report
Remuneration Report
What is the difference between a P&L statement & balance sheet?
P&L - shows a company’s profitability on an annual basis.
Revenue, expenses, profit.
Balance sheet - shows what a company owns and owes on a certain date.
Assets + Liabilities = Equity
What is covenant strength? Why is it important?
Shows if a company is financial stable and the risk factor associated.
Provides an understanding of the reliability of a tenant in meeting their obligations under a lease agreement
What is a D&B rating?
Split into 2 - 5A and 1
N-5A = Financial Strength
1-4 = Risk Factor
What is the profits test?
A tenant is to provide 3 consecutive years of accounts.
The profit, for each set of accounts, must be three times the annual rent, SC and insurance + VAT.
What if a potential tenant fails the profits test?
Potential to agree a rent deposit - e.g. 6-12 months.
Why is business planning important?
- Sets clear objectives & goals.
- Helps managers make informed and strategic decisions.
- Enhances risk management
What should be included in a business plan?
Business description
Market analysis
Competition analysis
Detail of company structure
Objective & goals
Strategy
What is your company’s business plan?
Short term - complete outstanding AM.
Long term - realise value in the completion of AM. (turn short term income into long term income)
What is a SWOT analysis?
Strengths, Weaknesses, Opportunities, and Threats.
It helps organisations understand internal and external factors that can impact success and make informed decisions.
What are the UK GDPR (General Data Protection Regulation 2018) and Data Protection Act 2018?
Replaced Data Protection Act 1988
Incorporates GDPR into UK law, ensuring data protection rules align with EU regulation.
Provides a framework for processing personal data in the UK.
Provides people the right to be informed about how their information is used.
How do you comply with UK GDPR and the Data Protection Act 2018 in
your role?
Explicit Consent must be freely given and informed.
Ensure that you only collect the minimum amount of personal data required for the purpose you are processing it.
Ensure data is kept secure - include using encryption, strong passwords and two factor authentications.
What are the key rights under the GDPR?
- To be informed
- Access
- Rectification
- Erasure / forgotten
- Restrict processing
- Data portability
- Object
What is personal data?
Personal data – info that can identify an individual
Relates to sensitive personal data – racial/ethnic origin, political/religious beliefs, sexual orientation.
What is CoStar?
Global data platform for commercial real estate information, analytics and news.
What is Land Registry?
Records and maintains information about land and property ownership.
e.g. title register, title plan, and leases.
What are the principles of GDPR?
Lawfulness, fairness & transparency
Purpose limitation
Data minimisation
Accuracy
Storage Limitation
Integrity & Confidentiality
Accountability
Why is it important to have a diverse and inclusive environment?
A more diverse team is more likely to be a success.
Why? Different experiences, thoughts and ideas result in good decision making.
Innovation, creativity, employee engagement & retention.
What are the different types of discrimination?
Direct – treating less favourably because of a protected characteristic.
Indirect – application of a provision/practice that disadvantages a protected characteristics – unless it can be justified.
Harassment – unwanted conduct that violates someone’s dignity or creates an intimidating / offensive environment.
Victimisation – treating someone badly because they have made/supported a complaint under the Equality Act.
What is your company’s policy in avoiding unconscious bias?
Raise awareness through training
Implement structured and standardised hiring processes.
Promote flexible work and accessibility
What is unconscious bias?
Relates to associations that are deeply ingrained and outside of our conscious awareness/control.
What is the Equality Act 2010?
Aims to protect individuals from unfair treatment and promote a fair and equal society.
Simplify framework to understand and enforce equality rights and protection.
What are the protected characteristics in the Equality Act 2010?
- Age
- Disability
- Gender
- Marriage / civil
- Pregnancy
- Race
- Religion / belief
- Sex
- Sexual orientation
What is an inclusive environment?
An environment that is designed and managed to allow people with a diverse range of needs and abilities to access & use it.
THROUGHOUT THE PROPERTY LIFE-CYCLE.
Provide some examples of an inclusive environment?
Prayer room
Lifts
Disabled access
Breakout/therapy rooms
What is sustainability?
Sustainability is meeting the needs of the present without compromising the ability for future generations to meet their own needs.
Involves careful resource management and minimising environmental harm
What are the MEES 2015 requirements?
Minimum Energy Efficiency Standards
All leases from:
1st April 2023 – minimum E rating
1st April 2028 – minimum C rating.
1st April 2030 – minimum B rating
What are the penalties for MEES non-compliance?
