Valuing Tenants Improvement Flashcards
How do you value improvements under an FBT
Look at the vlaue to a hypothetical tenant.
How would you look at the value holding foe a general purpose storage building built 20 years ago wth a design life of 40 years and what factors would you consider?
Say building is £80,000 it would be worth hald its life so £40,000.
Consider how much a general purpose storage building would cost £100 m/2
The past life of the buildng
Judge its remaining useful life
apply the fraction of remainng useful life to the total fgure of the current build cost
dd adjustment ofr maintenence and cosndiereation of its utility to the holding
Migfhght also consider demoliyion for remval costs
Consider also if there is any floor space removal such as mezzanine which would case a deduction
How do you value a attle shed say it was put up 5 years ago and house 100 fattening aninmals
Assume tenant is going to make a net margin of £85 per head. So say £8,500 benenigt and then £1,000 for maintenence and repairs. Net annual benefit would be £7500
Useful remaining life of life of 25 years
The assessment would be the varied risk to the margin of an incoming tenant over the years
Usually use a percentage of 20,15 or 10%.
Cross check with alternatives practices
How to value a 10 year old dutch barn for straw
outside straw has a 70% value of protected straw
each protected bale of £7
THe barns shelter would be “2 per bale so the benefit for 400 bales is £800
Capitalising that at a 10% rate would gie a capital value of £8,000
Expect useful value being for 40 years then functional life of 30 years. So would reduce value to £6,000
The requirement is to find the fair value of building, consider condition, changes in econimics and development
What are the two methods for valuing tenants pasture
Cost basis or face value
How is the cost basis used
Where no crop has been taken for grazing or mowing,then it will be the basis of costs of materials and operartions prior to it being grazed or mowed. The hypothetical incoming tenant has been saved those costs already has the ley
What is face value
Face value for pasture is once the crop has been taken it is a more foreard looking basis using the expecting unexpired life of the ley its condtion adn futuure productivity. Taking into consideration: whether it is a good seed mixture, it is cleaned for weed, properly managed in sewing . Also consider: cost of grazing agreement across the year, the cost of supervsig anicmals,, figure for current value, cost for remaining years
`How much does a general store cost
£100 m/2
How much does a grainstore usually cost
£200 perqm
What are the statutory provisions for AHA long term Tenancy Improvements
s66
What are the statutory provisions for tenancy short term improvements
part 1 sechedule 8
What are examples of AHA Short term improvements where no consent is required
Clay burning, liming, mole drainage, fertilister
How would a tenant get compensation for a tenants fixture and what section does this relate to
Section 10
The teant may remove ant items before the expiry of two months from its termination providedL
Paid all owing rent an has performed or statisfied all other obilictions
has at least one month before the excerise of the right and termination of the tenacy given the landlarod notice in writing to remove the fixture or building
What happens if the tenant does not remove the item within two months of expiry of teh agreement
tenant loses all rihgt
What can the landlord to claim an item
serve a counter notice in that month to purchase the item
