Case Study Questions

Question 1

What does Section 41 LGFA 1988 do?

Answer 1

Places a statutory duty on me, as a VOA employee, to maintain and compile a fair and accurate rating list.

Question 2

What is a ‘hereditament’?

Answer 2

Section 115 of the General rates Act 1967 defines a ‘hereditament’ as a property that warrants entry in the rating list.

Woolway v Mazars 2015 expanded on this definition stating that to constitute a hereditament it must satisfy 4 rules:
1. Definable position
2. single Occupation
3. single Use
4. single Geographical location

DOUG

Question 3

What Rule of Conduct did you demonstrate when dealing with this case?

Answer 3

All of them:

Rule 1 - acting with integrity and being open and honest. Acting objectively and with impartiality, whilst maintaining my statutory duty - I shared my evidence for transparency.

Rule 2 - maintain professional competence. Ensuring I was capable and had the requisite skills to deal with the case. Knowledge of the warehouse submarket and the locality in question. Conducted my own research to understand rental levels near AVD.

Rule 3 - provide a good quality and diligent service. Making the most informed decision based on application of evidence and relevant case law, aware that it might not be the most popular.

Rule 4 - treat others with respect. The case also lent itself to me dealing with a variety of different stakeholders: VOA colleagues, Agent and Ratepayer. Throughout the course of the Challenge I was respectful and polite.

Rule 5 - act in the public interest, take responsibility, and maintain public confidence in the profession. Demonstrated this by ensuring the correct RV was applied on the property after identifying key issues.

Question 4

You have redacted confidential information regarding the subject property is that correct? WHY?

Answer 4

Yes - I contacted the agent to get permission but did not receive a reply.

Question 5

Which legislation did you consider regarding redacting information?

Answer 5

UK GDPR (General Data Protection Regulation)
CRCA 2005 (Commissioners for Revenue and Customs Act 2005)

Question 6

Describe the subject property?

Answer 6

The subject property was built circa late 1960s (and was later refurbished in 1994) of brick and block construction with partial metal cladding at the front of the premises. It has a pitched metal sheeted roof at the rear, and a flat felt roof at the front of the premises.

The site has a total area of 2,726.63m2 covering ground floor to second floor areas. The ground floor is predominantly warehousing space with an office suite at the front. There is a lower ground floor located at the rear of the property consisting of storage and workshop spaces. There is a mezzanine floor which covers the ground floor warehouse space and both the first and second floor are both office spaces. It is in a reasonable state of repair throughout.

The subject property is located at the fringe of a large, well-established industrial area. It has good transport access to the M5 motorway, with Junction 1 approximately 1.2 miles South-West providing access to the national motorway network. The A457 is adjacent the industrial estate which connects the subject to the nearby locality and Birmingham City Centre which is approximately 1-mile East of the subject. The surrounding area consists of industrial units similar in age and construction type to the subject property.

Question 7

You mention the property being originally built in the 1960s, did you make enquiries as to the presence of asbestos?

Answer 7

Yes - I contacted the Agent and Ratepayer who informed me that there was no Asbestos on site.

Question 8

What is Asbestos?

Answer 8

It is an insulating material, widely used as a building material from the 1950s through to 1999, which causes serious health problems and fatal diseases in the lungs.

Left undamaged and undisturbed it poses no risk to health. However, when it is disturbed or damaged it can release very small toxic fibres which can lodge in the lungs and cause illness.

Question 9

Where can Asbestos be found?

Answer 9

Construction materials, fireproofing, thermal insulation, electrical insulation, sound insulation, decorative plasters, flooring products, ceiling tiles, water tanks, heat resisting materials, etc.

Lagging, roofing, vinyl floor tiles, ceiling tiles, roof felt, concrete spray

Question 10

Name the 3 types of Asbestos?

Answer 10

Crocidolite (crow-sid-o-lite) – blue (most dangerous)

Amosite (amo-site) - brown

Chrysotile (cry-so-tile) - White asbestos is the most common

Question 11

When was Asbestos made illegal in the UK?

Answer 11

Crocidolite (Blue) and Amosite (Brown) were banned in 1985.

Chrysotile (White) was banned in 1999.

Question 12

What is the key legislation regarding Asbestos?

Answer 12

Control of Asbestos Regulations 2012- states a responsible person has a statutory duty to manage existing asbestos in commercial buildings.

It is a criminal offence to fail to comply with the Regulations.

Question 13

How did you ascertain the age of construction was 1960s?

