This glossary of terms has been composed by FIRST STRATA to provide you with an easily accessible and comprehensive description of the many terms frequently used in all aspects of land sales.
We trust you will find it both useful and informative.
An intangible right over land that does not give the owner present or future physical possession, eg easements, profits a prendre and restrictive covenants.
In an incremental yield analysis this is the internal rate of return calculated on the relationship between the present value of both the individual capital inputs and cash flows of the projects under consideration. See DISCOUNTED CASH FLOW ANALYSIS.
An analytical method in discounted cash flow techniques used to compare the potential of alternative projects. It involves subtracting the present value of anticipated expenditure as discounted according to the risk factor on a smaller project from that of a larger, thereby enabling the incremental return on the difference between the two to be calculated. If this yield exceeds the investor's opportunity cost of capital, then the larger scheme would appear to be the more favourable. See DISCOUNTED CASH FLOW ANALYSIS; OPPORTUNITY COST.
1. A building constructed for the purpose of testing new materials and/or techniques of construction and use.
2. A building providing low-rent space for manufacturing or other businesses which are in their early stages or with limited operating capital. See NURSERY UNIT.
See ENCUMBRANCE.
The protection offered by an insurance contract (policy) whereby, on the occurrence of the risk insured against, eg a fire, the insurer will make a payment sufficient to reimburse the financial loss incurred by the insured. Thus the insured party cannot treat insurance as a possible means of securing profit. Cf CONTINGENCY INSURANCE.
The period under an insurance policy during which the policy holder is entitled to receive compensation for loss, injury or damage arising from an event defined in the policy. See CONSEQUENTIAL LOSS OF RENT.
A deed between two or more parties, each party having his own copy. Originally copies were all included on a single document from which each copy was torn or cut along a wavy (indented) lined.
Someone with relevant specialist knowledge who is appointed to resolve a difference between parties, eg as to a rent review or the interpretation of a clause in a lease. He uses his own specialist knowledge in addition to any evidence presented to him. His decision is final and binding on the parties but, unless his contract of appointment provides otherwise, he can be sued by an aggrieved party if his decision is manifestly negligent. Cf ARBITRATOR.
A retail outlet operated by an individual retailer, or by an organisation with fewer than ten branches. Cf MULTIPLE RETAIL OUTLET.
An impartial surveyor appointed to resolve a dispute. He may act either as an arbitrator or as an expert, depending upon the terms, express or implied, of the appointment or as implied from the circumstances.
1. One chosen to make a valuation because it is considered that he can and will act impartially, so that his decision can be relied upon to be unbiased. He may be called upon to adjudicate between parties in dispute or to provide an independent opinion required by, for example, the owner or some other interested person(s).
2. For the specific purpose of asset valuations, ".an External Valuer who has no other recent or foreseeable potential fee-earning relationship concerning the subject property apart from the valuation fee and who has disclosed any past or present relationship with any of the interested parties or any previous involvement with the subject property" (RICS Guidance Notes on the Valuation of Assets). Cf INTERNAL VALUER.
An automatic adjustment to a rate, price or payment in line with variations in a specific index, eg by adjusting the income receivable by reference to the retail price index in order to protect the value of an asset from loss due to the effect of inflation.
A tax relief applicable to capital gains introduced by the Finance Act 1982, as amended by the Finance Act 1985. In effect this gives an owner the benefit of the base value of an asset being adjusted by reference to the retail price index, thereby ensuring he is taxed only on real gains. The allowance applies only since March 1982. Although gains before April 1982 are now exempt from capital gains tax for all disposals on or after 6th (or 1st) April 1988, the indexation allowance is unchanged.
Costs of a building or works additional to those of labour, machinery and materials. They include the costs of administration, financing, taxes and insurance, loss of interest on money invested and professional fees. Cf ON-COSTS.
See CIRCUMSTANTIAL EVIDENCE.
1. Defined by the Town and Country Planning (Use Classes for Third Schedule Purposes) Order 1948 in terms now adopted in the definition of "industrial process" in the Use Classes Order 1987 (though the latter includes film, video and sound recording).
2. In everyday parlance, the meaning is somewhat wider than for planning and extends to buildings used for quarrying and mining, and, perhaps, for storage and other uses ancillary to industrial processes.
3. For the purpose of capital allowances for income taxation, "industrial building or structure" is defined by the Capital Allowances Act 1968, as amended, to mean mills, buildings and structures used for a wide range of activities, including factories; transport, docks, inland navigation, water and electricity undertakings; for the purposes of a "tunnel undertaking" or a "bridge undertaking"; for the storage of goods or materials to be used for the manufacture of other goods or materials, finished goods or materials awaiting delivery; mines, oil wells, etc; or for certain agricultural or fishing purposes.
See CAPITAL ALLOWANCES
A certificate which was issued by the Secretary of State for Trade and Industry under the Town and Country Planning Act 1971 certifying that certain forms of development, broadly speaking the erection of an industrial building of a prescribed class or a change of use of premises from non-industrial to industrial, could be carried out consistently with the proper distribution of industry. These provisions were suspended in 1982, but have now been formally repealed by the Housing and Planning Act 1986, section 48, which came into force on January 7 1987.
Normally an older industrial or commercial area, declared to be such by a local authority under section 4 of the Schedule to the Inner Urban Areas Act 1978, in which, by making loans and grants, the authority seeks to secure improved amenities and the conversion or improvement of buildings for industrial or commercial purposes.
