QUESTION BANK (QB) for PROFESSIONAL PRACTICE 1 [SEMESTER: 9]

17AR18 ANJALI VENU KOLANGARA

1) What are points considered in the working schedule of Land Acquisition?

ANS:
 Investigation
 Objection and confirmation
 Claim and value
 Award
 Possession
 Payment
 Reference to court
 Apportionment

2) When a land is acquired by local authority, the first application is made taking care of
which aspects?
ANS:
INVESTIGATION: When a local authority or a company requires a land, anapplication is
required to be made by it to the revenueauthority, accompanied with a copy of the plan
showing
1) survey nos.,
2) purpose of acquisition
3) the reason for the particular site to be chosen
4) And the provision made for the cost of the acquisition.
After the government has been fully satisfied about thepurpose, the least area needed, and
other relevant factsas provided under land acquisition rules, it will issue anotification
under Section 4 of the act that the particularland is required for public purpose.

3) What advice should the Architect give to the client in a proposed project?
ANS:
Clear title Factors.
4) What is the difference between Freehold and Leasehold?

ANS:
Freehold property can be defined as any estate of any entity that is “free from hold”
besides the owner. The owner of such properties can enjoy free ownership (sell, renovate
or transfer) of the property and can reuse the property for any purpose according to the
local regulations. If the owner wants to resell the property, it won’t require any legal
concern and it will require very less paperwork. Considerably, freehold properties are
more expensive than leasehold properties. There are no restrictions on the right of the
property. The owner of the freehold property might just have to pay a maintenance
charges. This type of property can be transferred by sale deed registration.
Advantages:
 Complete ownership and owners can make changes to the structures of their
house
 It can be transferred through generations.
Disadvantages:
 Responsibilities of maintenance.
 Availability is designated to certain areas only

Leasehold property means, if you have purchased a leasehold property, you have the
right only to stay for a particular period of time. In this case, the buyer is not the
owner of the property. You must pay the ground rent to the owner or the leaseholder
of the property, once the lease period is expired, the property rights will go back to the
owner. It is necessary to know that the tenure of the lease will influence the value of
the property. It is possible to extend the leasehold according to your comfort.
Advantage:
 It can be renewed at the end of the term, you can continue to live in the property
if you want to extend.
 Mostly the landowner is responsible for maintenance of the property.
Disadvantage:
 To make changes in renovation or remodelling you have to make the permission
from the landowner.

5) What is the purpose of Valuation?

ANS:

 Buying or selling property: when it is required to buy or to sell a property, its valua-
tion is required
 Taxation: To assess the tax of property its valuation is required. Taxes may be munic-
ipal tax, wealth tax, property tax, etc., and all taxes are fixed on the valuation of the
property. Wealth tax and estate duty, assessment of income or stamp fees, capital
gains tax etc.
 Rent fixation: in order to determine the rent of a property, valuation is required. Rent
is usually fixed on certain percentage of valuation (5% to 10% of the valuation)
 Security of loans or mortgage: when the loans are taken against the security of the
property, its valuation is required.
 Compulsory acquisition: whenever a property is acquired by law compensation is paid
to the owner. To determine the amount of compensation valuation of property is re-
quired.
 Speculation: when a purchase is intended for sale of the property and make some
profit, a short period valuation is necessary for that purpose and this is known as spec-
ulative value. Generally speculative value is lesser than the market value.
 Betterment Charges: when the property comes under some town planning scheme of
the area, its value increases and consequently, the owner of the property is required to
pay additional tax, known as the betterment charges. It becomes, therefore necessary
for the property to know the value of his property before and after completion of town
planning schemes.
 Gift tax: when a property is gifted, valuation of the gifted property is necessary to pay
gift tax to the government by the person whom the property has been gifted
 Probate: when the name given for the legal process of dealing with someone’s assets
after they die. Normally this is carried out following the wishes of the deceased per-
son by the executors of the will.
 Partition: when the market value of the entire property from which a specific share
has been claimed through partition.
 Insurance: For the purpose of taking out an insurance policy of the property, the
owner desires to know the replacement value of the property. In this case , the value
of land is excluded or omitted

6) What is the difference between Value, price & cost?