Under 3 months - £5,000 or 10% of RV (up to 50k)
Over 3 months - £10,000 or 20% of RV (up to £150k)
What are the three types of inspection?
Valuation
Property Management
Agency
What should you consider when inspection for valuation purposes?
Factors that influence value -
Location
Tenure
Construction
Defects
Current condition
Occupation details.
What should you consider when inspection for agency purposes?
Factors that influence marketability:
Current condition
Repair/maintenance issues
Services
Presentation & flexibility
What should you consider when inspection for property management purposes?
Policing the lease:
Lease compliance
Statutory compliance
State of building, requirement for repair/decoration
Use & details of occupier
If vacant - any maintenance, safety & security issues.
What should you note on an external inspection?
Method of construction
Repair/condition.
Car parking, access, loading arrangements.
Defects/structural movement
Site boundary
What should you note on an internal inspection?
Layout / specification
Repair and maintenance.
Defects
Services – age & condition
Stat compliance – asbestos, building regs, H&S, Equality Act 2010,fire safety.
Fixtures, fittings & improvements.
Compliance with lease obligations.
What should you note on an inspection of the local area?
Location, aspect, local facilities, public transport.
Contamination, environmental hazards, flooding etc.
Comparable evidence – local market conditions and marketing boards.
What is the four step process of an inspection?
- Consider personal safety – firm’s H&S procedures.
- Inspection of local area.
- External inspection
- Internal inspection
Talk me through the inspection of the industrial unit in Dartford.
- Checked I was competent to undertake inspection.
- Pre-inspection assessment - location, contact, PPE, risk assessment.
- Informed team of whereabouts.
- Met with site manager and checked in.
- Firstly undertook an external inspection, making note of building condition, access arrangements, site boundary.
- Then undertook an internal inspection, making note of layout, specification, services, defects etc.
- Measured unit on a GIA basis.
- Then drove around estate, making note of available units nearby and their agents details.
Talk me through the desktop study done for the industrial unit in Faringdon.
Talk me through the routine property inspection of the industrial unit in Melton Mowbray.
The vacant industrial unit was 300,000 sq ft.
During a routine monthly vacant property inspection, I noticed part of the flashing on the roof was missing. Most likely due to high winds experienced over the weeks leading up to the inspection. I took photos of the damage and made note of the location.
Once back at my office, I contacted three roofing contractors to obtain a quote to fix a new section of flashing. A local company, who knew the site well and provided a competitive quote, were recommended to the client.
What is flashing?
A thin, waterproof material, often metal, used to seal joints and areas where the roof meets the vertical.
What was the specification of the industrial unit in Hinckley?
40,000 sqft
Built in 2021
40m yard depth
8m eaves height
2 level access doors
Tell me about the inspection at the industrial unit in Hinckley.
- Checked I was competent to carry out inspection for agency purposes.
- Obtained floorplans of the building and completed a desktop investigation of the site and location.
- Arranged access with the landlord and checked PPE requirements.
- As part of the lone working policy, I went with a senior colleague.
- Firstly, made note of any lettings board nearby and also made note of neighbouring tenants.
- On arrival, I undertook an external inspection of the building - making note of the condition, access, specification and any areas that could be improved for marketability.
- Then undertook an internal inspection, including measuring the unit on a GIA basis, and made note of the condition, facilities and tenant’s fit out.
- After, I contacted local agents to understand of any recent deals.
- Prepared a marketing report, including recommendations of how to improve marketability of building, any current competition, any requirements we were aware of and my view on market rent.
What was the specification of the industrial unit in Melton Mowbray?
300,000 sq ft.
8m eaves
19 level access doors and 2 dock level doors
50 kN/m2 floor loading
500KVA power
1980s build
What is the RICS Property Measurement 2nd Edition 2018?
Following advancement in IPMS (International Property Measurement Standards), the RICS updated the Property Measurement standard to reflect the adoption of IPMS for office and residential buildings.
What is IPMS and why was it introduced?
International Property Measurement Standards.
Introduced to address the lack of consistency and transparency in property measurements worldwide.
It ensures measurements are consistent, reliable and transparent globally.
What is IPMS 1?
Most similar to gross external area.
Includes:
- External walls and projections.
- Integral garages and conservatories.
- All floors, including basements, mezzanines, and plant rooms.
Excludes:
- Open balconies and terraces.
- External areas like parking and gardens.
What is IPMS 2?
Most similar to gross internal area.