Answer 13

I looked at internal VOA survey details and inspection record sheets from when the property was initially included in the 1995 Rating List.

I cross-referenced this by looking at the Sandwell Council planning portal, including obtaining copies of the subjects planning documents and completion notice.

Question 14

How would you describe a modern industrial vacant-to-let?

Answer 14

A typical retail warehouse, to current institutional specification, may include following:
 Plastic coated steel profiled cladding with brick or blockwork walls to approximately 2m
 Full height loading doors (electrically operated)
 Minimum 8m clear eaves height with 10% roof lights
 Minimum 30 kN/sq. m floor loading
 Painted concrete floor
 Shell and core – common parts completed but sales floor areas are shell for occupier fit out
 3 phase electricity power
 5-10% office content with WCs
 Main services capped off
 Approximate site cover of 40%

Question 15

Did you notice any construction defects at the subject property?

Answer 15

Apart from general wear and tear associated with the age and use of the property, no defects were witnessed. The property was structurally sound and weathertight and was in a reasonable state of repair.

Question 16

What sort of defects would you associate with a industrial property?

Answer 16

Common building defects associated with industrial units include:
1. roof leaks around roof lights (property my age I would have assumed the flat roof may be damaged)
2. damaged cladding
3. cut edge corrosion
4. blocked valley gutters
5. water damage from poor gutters or burst pipes
6. settlement / cracking in brickwork elevation.

Question 17

Was there any Plant & Machinery (P&M) at the property?

Answer 17

Yes, there was Plant & Machinery at the property in the form of: electrical supply, lighting, hot water radiators, gas and water supply etc.

Question 18

So why was this further P&M mentioned not rated?

Answer 18

o Most warehouses are valued on a rentals basis and the basic rate will assume, (within the standard scales) reflections for value of a 400-volt electrical supply, lighting, gas and water supply.
o The presence of heating in the warehouse may or may not be assumed in the scale and so a note of its absence or presence is required.

Question 19

What rateable P&M was present at the property?

Answer 19

A/C
CCTV

Question 20

I can see rateable P&M in your internal photos, in the form of Air Conditioning. What type of A/C system was this?

Answer 20

Either Fan coil system; or VRV system

Question 21

Can you name some of the common types of A/C systems?

Answer 21

o Air Conditioning systems:
 VAV – variable air volume (highest capital cost but most flexible)
 Fan coil – usually 4 pipe (lowest capital cost and good flexibility, but higher running cost)
 VRV – variable refrigerant volume (lower capital costs but higher running and maintenance cost)

Question 22

23) Why were the CCTV cameras rated?

Answer 22

For Rating purposes, and as per the VOA Rating manual, CCTV systems comprising four or more cameras are treated as a ‘system’ and are rateable. Smaller systems should be recorded but will not normally be valued.

Question 23

How many P&M classes are there?

Answer 23

Four Classes of P&M:

Class 1 - ‘power’ i.e. compressors, engines, turbines, storage batteries
Class 2 - ‘heating, cooling and ventilation’ i.e. water heaters, refrigerating machines
Class 3 - ‘movement’ i.e. railway / tracks, lifts, escalators, travelators
Class 4 - ‘structure’ i.e. bridges, tunnels, tunnel supports, viaducts, fixed cranes

Question 24

What class does the A/C system fall under?

Answer 24

Class 2 - ‘heating, cooling and ventilation’ i.e. water heaters, refrigerating machines

Question 25

Are you competent dealing with cases in Smethwick?

Answer 25

I am owing to the experience I have had in inspecting and valuing NDR properties in the West Midlands and surrounding regions, including an array of rating cases in Smethwick. I regularly keep abreast of market knowledge of the West Midlands region, and updates on rating case law. My approach to dealing with cases is comprehensive, as I ensure I collate and rely on property, rental and settlement evidence that is comprehensive and relevant, analysing it and adjusting it comprehensively.

Question 26

What is the CCA process?

