100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Summary * ADVANCED REAL ESTATE (DISTINCTION ACHIEVED) WORKSHOP 1 - 9 REVISION NOTES £5.49   Add to cart

Summary

Summary * ADVANCED REAL ESTATE (DISTINCTION ACHIEVED) WORKSHOP 1 - 9 REVISION NOTES

 363 views  13 purchases

Revision notes on the following: WORKSHOP 1: Site Acquisition: Preliminary Steps WORKSHOP 2 – Managing Environmental Risks WORKSHOP 3 – The Contract WORKSHOP 4 – Planning Permission WORKSHOP 5 – Planning Enforcement WORKSHOP 6 – The Construction and Design Team WORKSHOP 7 – De...

[Show more]
Last document update: 2 year ago

Preview 4 out of 119  pages

  • No
  • All chapters relevant to the 2021 ulaw reading list (2021 commercial property textbook)
  • June 2, 2021
  • January 19, 2022
  • 119
  • 2020/2021
  • Summary
book image

Book Title:

Author(s):

  • Edition:
  • ISBN:
  • Edition:
All documents for this subject (1)
avatar-seller
LPCNOTES2021
CONTENTS

1. SITE ACQUISITION: PRELIMINARY STEPS
2. MANAGING ENVIRONMENTAL RISKS
3. THE CONTRACT
4. PLANNING PERMISSION
5. PLANNING ENFORCEMENT
6. THE CONSTRUCTION AND DESIGN TEAM
7. DEFECTS IN DESIGN AND CONSTRUCTION
8. LEASES: REPAIR, INSURANCE, SERVICE CHARGE
9. LEASES: RENT REVIEW
10.

, WORKSHOP 1: Site Acquisition: Preliminary Steps
METHODS OF FINANCE

1. SHARE CAPITAL

 Where the buyer is a company, it may consider issuing further shares to raise
additional capital to invest in property

 May not be popular with current shareholders as it dilutes shareholdings which can:
 Reduce dividends
 Affecting voting power
 Change capital rights

 Publicly listed company – additional regulations to consider before any such fund-raising may be
considered


2. FORWARD FUNDING AND EQUITY FUNDING

 Institutional investors (pension and life insurance funds) have substantial sums of money
at their disposal for investment

 May invest in property in addition to shares and bonds to maintain a balanced
investment portfolio. This investment may take the form of:

 Simple purchase of an established commercial property that has been let, which will
provide income stream from tenants and capital value increasing

 Take an active part in the development of suitable property

FORWARD FUNDING
 Institutional investor finances the development from the outset, acquiring the land and
paying all construction costs
 Developer is paid a fee for their work and once the development has
been completed and let (to tenants with an agreed covenant strength),
is paid a profit share
 Developer may be prepared to accept a lower profit because there is
less risk to the developer than if it developed the property using its
own funds
 The investor will hope to have paid less for the completed and let
property than if it had waited to buy the property until after the
developer had built and let it

EQUITY FUNDING
 Investor and a developer will form a joint venture company to acquire the
development site and undertake the development

 Investor takes preference shares in order to be assured of a priority return on its
investment

 Investor is participating in profits and losses of the development

, 3. SALE AND LEASEBACK

 Owner-occupier of a freehold property can raise funds against the value of its property and
remain in occupation by entering into a sale and leaseback arrangement

 Freehold interest in property is sold, immediately following completion, the buyer leases
it back to the seller / former owner at market rent

 Former owner can thus raise capital for other purposes and the buyer will
see a return on its capital investment in the form of rent paid by the owner


4. DEBT FINANCE

 Borrow from banks or ‘alternative credit provides’ (insurance companies / debt funds)

 If the debt requirement is large, the debt package will often consist of senior debt, provided
by a single lender or syndicate of lenders that will participate in the senior debt and
mezzanine debt (which will be more expensive and only be repaid once the senior debt has
been repaid), provided by a different lender or lenders

 Attraction of borrowing is:
o May be entitled to tax relief on any loan interest

o Return from investing the cash might be higher than rate of interest it will pay on a loan

, Description Advantages Disadvantages
Joint  Parties enter  Very flexible and  If one party is
Venture into a contract responsive to parties inexperienced, they will not
Contract which sets out individual needs necessarily know what to
the terms of write into the contract
Good for their  If parties already own
simple, well- agreement property, there is no need
defined to transfer the ownership  No separate legal
projects for a  There is no of the site at the start of the entity, so will have
limited time creation of a joint venture unlimited liability in
scale separate legal relation to any losses
entity  Tax transparent – each
party is responsible for
payment of it income tax on  Contract must be
its profits and capital gains detailed as there is no
tax statutory code for
unexpected events
 Relationship is contractual
so less likely to be liable for
 Disposal
actions of another (subject to
inflexibility –
contract)
parties must sell the
property to the end
user.
 NO liability for the defaults
of the other party. Each
of the parties will remain
entirely independent of the  Both parties are
other. liable for unlimited
losses of the joint
venture
 No statutory reporting
requirements


Should the Overall, the Q is do the parties require tax transparency? In other words, separate taxation in
parties use preference to unlimited liability and inflexibility on disposal’?
this
method?

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller LPCNOTES2021. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £5.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

82871 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now

Start selling
£5.49  13x  sold
  • (0)
  Add to cart