ANS:

 The price implies the financial compensation for the supply or use of the product or
service. Cost refers to the amount of expenditure made on a particular product to pro-
duce it or to undertake any activity. On the contrary, Value implies the usefulness and
desirability of a product or service to a customer.
 Price is what the company charges for goods or services from its customers; Cost is
the what the company pays to acquires goods and services for production, whereas
and Value is what goods or services pay to the customers i.e. worth.
 While the price of the product is determined by the customer’s or marketer’s view-
point, the cost is ascertained from the producer’s viewpoint. But, the value can be de-
termined from the consumer’s viewpoint, because, he/she is the ultimate user of the
product or service, who is going to use the product in real.
 When it comes to monetary measurement, both price and cost can be monetarily mea-
sured. However, the value cannot be measured in terms of money.
 Price is estimated through the pricing policy and strategy of the company. Unlike,
Cost is assessed on the basis of actual expenditure incurred on manufacturing a partic-
ular product, but the estimation of value is based on a customer’s opinion about the
product or service.
 Market fluctuations causing due to demand and supply forces or competitive forces or
the prices of related items often affect the price of the product. Similarly, there are a
number of factors which leads to the rise and fall in the elements of cost, i.e. material,
labour and overheads, which may include a change in economic condition, govern-
ment interference, technological changes, and so on. However, the value of a product
or service for a consumer is not affected by market fluctuations.
 7) What do you understand by the term Amalgamation?
ANS:
Amalgamation is a process of combining two or more contiguous pieces of alienated lots.
Before amalgamation, the lands are held under separate land titles, but after the lands are
combined, they will be held under a single land title with all proprietors appearing in the title
together with their shareholdings. Amalgamation shall be approved by fulfilling the following
circumstances:

 An environment free from restriction in interest

 A situation unopposed to any written law in force
 Obtaining any necessary approval of planning authority and State Authority for the
development area
 No outstanding item of land revenue
 The lots to be amalgamated must at least share one boundary in common
 The lots must be situated in the same town, village or district.

8) What is an Easement?
ANS:
An easement is a right whichthe owner or occupier ofcertain land possesses, assuch, for
the beneficialenjoyment of that land, to doand continue to do something,or to prevent and
continue toprevent something being done,in or upon, or in respect ofcertain other land not
his own.

9) What are different types of Easements?

ANS:
There are four types of easement Section. 5 of Easement Act deals with the types of ease-
ment. It provides that the easements are either continuous or discontinuous ,apparent or non
apparent.
A) Continuous Easement -
A continuous easement is one whose enjoyment is, or may be, continual without the act of
man.
B) Discontinuous easement - A discontinuous easement is one that needs the act of man for
its enjoyment.
C) Apparent easement -
An apparent easement is one the existence of which is shown by some permanent sign which,
upon careful inspection by a competent person, would be visible to him.

10) What are 4 essential elements of Easements?

ANS:
  There must be a dominant and a servient tenement.
 The easement must accommodate the dominant tenement, that is, be connected with
its enjoyment and for its benefit
 The dominant and servient owners must be different persons
 The right claimed must be capable of forming the subject-matter of a grant;

11) What is Positive Easement and Negative Easement?

ANS:
Positive easement means, thoseeasements by which dominant ownerdoes some thing upon
property ofservient owner.
Negative easement means, thoseeasements by which servient owner isstopped to do
something but there is nosuch easement on the basis of whichdominant owner may bind
servientowner to do some work.

12) What are the important clauses where an Architect becomes an approved valuer?
ANS:
A valuer is an expert who can work out the market value of a property on scientific
analysis and instances of sales.
•Generally a property valuer is an engineer or architect possessing sound knowledge of
the following:-
Estimation and Costing
Surveying and Leveling
Planning and Designing
Experience in construction works
Building bye-laws of the local bodies
Law of easements: construction on some other’s land
Law of contracts
Land acquisition and Town Planning act
Arbitration
Fire Insurance
Central and local government’s taxation
Money Market and rate of interest
Zonal importance of land and building
Writing Reports

13) What do you mean by the term wealth tax?