Answer 26

Introduced by the Government under the Non-Domestic Rating (Alterations of Lists and Appeals) (Amendment) Regulations 2017, with effect from 1st April 2017, the CCA process simplifies the Business Rates appeal system. The three-stage design provides resolution of issues as early as possible. o CCA process removes cost and time burdens for customers, making it easier to get a swift resolution on their case and removing the need for a full appeal process in most instances. o 3 stage process, which includes:  Check - to ensure factual matters are validated and agreed as far as possible. 12-month deadline. If VO misses deadline, IP has right to Challenge. Deadline for Challenge is 4 months from Decision Notice.  Challenge - allows ratepayer to challenge valuation matters and conclude any outstanding factual matters. Must set out alternative valuation and supporting evidence / reasoning. 18-month deadline. If VO misses deadline, IP has right to Appeal and VO will have probably be barred. Deadline for appeal is 4 months from Decision Notice.  Appeal - allows ratepayer to appeal to VTE. Both sides present arguments to Tribunal. Tribunal provides binding result. Can be appealed to Upper Tribunal (within 4 weeks of VT decision), followed by Supreme Court. VOA has two weeks to comply with order.

Question 27

What grounds were this Challenge submitted?

Answer 27

02 – IP disputes the RV changed in the Rating List

Question 28

On what other grounds can a Challenge case be made?

Answer 28

12 GROUNDS

Question 29

What must a Challenge proposal include?

Answer 29

Proposals must include – name, address, contact details; grounds of proposal; evidence; explanation; identify alteration sought; effective date; date proposal served.

Question 30

What makes an Appeal invalid?

Answer 30

Invalid if – Appeal does not include VO decision, copy of proposal / evidence discussed at Challenge, fee for VTE; if out of time for appeal.

Question 31

The Challenge case was submitted in December 2024, but the Decision Notice was only closed in October 2025. Is such a delay the norm?

Answer 31

The statutory deadlines were adhered to throughout the Check and Challenge stages, with the VOA having an 18-month deadline of which to resolve a Challenge case, and the Agent having a 4-month deadline from being in receipt of the Challenge Decision Notice in which to lodge an Appeal.

Question 32

Why is the Effective Date 01-Apr-2023?

Answer 32

As the Challenge was on the grounds of the 2023 Compiled List entry being incorrect, the start of the 2023 Rating List (01-Apr-2023) was the Effective Date which the alteration/ change was applied to the Rating list for Rates Billing purposes.

Question 33

What is the Material Day?

Answer 33

Material day - day on which physical factors are considered.

Question 34

What is the difference between Effective Date and Material Date?

Answer 34

The Effective Date - Day which alteration/ change applies to the Rating list for Rates Billing purposes, whilst; The Material Date - Day we take into account physical factors of property.

Question 35

Why did you see fit to inspect the property?

Answer 35

Considering the contentions (allowances and base rate), I felt it necessary to not only inspect and familiarise myself with the surrounding locality including surrounding uses, but also to establish the physical state and use of the hereditament (e.g. retailer open to public) as well as noting any value significant factors: construction type; age; condition; access; layout; aspect; and location.

Question 36

Did you carry out a joint inspection with the Agent. If so, why not?

Answer 36

Despite efforts to do so and being fully aware of the positives of doing so (potentially facilitating open dialogue with Agent to expedite the process), a joint inspection could not be undertaken due to diary clashes and time constraints with the Agent.

Question 37

Talk me though the process you undertook throughout the inspection process (from start to finish)?

Answer 37

Four step process to an inspection: 1. Consider personal safety – Conduct Risk assessment; enquiries into H&S site arrangements, PPE checks 2. Inspection of local area 3. External inspection – start with roof and work downwards 4. Internal inspection Inspection of local area:  Location, aspect, business vibrancy, public transport, amenities  Contamination, environmental hazards, flooding, high voltage power lines, electricity substations  Comparable evidence, local market conditions, agent’s boards External inspection:  Method of construction  Repair and condition – describe from roof downwards  Car parking, access, loading arrangements  Defects – structural movement  Check site boundaries – using OS map / title plan  Age the building – ask client, research date of planning consent, Grade Listing at Historic England, Land Registry, local historical records, architectural style, or the architect’s certificate of practical completion Internal inspection:  Layout and specification – flexibility and obsolescence  Repair and maintenance  Defects – structural movement  Services – age and condition  Statutory compliance – e.g. asbestos, building regulations, health and safety, Equality Act 2010, fire safety and planning  Fixtures and fittings and improvements  Compliance with lease obligations

Question 38

What was the industrial measured to?

Answer 38

The warehouse was measured to gross internal area (GIA)

Question 39

What is the definition of gross internal area (GIA)?

Answer 39

As per RICS Guidance Note Code of Measuring Practice (6th edition) 2015, GIA is area of building measured to internal face of perimeter walls at each level.

Question 40

What measurement practice do the VOA adopt for Rating purposes?