Includes:
- Internal structural elements (e.g., columns and walls).
- Staircases, lifts, and internal balconies.
- Service areas (e.g., plant rooms, maintenance zones).
Excludes:
- External balconies and roof terraces.
- Areas not accessible for use (e.g., voids or unmeasurable spaces).
What is IPMS 3?
Most similar to NIA
Includes:
- Offices, meeting rooms, kitchens, and break areas.
- Internal corridors and usable walkways.
- Storage areas that are part of the office.
Excludes:
- Toilets, staircases, lifts, and service areas.
- Structural columns, walls, and common areas.
What basis of measurement do you use for industrial buildings?
GIA
What does GIA include and exclude?
Includes:
- Warehousing and storage areas, production and workshop areas.
- Loading bays and integral garages.
- Mezzanine floors (if permanent and accessible).
- Plant rooms and service areas within the main building.
- Staircases, corridors, and internal structural walls.
Excludes:
- External canopies and loading docks not fully enclosed.
- External areas such as yards and parking.
How did you measure Rotherham / Peterlee ?
- Checked I was competent.
- Obtained floorplans
- Visual inspection to understand layout.
- Used a laser disto to measure to the Internal Dominant Face of the internal perimeter walls, starting at a fixed point.
- Measured the warehouse and ancillary offices on a GIA basis.
- Included columns, stairwells, plant rooms and mezzanines.
- Excluded external walls, canopies, external fire escapes, car parking, yard.
- Also recorded the internal clear eaves height.
- Clearly labelled dimensions on the floorplans.
- Added all measured areas together - although split office & warehouse.
- DOUBLE CHECK
- Measurement report - building address, description, purpose of measurement, method, date and surveyor details, plans, table of measurements.
- Peer review
What is the Code of Measuring Practice 2015?
RICS guidance for measuring for industrial & retail.
Ensures comparability & consistency in property measurement.
What was the spec of the industrial unit in Rotherham?
Warehouse - 100,000 sq ft
Offices - 25,000 sqft
10m eaves
Built in 1980s
40% site cover
11 dock level and 5 level access doors.
Yard depth - 60m
What was the spec of the industrial unit in Peterlee?
80,000 sqft - 10% offices.
2001 build
60m yard depth
8m eaves
5 level access doors and 1 dock level door
40% site cover
What are the standard scales for plans?
1:50 - Room Plan
1:100 - Building Plan
1:1250 - Street / Location Plan
1:2500 - Location Plan
1:50000 - Road Map
How would you measure an office building?
I have limited experience in measuring offices buildings but I would measure on a IPMS 3 basis / NIA.
Used to measure the net usable area occupied by the tenant.
Includes:
Private offices and workstations, meeting rooms and conference areas, kitchens, break rooms, and private toilets and internal circulation areas exclusive to the occupier.
Excludes:
Shared areas like lobbies, staircases, and communal corridors and service areas (plant rooms, maintenance spaces).
How would you measure a retail unit?
I don’t have experience in measuring retail, but I know it is usually measured on a NIA basis for agency purposes and the zoning back principle is included for valuation purposes.
Includes:
Sales floors and customer areas, fitting rooms, internal offices, checkout areas, ad back-of-house storage directly linked to retail use.
Excludes: toilets, corridors, plant rooms, stairwells and areas not directly used for retail functions.
What is the RICS Valuation Global Standards 2024?
Commonly known as the ‘Red Book’, the standard establishes mandatory practices and guidance for RICS members/firms conducting valuations worldwide. It provides consistency, transparency and professionalism in valuation practice.
Why was the Red Book updated?
Alignment with International Valuation Standards
Integration of ESG factors in valuation
Addresses advancements in data management and technology - including valuation modelling.
What changes were made to the UK National Supplement (Valuation)?
Following review by Peter Pereira Gray - raised concerns around reliability, independence and market dynamics.
Valuer rotation policy:
Single ‘responsible valuer’ must rotate after 5 years.
Firm must rotate after 10 years.
3 year min before re-engagement.
Preventing client’s influence in valuation:
must keep note of discussions with client on draft valuations - e.g. information provided by client, how the information was used to change/not change valuation, reasons why the valuation changed/didn’t change.
What are the five methods of valuation?
Comparable
Investment
Profits
Depreciated Replacement Cost
Residual
When would you use the comparable method of valuation?
Often used to establish market rent for agency purposes.
To establish market rent and yields for investment method.
When would you use the investment method of valuation?
When there is an income stream to value.
