Valuation Techniques And Issues 2

Question 1

What is the Annual Tax on Enveloped Dwellings?

Answer 1

It aims to stop on-shore and off-shore individuals from using companies to avoid SDLT for residential property.

Question 2

What is the current threshold for the Annual Tax on Enveloped Dwellings?

Answer 2

The current threshold is £500,000.

Question 3

How often are revaluations required for the Annual Tax on Enveloped Dwellings?

Answer 3

Revaluations are required every five years.

Question 4

What should you do if you intend to undertake work on a party wall?

Answer 4

You must inform all adjoining owners of your intention to undertake any work on the party wall.

Question 5

What is the RICS Guidance Note related to Rights to Light?

Answer 5

There is an RICS Guidance Note: Rights of Light, 2016.

Question 6

How is a right to light established?

Answer 6

The right to light arises after twenty years of uninterrupted enjoyment of light without the consent of a third party by way of an easement with a prescriptive right.

Question 7

What can happen if a right to light is infringed?

Answer 7

An injunction can be granted, or damages awarded.

Question 8

What landmark case is associated with Rights to Light?

Answer 8

A landmark case is HKRUK II (CHC) Ltd (a subsidiary of Highcross) v Heaney (2011).

Question 9

What was the outcome of the HKRUK II case?

Answer 9

Highcross was left with a remedial works bill and a mandatory injunction to reduce the scale of its extended Toronto Square scheme in Leeds.

Question 10

What is the RICS Consumer Guide related to Rights to Light?

Answer 10

It was published in April 2022 for home-owners.

Question 11

What is a surrender and renewal valuation?

Answer 11

It occurs when the landlord/tenant wants a surrender of the existing lease and agrees to grant a new lease simultaneously.

Question 12

What is required for surrender and renewal valuations?

Answer 12

Calculation of a premium to reflect the change in the value of the leasehold interest.

Question 13

What does the Charities Act 2011 require regarding asset disposal?

Answer 13

Trustees of a charity must obtain a valuation prior to the disposal of an asset in accordance with Section 119.

Question 14

What changes did the Charities Act 2022 introduce?

Answer 14

It made changes to the legal requirements for disposing of property and land, effective from June 2023.

Question 15

What must the report confirm when a charity disposes of an asset?

Answer 15

The report must confirm that the charity has obtained the best terms for the transaction.

Question 16

What does the new Charities Act simplify?

Answer 16

It simplifies the requirements for the report and widens the categories of potential advisers charities can use.

Question 17

How does Red Book Global define a special buyer?

Answer 17

A particular buyer for whom a particular asset has special value because of advantages arising from its ownership that would not be available to other buyers in a market.

Question 18

What could generate special value in a transaction?

Answer 18

Special value may arise from the physical, functional, or economic association of the property with some other property.

Question 19

What is an example of a special purchaser?

Answer 19

A tenant purchasing their freehold interest.

Question 20

What are building cost reinstatement valuations used for?

Answer 20

For building insurance purposes.

Question 21

What should be included in building cost reinstatement estimations?

Answer 21

Add VAT, demolition costs, professional fees, planning and building regulation fees, and inflation allowance if applicable.

Question 22

Is a replacement cost figure for insurance purposes a ‘written opinion of value’?

Answer 22

No, it is not a ‘written opinion of value’ so Red Book Global compliance is not required.