UNDERSTAND THE LANGUAGE OF A COMMERCIAL VALUER - 4

R
Rack Rent
(a) Market Rent (b) Advertised rate for hotel rooms.

Ratchet Clause
A minimum rental provision in leases, which protects the lessor from a drop in rental below an agreed lower limit in the event of a reduced market value or CPI. Has effect during rent reviews.

Rent Free Period
A period of occupancy where no rent is demanded, normally used as an incentive to a new tenant at the commencement of a lease and varies according to market conditions.

Rent Review
A periodic review of rental under a lease using a predetermined method. For example, increase in line with Consumer Price Index (CPI), or in accordance with a market valuation.

Rental Determination
A valuation report by an independent valuer fixing a rent, in circumstances where a lessor and lessee have been unable to negotiate an agreement.

Replacement Cost
The current cost of a similar asset offering equivalent utility.

Reproduction Cost
The current cost of recreating a replica of the asset.

Retrospective Valuation
A valuation taking effect from a date in the past.

Restrictive Covenant
An undertaking that requires one party to do, or refrain from doing certain things.Sales Evidence
Sales data that relates to properties that have characteristics comparable to the Subject Property and are utilised for comparison purposes.

S
Security of Tenure
Describes the advantages of ownership as compared with leasing. When the term is used in connection with renting, it means the certain term a tenant can remain in occupation.

Specialised Uses
Uses other than Office, Retail, Industrial and Residential.

Subject Property
The property for which the Client instructs the Valuer to prepare a Valuation report or the property that is the subject of a valuation.

T
Tenancy Schedule
A listing of each premise in a property including tenancy name, number, area, lease commencement and expiry dates, rental, rental review date and type, outgoings and rent review mechanism.

U
Unencumbered Property
Property free and clear of mortgages, restrictive covenants, leases, and assessments of any kind.

User
An owner-occupier, developer, investor, purchaser, vendor, landlord or tenant.

V
Vacancy
The area, expressed in square metres, which is physically empty but otherwise occupiable. Space which is empty but unable to be occupied is not included in the calculation of vacancy and marketable stock. This may be due to refurbishment or the inability to pass Occupational Health & Safety standards. 15. See also Direct Vacancy; Sublease Vacancy.

Valuation
An established, ethical and evidence based process for assessing the monetary value of an asset at a specified date, that is legally defensible and undertaken by a qualified, professional Valuer.

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