Rental income is capitalised to produce a capital value.
What are two types of investment method of valuation?
Term & Reversion - used for under rented properties.
Hardcore - used for over rented properties.
When would you use the profits method of valuation?
Used where a value of property depends on profitability of the tenant - e.g. pubs, petrol stations, hotels.
When would you use the DRC method of valuation?
Where direct market evidence is limited/unavailable - e.g. for lighthouses, sewage works.
When would you use the residual method of valuation?
To establish the land value on a valuation date using current market assumptions.
What factors can impact a valuation?
Lease terms (term remaining, restrictive covenants, breaks, rent review provisions)
Market conditions - supply demand, market trends, economic factors, market sentiment.
Tenant covenant strength
Location
Spec & condition
Talk me through the valuation of the open storage land in Greenwich.
- Existing mandate with client
- Checked I was competent
- Obtained property docs - lease, title, planning etc.
- Inspected land.
- Market research & assessed comps - had been valued 6 months prior and little market activity since.
- Undertook valuation - rack rented - capitalised income into perp with a suitable yield.
- Passing rent - £4.25 per sqft, NIY 5.25% PC 6.8% Valuation £6.9 million.
- Assisted drafting report
- Reviewed by senior colleague
- Finalised and report signed by registered valuer.
- Issued report to client.
What was the spec of the open storage land in Greenwich?
91,000 sqft / 2 acres
frontage to the River Thames
Concrete yard
Used for open storage and processing of aggregates (raw materials)
What was the spec of the industrial unit in Leicester?
30,000 sqft
40% site cover
1990s build
5m eaves
5 level access doors
Tell me about the valuation of the industrial unit in Leicester
- Existing mandate with client
- Checked I was competent
- Obtained property docs - lease, title, planning etc.
- Inspected land.
- Market research & assessed comps.
- Undertook valuation - under rented - used T&R method. 6% for term % 7% for reversion
- Market rent - £7.25 per sq ft. Passing rent - £6.25 per sqft. NIY 6% RY 7% Valuation £2.65 million.
- Assisted drafting report including a SWOT anaylsis.
- Reviewed by senior colleague
- Finalised and report signed by registered valuer.
- Issued report to client.
How do valuations for secured lending purposes differ to accounts purposes?
Secured lending - focuses on the value of the asset as a security. Requires SWOT analysis and whether it is suitable for lending.
Accounts purposes - reflect fair value for financial reporting - asset can be exchanged between knowledgeable, willing parties in an arm’s-length transaction.
What is the definition of Market Value?
The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction
Where would you find the definitions of MR/MV/FV in the Red Book?
VPS 2 – Basis of Value
What is the definition of Fair Value?
The price that would be received to sell an asset in an orderly transaction between market participants at the measurement date.
What is the definition of Market Rent?
The estimated amount for which an interest in real property should be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s-length transaction.
What is the Landlord & Tenant Act 1954?
Provides security of tenure to commercial tenants.
Allowing them the right to remain in occupation of the premises after the lease expires and to renew their lease, subject to certain conditions.
What grounds does a Landlord have under s30 to oppose a new lease?
a. breach of repair obligation
b. persistent delay in paying rent
c. breach of lease obligations
d. alternative accommodation
e. uneconomic subdivision
f. demolition/reconstruction
g. owner occupation (own for 5 years +)
Do any of these grounds result in compensation to tenant?
Yes - e to g.
1x RV if in occupation for under 14 years
2 x RV if in occupation for over 14 years.
Are you aware of any cases relating to s30?
S Franses Ltd v Cavendish Hotel (London) Ltd in 2018
LL served s25 hostile notice with s30 ground f (redevelopment). Found in tenant’s favour as LL admitted proposed works would not have been undertaken if tenant left voluntarily.
Key principle INTENTION.
If a Landlord wanted to renew the lease with a tenant, how would they go about this?
Serve a non-hostile S25 notice - at least 6 months before but no more than 12 months before.
Notice to include - they would like to renew and proposed new lease terms.
Negotiate terms
Solicitors then draft new lease agreement.
If a tenant wanted to renew the lease, how would they go about this?
Serving a s26 notice - at least 6 months before but no more than 12 months before.
What does Section 24 of LTA 1954 relate to?
The tenant’s right to ‘hold over’ under the expired lease - continuation tenancy.
What is a rent review?
A rent review is mechanism in a lease that allows the landlord to periodically adjust the rent based on prevailing market conditions. This is usually done on a 5 yearly basis.