ANS:
Wealth tax was a charge levied on the total or market value of personal assets. Also known as
capital tax or equity tax, wealth tax was imposed on the richer sections.
 Wealth tax included certain prescribed assets, such as building or land (with certain
exceptions), vehicles, jewellery, bullion, yachts, boats and aircraft (other than those ones used
for commercial purposes), urban land, and cash in hand exceeding a certain amount. A net
wealth tax deducted liabilities from an individual's wealth, primarily mortgages and other
loans.
 14) What are the 3 types of Property?
ANS:
There are mainly three types of property

•Mortgage

•Amortgageis a loan from a bank or other financial institution that helps a borrower
purchase a home. The collateral for themortgageis the home itself, meaningthat if the
borrower doesn't make monthly payments to the lender and defaults on the loan, the bank can
sell thehome and recoup its money.

•Free hold property

•This means that the estate you are buying is free from the hold of any entity, besides the
owner. So, the owner enjoys complete ownership and can use the land for any purpose (sell,
renovate or transfer), keeping the local regulations in mind. Moreover, if one plans to
sellsuch aproperty, it won't require any legal or government consent, and, hence, has less
paperwork attached. Understandably, freehold assets are more expensive when compared
toleaseholdassets.

•Lease-hold property

•As the name suggests, here the ownership of thelandon which the property is built is leased
for a certain amount of time to the developer. Generally, theleaseperiod varies from 30 to 99
years.

•If you are buying an apartment in a housing complex, it might be possible that thelandon
which it's built is leased. The future of such properties after the lease period is over is a bit
uncertain, and somehow depends upon the amount paid by the society to renew the contract.
Also, it's a task for the buyer to avail of loan from banks to buy aleaseholdproperty. You
would be surprised to know that majority of the housing options in Delhi, Mumbai (especially
Navi Mumbai), Noida Extension and Gurgaon are leasehold properties.

15) Describe 3 types of Income?

ANS:
There are mainly three types of incomes
•Property income
•Property income refers toprofitorincomereceived by virtue of owningproperty. The three
forms of property incomeare rent, received from the ownership of natural resources; interest,
received by virtue of owning financial assets; andprofit, received from the ownership of
capital equipment.
•Gross income
•Gross incomeincludes all income you receive that isn't explicitly exempt from taxation under
theInternal Revenue Code (IRC).
•Net income
•Net incomeis your take-home pay after taxes and other payroll deductions. Yournet income,
the amount on your paycheck, is what's used to make your budget.
 16) What are the basic principles of the Land Acquisition Act?
ANS:
 Land or property is required for a public purpose.
 Sale by an owner is compulsory and that there is no option in the same
 Owner to get market value as against sentimental or monopoly value
 Property is acquired free of all encumbrances.
 In addition to market value, an owner will be entitled to additional compensation of
30% on the value of such land for compulsory acquisition which is known as "So-
latium".

17) After completion of enquiry , the LAO declares his award showing which details?
ANS:
After necessary inquiries the collector declares his award showing truearea of the land, total
amount of compensation payable andapportionment of compensation if there are more than
one owners orclaimants
Collector’s statement to Authority.–(1) In making the reference, the Collector shall state
for the information of the Authority, in writing under his hand—
(1) The situation and extent of the land, with particulars of any trees, buildings or standing
crops thereon;
(2) The names of the persons whom he has reason to think interested in such land;
(3) The amount awarded for damages and paid or tendered under section 13, and the amount
of compensation awarded under the provisions of this Act;
(4) The amount paid or deposited under any other provisions of this Act; and
(5) if the objection be to the amount of the compensation, the grounds on which the amount
of compensation was determined.

18) What are the factors related to market value?