Answer 40

For Rating purposes, the VOA adopt the VOA Code of Measuring Practice, which is based on the RICS Guidance Note Code of Measuring Practice (6th edition) 2015.

Question 41

Are there any differences between the two?

Answer 41

VOA adopts RICS CoMP in full, subject to one exclusion – areas of less than 1.5m are excluded in GEA and GIA.

Question 42

What is included in GIA?

Answer 42

GIA Includes: Areas occupied by internal walls and partitions. Chimneys, columns, stairwells, lifts, other projections. Atria and entrance halls with clear height above. Internal open-sided balconies, walkways. Mezzanine floor areas with permanent access. Lift rooms, plant rooms, fuel stores. Service accommodations such as toilets, showers, cleaner’s rooms, changing rooms. Loading bays. Areas with less than 1.5m head height. Garages. Conservatories.

Question 43

What is excluded in GIA?

Answer 43

GIA Excludes: External open-sided balconies, covered ways, and fire escapes, canopies. Greenhouses, garden stores, fuel stores and the like in residential property.

Question 44

Has the VOA adopted IPMS?

Answer 44

Although IPMS is mandatory MHCLG (Ministry of Housing, Communities and Local Government) (the VOA’s client) has requested that measurements for both NDR and CT are done based on the RICS CoMP (6th edition) 2015. On DVS IPMS has been adopted unless specifically not requested by the client

Question 45

Looking at your plan, I see that the property had mezzanine flooring. What is ‘mezzanine’?

Answer 45

Mezzanine – Tenant Added (or 'Independently Supported') First Floor in a Retail Warehouse, defined as an inserted partial storey between two stories, or an inserted intermediate floor or floors within what would otherwise be a single storey

Question 46

Is ‘mezzanine’ flooring not Plant & Machinery?

Answer 46

The Lands Tribunal in Rogers (VO) v Evans [1985] LT 2 EGLR 217; 275 EG 727-728; (Estates Gazette 24 August 1985) decided that a tenant added mezzanine floor is not plant and machinery, but part of the setting and adds value as such. In making his decision, WH Rees FRICS said "I come to the conclusion, therefore ... that the mezzanine floor is part of the building and is rateable. I have no doubt that it adds to the value of the building as the occupier originally took it, particularly for his purposes." Wilkinson (VO) v Edmundson Electrical Ltd (2017) UKUT 0390 (LC): Chipboard decking supported by timber joints on non-rateable racking. Warehouse near Stoke. VT found the decking was not part of the buildings fabric and did not constitute a mezz floor. Considered an adaptation of the racking system. Rogers V Evans 1985 - 2 intercommunicating units on a newly developed site in Barry, Wales. Decided that a tenant added mezzanine floor is not plant and machinery, but part of the setting and adds value as such.

Question 47

Regarding key issue 1, you mentioned that you issued a Transitional Relief Certificate in relation to the 2017 list entry? What is Transitional Relief?

Answer 47

Transitional Relief is a system whereby any increases or decreases resulting from a 5 yearly Rating Revaluation are phased in between rating lists. If rental values significantly alter between the 5-year rating revaluation cycles, ratepayers are not faced with large increases or decreases in rates bills.

Question 48

Any recent legislative changes to Transitional Relief that you are aware of?

Answer 48

Non-Domestic Rating Act 2023 Notable changes are:  Improvement Rate Relief - Removes any additional liability (i.e. increase in RV), created following certain ‘qualifying works’ undertaken on a property. New relief will apply from 01-Apr-2024 and will apply to works completed by 31-Mar 2028.  Rating List Duration - Rating revaluations are now at three-year intervals rather than 5.  Transitional Relief - The upward phasing of liability at a revaluation will no longer need to be funded by a downward transitional scheme (removal of downward phasing).  Duty to Notify - Certain ‘notifiable information’ (e.g. material change) will need to be provided to the VOA within 60 days via online portal. Material Change of Circumstance Provisions - Alterations have been made to the ‘mentioned matters’ in sch 6 para 2(7) LGFA 1988, to include two additional standalone matters: i) Matters affecting the ‘physical enjoyment’ of the hereditament, and ii) Matters ‘physically manifest within the locality’

Question 49

What was the passing rent for the subject property?

Answer 49

5-year lease renewal commencing on 30th November 2019 at a passing rent of £156,000 and on full-repairing and insuring obligations.

Question 50

Any rent review intervals?

Answer 50

No

Question 51

What is FRI basis?