Usually upwards only - OMR or RPI linked.
Governed by the terms of the lease - rent review clause.
What does time of the essence mean?
Rent review notice must be served within a specified timeframe.
What are some common assumptions and disregards in a rent review clause?
Assumptions
- ready for immediate occupation
- good and substantial repair
- LL & T covenants have been fully complied with
- willing tenant has benefit of any rent free which would be offered in the open market.
- no work has been carried out that would diminish rental value.
Disregards
- tenant fit out works
How can a lease be agreed outside the Act?
Under s38A of LTA 1954 - Landlord and tenant must consent to the exclusion and execute a contractual agreement, confirming the lease is to be outside the act prior to the lease renewal.
What is the difference between an Independent Expert & Arbitrator?
Arbitrator - governed by the Arbitration Act 1996, must use both parties submissions, cannot be sued for negligence, must provide a reasoned award (usually between both parties’ proposals).
Independent Expert - governed by the lease, use experience and judgement, may need to provide reasoning behind their determination, can be sued for negligence, no point of appeal.
Talk me through the rent review for the industrial unit in Driffield.
- Confirmed I was competent.
- Obtain legal pack including lease, LTAs, planning.
- Read lease, and look at rent review clause - checked if time is of the essence and the basis of the review, including assumptions and disregards.
- Confirmed it was RPI linked.
- Checked the calculation to use - multiplied current passing rent by the month’s prior index figure. This was then divided by the base figure. The rent increased from £105,000 per annum to £135,000.
- Senior colleague reviewed calculation.
- Issued to tenant.
- Calculation agreed - RENT REVIEW MEMO SIGNED.
What was the specification of the industrial unit in Driffield?
45,000 sqft
7m eaves
2000 build
20% site cover
Talk me through the lease renewal for the industrial unit in Brierley Hill
- Met with client to understand if they wanted to renew the lease.
- They did, so I drafted a lease proposal which was shared with the landlord for approval.
- Once approved, a s25 non hostile notice was issued to the tenant 6 months prior to lease expiry and the lease renewal proposal attached to notice.
- The proposal - 5 year lease to be granted within the 1954 act, £7.00 per sq ft, same terms as previous, with the addition of a green clause.
- Tenant’s surveyor disputed the rent proposed - proposed £6.10 per sqft.
- Finally settled rent at £6.40 per sqft.
- Solicitors were instructed to complete the lease.
What was the specification of the industrial unit in Brierley Hill?
10,000 sqft
60% site cover
1997 build
6.5m eaves
2 level access doors
steel portal frame - metal cladding elevation and roof.
What was the specification of the industrial unit in Rugby?
130,000 sqft
1990s build
40% site cover
10m eaves
12 dock level doors 1 level access door
Steel portal frame - metal cladding elevation & roof
Talk me through the rent review for the industrial unit in Rugby?
- Confirmed I was competent.
- Obtain legal pack including lease, LTAs, planning.
- Read lease, and look at rent review clause - checked if time is of the essence and the basis of the review, including assumptions and disregards.
- Confirmed it was an open market upwards only review.
- Inspected and measured building.
- Undertook market research - recent lettings in the area.
- Put together a proposal which was approved by a senior colleague.
- Issued to tenant.
- Tenant wanted to settle at £7.30 we wanted to settle at £7.50.
- Agreed at £7.40 per sq ft.
- Rent review memo issued and completed.
What are the different types of agency (leasing)?
Sole agency - one agent appointed to sell/let - own fee
Joint agency - two agents appointed to sell/let - split fee.
Multiple agency - multiple agents appointed to sell/let - agent secured deal gets fee?
Sole selling rights - if a tenant/buyer is found during period of sole selling rights, owed a fee, even if not introduced by yourself. If an agent/buyer is secured that agent introduced but outside sole selling rights period, due a fee.
What is the difference between a lease, assignment, sublease, and license?
Lease - exclusive possession between landlord and tenant for a fixed term.
Assignment - transfer of the current tenants’ interest to a new tenant. AGA.
Sublease - Between existing tenant and subtenant.
License - LL grants tenant permission to use property/land for a specific purpose - right to occupy
What is the Estate Agents Act 1979?
Introduced to promote honesty, accuracy, clarity in TofE, client money handling.
Came into effect 1982.
How would economic trends impact lease terms and value?
When economy is poorly performing, tenants are less willing to take risks.
Demand can fall, meaning rental growth may be stunted.
