Friday, April 03, 2009

RE: Green light for BII rent adjudication system

Hi Phil. Your position seems sympathetic to the real difficulties faced by tenants at rent review. My own experience of costs dwarfs those you mention. You ask who to trust with a valuation in this business? There's only one valuer anyone except a pubco can trust in this industry and the pubcos are having a pop at him right now.

The sense of this scheme is that it's aiming to reduce the costs of arbitration. Real problem is the process of valuation itself before it even gets close to third party. And the outcomes of this scheme won't be satisfactory as long as RICS stands by its ludicrous valuation guidlines which favour landlords' interests excessively over tenants' ability to pay.

The rent review process is riddled in black magic fantasies that ridiculously inflate the potential financial performance of pub businesses. Arbitrators are also valuers in other parts of their lives and they cannot fail to be influenced by the work they do in establishing high rent increases for pubcos against tenants.

An ignorant but on the ball 'Cyril the bus driver' would give a far fairer assessment of rent than anyone professionally qualified because he'd be using common sense of what a business can afford instead of RICS guidlines which work on setting rent at half the projected profits a business 'should' be making when run by a 'hypothetical', or imaginary, tenant rather than the real tenant; irrespective of the true financial performance of the business.

It's all emperor's new clothes out there. This industry needs a massive shake down same as banks but more severe to get it working properly because it's really badly broken.

Mark (J) Dodds Ba(Hons) DipKew FRSA

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