Answer 51

Full Repairing and Insuring - This is a type of commercial lease where the tenant is responsible for all costs of repairs and insurance for the property they are renting from the landlord.

Question 52

The subject rent is 17 months pre AVD. How did the market change in that period?

Answer 52

For large industrial properties the market remained robust and resilient and showed an increase in demand.

Question 53

Did you carry out the adjustment & analysis of the rental evidence?

Answer 53

Yes, using the VOA’s in-house Central Database (CDB)

Question 54

What are the three ways that you, as a valuer could analyse a headline rent?

Answer 54

Analysis of rent-free periods / headline rents: Three approaches: 1. Straight line method 2. Straight line method assuming time value of cash flow using a yield 3. Use of DCF

Question 55

Talk me through how you adjusted & analysed this subject rent to get to your rental devaluation?

Answer 55

o The adjustment centred around the straight-line method. o I then calculated the present value of the rent (using a multiple of the yield/ amortisation rate and the PV of £1), to arrive at the equivalent annual rent over the chosen period of years. o I chose to amortise the adjusted rent over the whole term of the lease, due to there being no break option- meaning that there is security of tenure and thus rental income throughout the whole duration of the lease.

Question 56

Did you account for the mezzanine area within your adjustment and analysis of the subject rent?

Answer 56

Yes - the mezzanine was in situ as far back as 01/04/2017

Question 57

Did you produce an alternative analysis of the subject rent, including the mezzanine within your area ITMS used in your analysis?

Answer 57

Devalues to £78.92/m2 at a revised 2,080.78/m2 ITMS (inc. the mezzanine)

Question 58

Why is a capitalisation/ amortisation rate used when adjusting and analysing your rental transactions?

Answer 58

This yield is essentially the market rate expected for such an industrial investment in the 2023 Rating List and is used to determine the Years’ Purchase single rate multiplier.

Question 59

What was the % capitalisation rate used in your adjustment and analysis of the subject transaction?

Answer 59

A capitalisation rate of 8.5%.

Question 60

Where did you establish the 8.5% yield from?

Answer 60

o This default rate of 8.5% for warehouses stems from the Reval and Market Analysis Team, who co-ordinate and identify the rates adopted for each Bulk Class in each Rating List. o However, in carrying out the necessary due diligence, and aware that these default yields are likely to vary within classes depending on such factors such as: age, location, quality, type of tenant etc. – I verified this rate by examining the market evidence in the West Midlands Industrial sub-market to decide whether this rate was appropriate for the Smethwick locality.

Question 61

Were the rates/ yield adopted for each Bulk Class the same?

Answer 61

No, the rates in the 2023 Rating List adopted for each Bulk Class were different, as follows:  Shops – 8%  Offices – 8%  Warehouses – 8.5%  Factories – 8.5%  Land/ Miscellaneous – 10%

Question 62

What type of yield is this?

Answer 62

All-Risks Yield

Question 63

What is an All-Risks Yield?

Answer 63

An All-Risks Yield (ARY) is the market rate expected for such an investment, reflecting all prospects and risks attached to particular investment. It is calculated as follows: All Risks Yield = Full Open Market Rental Value/Price paid x 100%

Question 64

Why are CDB’s YP multipliers different from Parry’s YP single rate multiplier?

Answer 64

This is because the VOA’ in-house Central Database’s (CDB) default position is to analyse rents Quarterly in Advance.

Question 65

Did you produce an alternative valuation using the Parry’s YP single rate multiplier?

Answer 65

o Yes, I did. This resulted in a slight variation to the YP multiplier and as a result the amortisation rate used to determine the Equivalent Annual Rent. o However, the resultant rental devaluation was in line with the original devaluation.

Question 66

What is the Definition of RV?

Answer 66

o As per Sch 6 para 2 LGFA 1988 - Definition of RV: “…the amount equal to the rent that it is estimated the hereditament might reasonably expect to let for from year to year on three assumptions: i) Tenancy begins on day that RV is to be assessed; ii) Hereditament is in reasonable repair, excluding any repairs, a reasonable landlord would consider uneconomic; iii) Tenant pays all usual taxes, repair and insurance necessary to maintain hereditament to extent to command rent.

Question 67

What is AVD?

Answer 67

Valuation date set by secretary of state used to set level of values to adopt and to compare changes and impact between AVD and MD. reflects all other matters not set at MD, such as: economic levels, value, legislation, market, trends, demand, vacancy rates, voids etc.

Question 68

What is the AVD for the 2023 Rating List?