Less willing to take longer leases - increased demand for break options.
What is the RICS Professional Statement: Code of Leasing Business Premises, 2020?
Mandatory standard for RICS members and regulated firms involved in the leasing of commercial property in the UK. It aims to promote fairness, transparency, and professionalism in lease negotiations.
Example requirements -
HOTs must be agreed and documented prior to issuing lease.
Clearly communicate
Disclose relevant facts and documents to allow for informed decisions
Tenants should be advised to obtain independent professional advice.
What are the Consumer Protection Regulations?
UK regulations aimed at protecting consumers from unfair or misleading business practices.
Prohibits misleading information and actions - all about informed decisions.
Ensure details in marketing brochures are true to the best of your knowledge.
What information did you include in the marketing brochure for the industrial unit in Melton Mowbray?
225,000 sqft
18m eaves
5 level access doors
5 dock level doors
1250 KVA power
20% office content
EPC C
Location
When it was available
What was the specification of the industrial unit in Southampton?
Newly refurbished - EPC B
115,000 sqft
1989 build
40% site cover
Steel portal frame - metal clad elevations and roof.
PV array - 50kwh
8m clear eaves.
What did you include in the marketing report for the industrial unit in Southampton?
Description of the property and location.
Measurement
Market commentary - quoting rents of new builds in area at £15 per sqft for midbox
Macro economic market commentary
Availability in the area
Pipeline availability
Competition
Recent deals done
Recommendations
View on market rent, expected incentives and void period.
Fees - 10% sole agency, 15% joint agency.
What deal was agreed for the letting at Southampton?
20 year lease - no break options
5 yearly rent review - OMV
£11.50 per sqft
5A2 covenant
24 months RF - RF 1st year, half rent for following two years.
What were your client’s objectives for the letting at Rotherham?
Minimum void period
Acknowledged the unit was at a disadvantaged due to the layout, location and condition.
Willing to agree a short-term letting whilst they decided their long term objectives with the assets.
Agreeing a rent at the same or higher than previous tenant, who went into administration.
What is the RICS Professional Statement - Real Estate Management 2016?
Sets of mandatory requirements and best practice guidelines for real estate management professionals - property managers and asset managers.
What are some mandatory requirements from the RICS Professional Statement - Real Estate Management 2016?
Act with integrity
Provide a high standard of service
Ensure client money is accounted for separately
Comply with health and safety regulations.
What is the RICS Professional Statement - Service Charges in Commercial Property, 2018?
Sets out mandatory requirements and best practices for managing service charges in commercial properties.
What are some mandatory requirements from the RICS Professional Statement - Service Charges in Commercial Property, 2018?
Service charges must be transparent and clearly communication to tenants - budgets & reconciliations.
Service charge budgets should be issued annually and on time.
Reconciliations should be completed and issued within four months of SC year end.
Tenant should only be recharged for relevant and appropriate costs.
Clearly explain the basis of apportionment - fair and reasonable.
What is a Licence for Alterations?
Formal, legal document that grants a tenant permission from the landlord to make alterations or improvements to a leased property.
Usually states the alterations should be remedied at lease expiry unless landlord states otherwise.
What are the four methods of sale?
Auction
Informal Tender
Formal Tender
Private Treaty
When would you use auction?
If the client needed to dispose of the asset in a short timeframe.
The property was unusual and difficult to accurately value.
What are the advantages / disadvantages of auction?
Advantages:
Quick and transparent.
Certainty of sale - assuming a reserve figure.
Disadvantages:
Cost of promotion and publicity
Lack of confidentiality over price achieved.
Can’t choose purchaser.
Intensive nature of short marketing period.
When would you use private treaty?
Most transactions - ability to freely negotiate.
What are the advantages / disadvantages of private treaty?
Advantages:
Flexibility
Parties can control the process
Vendor not under any obligation to sell
Confidential
Disadvantages:
Late decisions not to buy.
Abortive costs
Gazumping/gazundering
What is informal tender?
‘best offers’ - used when there is good interest and to bring negotiations to a conclusion.
Not legally binding
What should be included in an informal tender?
Required date / time of receipt of written offer.
Confirmation of finance arrangements
Any conditions
Name of company
Name and details of solicitor
What is formal tender?
Sealed bids - similar to informal but legally binding once offer is accepted.
Contracts immediately exchanged once offer accepted. No further negotiations can take place.
Relatively uncommon - primarily used by public bodies to demonstrate accountability.
