Case Study Questions

Question 1

What do you mean by outstanding lease renewal?

Answer 1

The original lease that the Tenant is holding over on.

Question 2

Can you outline what was included in the HoTs?

Answer 2

• Property (Demise, Outline)
• Lessor and Lessee (Plus Agent and Solicitor details)
• Term
• 1954 Act, In
• Rent (Plus Review mechanism)
• Alienation
• Repairing Obligation
• Permitted Use
• Timescales

Question 3

Can you explain the Net Internal Area basis of measurement?

Answer 3

• Outlined in Code of Measuring Practice 2015
• Used to measure useable space.
• Excludes WCs and Permanent circulation areas
• Includes recessed entrances etc.

Question 4

How did you accurately obtain the NIA for the retail unit?

Answer 4

• Measured with calibrated laser measurer.
• Ensured measurements were from the wall not a partition or shop display.
• Regular measurements throughout.

Question 5

Why did you include the recessed entrance area in the NIA measurement?

Answer 5

• It is useable space
• Outlined in the Code of Measuring Practice 2015.

Question 6

When might you not include an entrance area in NIA measurement?

Answer 6

When the premises is occupied by multiple tenants or the entrance is outside the redline demise of the lease.

Question 7

Did you measure the property yourself?
If so, how do you determine each Zone?

Answer 7

Yes,
I zoned by taking sufficient measurements while on site to carry out a zone analysis.
Each 6.1 metre depths from the front of the store backwards.

Question 8

Can you explain what you mean by a full repairing and insuring lease?

Answer 8

The tenant takes on all of the costs for repairs and insurance for the property being leased from the landlord.

Question 9

How does your firm undertake conflict of interest checks?

Answer 9

There is a central online Conflict Checker system where Instruction information including the property and parties involved are uploaded and distributed to all staff via the system to assess for conflicts.

Question 10

What did you include in your Terms of Engagement?

Answer 10

• Property Details
• Scope of instruction
• Fees (and mechanism) - Payment procedure
• Disbursements
• Complaints Handling
• Professional Indemnity Insurance
• Warranties, liability and indemnities
• ML Regulations 2017

Question 11

Did you do anything prior to your inspection?
Talk me through the process you would go through before going on an inspection.

Answer 11

• Risk Assessment
• Statutory research ( EPC, Business Rates)
• Pre inspection preparation, organising access with tenant, Due Diligence
• Check to see if PPE is required
• Ensure calendar has sufficient detail of timings and who I am meeting.

Question 12

What were the key items you summarised in the existing lease?

Answer 12

• Rent
• Landlord and Tenant Act
• Alienation Clause
• Repairing Obligation
• Term
• Break Options
• Tenants Covenants

Question 13

How did you analyse your evidence to derive ITZA figures?

Answer 13

• Some of the evidence was internal so I had the measurements of these properties
• I used the measurements to get an overall ITZA area which I then divided the annual rent by to get the £ITZA figure
• For other comparables I called the agents to gain ITZA figures and their calculations.

Question 14

Did you receive feedback from your client after you reported ERV, expected renewal terms and timescale for negotiations before you began negotiations with the Tenant? It isn’t clear in your written submission.

Answer 14

Yes, they were happy with the recommendations I made and I negotiated on that basis.

Question 15

In what section of the 1954 Act are interim rents discussed.

Answer 15

Section 24A

Question 16

Would the tenant be able to apply for an interim rent?

Answer 16

Yes, but it is unlikely in this situation. Tenants would commonly do this if the rent went down upon renewal.

Question 17

Can you serve an interim rent given the amount of time that has passed since the expiry of the tenancy?

Answer 17

The interim rent is payable from the expiry of the current tenancy being the earliest date that the existing lease could have been terminated.

• 6 months from the serving of the S25 notice.

Question 18

Did you go into details of the sort of figure the client may need to pay for a capital contribution?
If so how did you assess this?

Answer 18

No we did not.

Question 19

How did you come to the conclusion that the rent free period would commonly be around 3 months?

Answer 19

This is the industry adopted standard rent free provision and would be a suitable ‘contribution’ from my client.

Question 20

What is a schedule of dilapidations?

Answer 20

A document that lists the repairs or improvements that need to be made to a property.
Timing dependant on the type of schedule of dilapidations served.

Question 21

You say you advised the Tenant to instruct a surveyor, did you recommend anything else to them?

Answer 21

To consult a professional and qualified solicitor.

Question 22

Did the tenant have to seek approval from the Barbour store?
If so, what implications do you think this has on the negotiation process?

Answer 22

They did, this slowed down negotiations as they had to seek approval from Barbour before agreeing to lease terms. This was especially relevant for the length of term.

Question 23

How were you sure your measurements were accurate? Did you do anything before you carried out your measurement?

Answer 23

I ensured my laser measurer was recently calibrated and carried out a check measurement on the known distance prior to inspection.

Question 24

What was the time period within which you could conclude the lease renewal negotiations?

Answer 24

6 months from the serving of the section 25 notice.

Question 25

Did you consider speaking to a local estate agent to ascertain whether the passing rent on the residential aspect of the property was let at a market rent?

Answer 25

I spoke to an internal colleague who operates in the residential lettings market in Knutsford and they advised that given the lack of parking and access to the apartment that this was an accurate reflection.

Question 26

Explain what you mean by “the lease renewal entered the legal stage”

Answer 26

Heads of Terms were agreed and provided to solicitors for legal drafting of the new lease.

Question 27

What ITZA rental figure per sq ft did you adopt? It isn’t clear in the written report.

Answer 27

£53.80 , written in the appendix

Question 28

How did you analayse your comparables and did you sort them in any particular order?

Answer 28

Prominence, proximity to the subject, specification. Date of transaction.