Answer 68

The AVD for 2023 Rating List is 01-Apr-2021

Question 69

What is the leading case law regarding weighting of rental evidence?

Answer 69

o The case of Lotus & Delta v Culverwell (VO) [1976].

Question 70

Talk me through the case of Lotus & Delta v Culverwell (VO) [1976]?

Answer 70

FACTS - Shop and premises. A shore shop in Leicester whereby 6 propositions regarding the weighting of evidence was considered. Prime shopping street in Central Leicester. Display frontage combined with a side entrance on Market place which was a flourishing commercial market. Was let as a shell for 21 years on full repairing terms. Tenant spent £22,000 on works, of which £13,000 was relevant expenditure related to the rateable hereditament. The Appellant believed the Zone A was £175/sqm from analysis of other shops on the street. The rent paid was higher than others as they were keen to move in and not lose out. The VO used a higher Zone A (shop lifting and pilfering further down depressing rents) o HELD - Assessment to be reduced o 6 propositions established regarding hierarchy and weighting of evidence as a result of the case.

Question 71

What are the propositions established in the case of Lotus & Delta v Culverwell (VO) [1976]?

Answer 71

Propositions of Lotus & Delta are: 1. Subject rent should be starting point 2. Closer comparables are to time, subject and conditions, the more weight attached 3. Other rents should be used where available 4. Other VO assessments of comparable properties 5. Value formed on actual rent and degree of comparability of evidence 6. Where no comparable evidence, subject given most weight

Question 72

As per Lotus & Delta, you had a rent on the subject property 17 months pre AVD. Why did you place little-to-no weight on this transaction?

Answer 72

Little-to-no weight was placed due to the fact the rental transaction was between connected parties, and therefore not reflective of OMV.

Question 73

Regarding the tone contention, you relied upon evidence in the surrounding locality (1-mile radius of the subject) What is meant by the term ‘locality’?

Answer 73

As per K Shoe Shops v Hardy 1983: ‘Locality’ taken to mean area within sufficient evidence to produce a reasonably expected rent and outside which the rent might be different.

Question 74

But do you consider assessments that are within a 1-mile radius of the subject to be a similar locality?

Answer 74

Yes - within 1-mile the localities were very similar. The subject is a large industrial property therefore I had to increase my parameters to find properties of a similar size which were comparable.

Question 75

Is there any current legislation regarding the conjecture surrounding the application of the term ‘locality’?

Answer 75

Is there any current legislation regarding the conjecture surrounding the application of the term ‘locality’? o Barclays Bank Plc and Poundland Ltd v Moore (VO) [2024] – VTE rejected the VO’s contention that the locality of four retail units for the purposes of sch 6 para 2(7) LGFA 1988 was a reasonable walking distance from each retail unit because many people travelled by car or public transport. o Tribunal held that a recently constructed and extended shopping centre 12-20 miles away was in the locality of each of the four subject retail units. o VT put forward general guidance that when deciding whether or not a physical change falls within the locality, the following matters will need to be considered: i) The nature of retail hereditament, since not all hereditaments will be affected to the same extent. ii) If the shop is within a town centre, what is its catchment area and from where is regular clientele drawn? iii) Does the out-of-town retail park serve the same catchment area and does it directly compete for the same customers? iv) Is the retail park within a reasonable travelling distance either by car or public transport from the appeal property?

Question 76

Which piece of evidence did you attribute the highest weighting?

Answer 76

I placed most weight on the basket of evidence but specifically Comp A and Comp 1.

Question 77

Ok, so Comp 3 (devalues to £32.43/m2) has been used to support your current base rate of £36/m2 – considering the presence quantum? What is quantum?

Answer 77

Quantum is predicated on the application of the theory of economies of scale, and that rental values for property drop with size (allowance for buying in bulk in effect).

Question 78

Any case law regarding Quantum?

Answer 78

Case of Trevail (VO) v C and A Modes Ltd [1967], established a three-stage test for quantum:  No presumption in favour of Quantum;  Only comparatively slender evidence is required to establish that the market still allows for quantum in any location;  Once this is done, positive evidence is required in order to displace the assumption of a quantum

Question 79

Why did you feel quantum was demonstrated?

Answer 79

I noticed a pattern the bigger the property the lower the rental level therefore felt it was demonstrated.

Question 80

Comp 4, you have a lease renewal wef November 2022 with a 3-month rent free period commencing January 2022. How did you treat the rent-free period in the adjustment and analysis of this particular transaction?

Answer 80

I deducted 3-months as incentive due to it being a lease renewal therefore would have been ready to be occupied with no additional alterations. This was confirmed by the FOR details.

Question 81

Why did you not take the ‘customary position’ of ignoring 3-months of it for fit-out?

Answer 81

This was because as this was a lease renewal the unit was already fitted out the FOR implicitly stated that the 3-months rent-free period was granted as an incentive to renew.

Question 82

Any recent case law you are aware of regarding taking this ‘customary position’ of assuming a 3-month rent-free period for fit-out?

Answer 82

The recent UT case of Robert Dyas Holdings Ltd v Moore (VO) 2025 held that adoption of a notional 3-month fitting-out period was to be applicable on a case-by-case basis, dependent on the facts

Question 83

What is the leading case law regarding post AVD rental evidence?

Answer 83

Special Eyes Plc v Felgate (VO) 1994: Involved how much weight should be applied to post AVD evidence in a rapidly moving market. Determination was that no evidence is admissible as evidence, but very little weight should be attached to post AVD evidence. Can prove useful in determining how rental values were trending post AVD. Also weight for adjoining shops was reduced as they had been agreed between one landlord and one firm of surveyors – therefore effectively one transaction.

Question 84

From your Summary valuation I can see that the mezzanine storage area was valued at £18/m2. Talk me through the valuation approach when it comes to mezzanine?

Answer 84

In making an appropriate addition for mezzanines, an outline of the recommended approach is:  firstly, to seek rents which already include the value of the mezzanine(s), either the rent on the subject property or comparable rents elsewhere, and  such rents should be analysed to seek to quantify the effect of mezzanine(s) on the rental market being considered, and if no answer is found;  secondly, comparable evidence should be considered, and this includes additions previously accepted or agreed in respect of similarly specified mezzanine floors;  thirdly, where no comparable rental or assessment evidence can be found, an addition generally will be appropriate, ideally calculated using the cost of providing the actual mezzanine(s) installed in the subject property. All costs should be appropriately adjusted to align with assumptions for rating, and  once the actual, and appropriately adjusted, cost of provision is established, this will be converted to an annual equivalent;  lastly, a 'backstop' approach is provided for use in the absence of any more reliable evidence and, however the addition is made (in this case this tends to be a relativity of 0.5 of the main space £/m2 for Mezzanine storage),  to appreciate that the value of mezzanine floors is only one of several value significant factors affecting the hereditament, and as such, should not be treated as a separate issue.

Question 85

The Gnd Flr Area under Supported floor picked up a price of £25.20/m2. Why is this the case?

Answer 85

This is because the ‘backstop’ figure tends to be a relativity of 0.7 of the main space £/m2 for Gnd Flr Area under Supported Floor.

Question 86

I can see on your summary valuation that there was no rateable P&M, why were the CCTV cameras and A/C mentioned earlier not included within your valuation?

Answer 86

They were installed after the compiled list entry therefore needed to be applied via VORs.

Question 87

Had this CCTV and A/C historically been assessed or was this only discovered as a result of your inspection?

Answer 87

This was discovered as part of the inspection

Question 88

Was this CCTV and A/C system installed prior to 01-Apr-2023?

Answer 88

No - installed after this date

Question 89

On your consequential VOR, what figure (£/m2) did you adopt for the A/C system. Where does this figure stem from?

Answer 89

£7/m2 for A/C. Based on years and years of rental analysis. Outdated but accepted backstop figure.

Question 90

What is the evidence process for valuing A/C?

Answer 90

Evidence for valuing AC (established in case law): 1. Comparable rents 2. Comparable assessments 3. If no good evidence, do cost approach 4. Find annual equivalent 5. If unreliable, adopt £7 backstop

Question 91

From your summary valuation I see that you ‘rounded’ down the resultant RV. Why was this the case?

Answer 91

The VOA round valuations to demonstrate that the figure sought in any valuation is an estimate of likely letting value. Adopting an unrounded figure as a rateable value would give a misleading impression of accuracy.

Question 92

Why was a 5% end allowance adopted?

Answer 92

The 5% end allowance is for layout disadvantages prevalent at the subject property.

Question 93

How did you determine that a 5% end allowance was applicable?

Answer 93

o I inspected the property and made note of the layout disadvantages prevalent, particularly in regards to the lower ground floor workshop are at the rear of the property, whereby there was no adequate internal access between the LG area and the main warehouse o I reviewed appropriate property and rental evidence in the locality to see if the market discounts for the particular disadvantages the property had. o I amassed comparable evidence and noted that stand-alone properties with similar layout issues warranted an allowance of 2.5 – 5% for layout. I then used my valuer judgement to establish what % within the range was applicable to the property, and was satisfied that an allowance of 5% was still appropriate.

Question 94

How long did the 5% end allowance run for?

Answer 94

Throughout the duration of the whole 2023 Rating List

Question 95

Would it follow through into the 2026 Rating List?

Answer 95

Yes, although each list has to be considered separately, unless overt changes have been made to the hereditament, the end allowance should remain the same between Rating Lists.

Question 96

Any case law you are aware of regarding end allowances between rating lists?

Answer 96

Barnard & Barnard v. Walker (VO) [1976] - this judgment referred to end allowances and whether changes had been made with regards to layout or access when considering a hereditament, if not, the end allowances should remain the same between rating lists.

Question 97

Did the Agent appeal your Challenge decision?

Answer 97

No

Question 98

What is the difference between an expert witness and advocate?

Answer 98

o As an Expert Witness, your duty is to the VT panel. To present honest, comprehensive and impartial evidence to assist the panel to understand the evidence relied upon and the reasoning for the sought after RV. o As an Advocate, your duty is to protect the VOA’s interests. To increase the chance of succeeding for the VOA by emphasising the strength of the evidence supporting the VOA’s evidence. But never to the point of dis-honesty or mis-leading the VT panel.

Question 99

Is there any RICS guidance relating to expert witness and advocate?

Answer 99

RICS Practice Statement Surveyors Acting as Expert Witness (4th edition) 2014 (amended February 2023) RICS Professional Statement Surveyors Acting as Advocate (2nd edition) 2017

Question 100

Being a graduate valuer, will you be able to act as both an expert witness and advocate in this case?

Answer 100

Able to act in a dual capacity role as Expert Witness and Advocate as the VTE is deemed a form of litigation in the lower courts.

Question 101

Would you be qualified to act as expert witness and advocate if the case went to Upper Tribunal (Lands Chamber)?

Answer 101

No, I would need to be an RICS Registered Valuer to act as expert witness and advocate at Upper Tribunal.

Question 102

What other courts could the Agent appeal to beyond the VT?

Answer 102

o Upper Tribunal (Lands Chamber) o Supreme Court o Court of Appeal

Question 103

What case(s) law relates to assessment of evidence?

Answer 103

o O’Brien v Harwood (VO) [2003] – This Upper Tribunal case considered the weight and relevance of evidence and the establishment of ‘tone’. o Set the propositions that there are three stages leading to the establishment of tone of list, as follows: i) When new rating list, entries will carry relatively little weight. They are the VO’s opinions of value, as yet unchallenged and untested. ii) Over time assessments will be challenged and agreed or determined by VT or UT or accepted by the lack of challenges. iii) Stage reached where enough assessments have been agreed or determined or are unchallenged to establish a pattern of values, a tone of the list. o Futures London v Stratford (VO) [2005] – This case confirmed the 3-stage approach in O’Brien.

Question 104

Why is the Mezz smaller than the AUS space if it is on top of it?

Answer 104

I excluded the area below 1.5m head height as per the VOA CoMP and excluded the fire escape.

Question 105

What did your uplift comps devalue to?

Answer 105

£28.23/m2 to £39.90/m2.

Question 106

Tell me about Comparable A

Answer 106

Question 107

Tell me about Comparable B

Answer 107

Question 108

Tell me about Comparable C

Answer 108

Question 109

What did your tone comps devalue to?

Answer 109

£32.43/m2 to £43.95/m2

Question 110

Tell me about Comparable 1

Answer 110

Question 111

Tell me about Comparable 2

Answer 111

Question 112

Tell me about Comparable 3

Answer 112

Question 113

Tell me about Comparable 4

Answer 113

Question 114

I note that in your uplift comps that they do support the idea that an uplift was warranted, did you take this into consideration?

Answer 114

Yes - however I looked at the whole basket of evidence and this did not suggest an uplift was warranted.

Question 115

How did you identify the quality of the fitout of your comparable properties?

Answer 115

I looked at internal photos that had been taken from previous inspection and compared them with the subject.

Question 116

What was the date and value for your VOR for applying the CCTV?

Answer 116

31/12/2023 - £69,000

Question 117

What was the date and value for your VOR for applying the A/C?

Answer 117

29/02/2024 - £71,000