ANS:
Supply and Demand (Market Conditions)
•Basically the value of a property is determined by supply and demand. For eg: plentiful
supply of a commodity and little or no demand, lower the value of commodity, whereas, if
there is little supply and a great demand, higher the value of property.
•In the property market the supply of property is relatively fixed at any one time. In order to
increase the supply, more properties need to be built. However, this process takes time.
Demand, in contrast, can change relatively quickly. Therefore property values tend to be
influenced by demand rather than supply.
•Location
•Property proximity to public transportation, train stations, shopping facilities, schools, etc.,
plays an import factor in determining your property’s market value. Every area has a high
end and a low end. The market value of your property is affected by that reality. People that
purchase homes in “lower end” areas expect to pay less than they would if they bought the
same home in a “higher end” neighbourhood.
•Features
•One of the key factors in property’s value is the features it provides. For example, some
house styles are more popular with buyers than others. The age and size of your home
compared to other available properties also plays a part in affecting your home’s value.
Condition
•The value of Property also depend upon its condition and its functional utility. For eg: A
home in immaculate condition has a much higher potential for a top dollar sale than one that
is lacking the most basic routine maintenance.
•Property Improvements
•The value of Property also depend upon its condition and its functional utility. For eg: A
home in immaculate condition has a much higher potential for a top dollar sale than one that
is lacking the most basic routine maintenance.
•Age
•The age of a property can be a factor in value. If a property has historical connections, it
can make it more valuable and imperfections such as uneven walls and sloping floors that
would not be tolerated in a new property would perhaps be seen as quaint and charming. –
•Some older properties may need more maintenance and repairing than a modern property
and a newer property would meet all the latest up to date regulations thus increasing its
value.
Seller Motivation
•Seller motivation is also a major factor which affects the offer price made by the buyer. For
example, if you bought a home in a new area you may be willing to accept a lower price to
quickly complete the sale your current house
•Marketing
•The marketing plan that your agent executes on your behalf will determine the amount of
interest that is shown in your property. Your agent’s level of skill and expertise in the
negotiating process will affect the amount of money you’ll be able to get for your Property.

19) What is Dilapidation?

ANS:
Dilapidations are breaches of leases due to the condition of the property being leased, either
during or at the end of the lease period. This may result from mistreatment of the property or
poor or absent maintenance or repairs that are required by the lease. Further work may also
be required at the end of a lease to reinstate alterations that have been made to the property by
the tenant.
Tenants should be clear about their responsibility for dilapidations and reinstatement when
signing a lease or carrying out alterations and should budget and account for any necessary
works during the course of the lease. If they fail to do this they face the prospect of
unexpected, or unaffordable works, or having insufficient time to carry out the works before
the end of the lease.
If the required works are not carried out, the landlord may issue a schedule of dilapidations,
or a notice to reinstate near the end of the lease (or an interim schedule during the course of
the lease).
If dilapidations works are not carried out by the end of the lease, the landlord may claim
damages from the tenant (a terminal dilapidations claim). This may take the form of a
‘quantified demand’ setting out details of the landlord’s losses as a result of the dilapidations,
which may include loss of rent due to repairs being carried out. However, the landlord cannot
profit from this claim, so if for example the landlord does not intend to reinstate the property,
this must be taken into account.
These issues may result in a period of negotiation between the tenant and landlord in an
attempt to agree a settlement figure. If the negotiation process fails then alternative dispute
resolution or court proceedings may be necessary.
The valuation of works required, or the loss of value to the property can be complex
calculations, and so both parties may wish to appoint surveyors to offer advice and prepare
the appropriate documentation. Further specialist advice may be necessary for complex
components or aspects of a property, such as building services plant. Court proceedings may
also involve expert witnesses.
A ‘Pre-Action Protocol for Claims for Damages in Relation to the Physical State of
Commercial Property at Termination of a Tenancy’ (the 'Dilapidations Protocol') is available
from the Ministry of Justice. This describes the conduct the court expects the parties to follow
before commencing proceedings, setting out a process and timetable for the exchange of
information, and establishing standards for the content and quality of schedules of
dilapidations and quantified demands.

20) Name any 10 types of values ?

ANS:
1. Market value
2. Book value
3. Scrap value
4. Salvage value
5. Accommodation value
6. Distress value
7. Monopoly value
8. Replacement value
9. Investment value
10. Sentimental value
21

21) Write any 4 differences between internal and external obsolescence.

ANS:
•Internal obsolescence:
1.Poor or old design
2.Change in type of construction
3.Change in kind of construction
4.Change in utility demand

•External obsolescence
1.Poor original location
2.Change in the character of the district
3.Specific detrimental influences such as, construction of factories, proximity of public
building, traffic locations, noises, etc.
4.Zoning laws

22) What is the difference between Rent & Lease

ANS:
Payment for the use of Property
To grant possession & enjoymentin exchange for consideration
A legal contract for conveyingproperty usually for a fixed period & fixed compensation
Lessor – One who grants a lease
Lessee – One whom a lease isgiven

23) What is the procedure in fixing Rent?

ANS:
The tenant needs to make an application to the court requesting fixation of Fair rent.
Along with this application is required to submit a report from an expert specifying the rent
which the tenant claims to be fair.
The court then directs the landlord who files a report prepared by the expert who justify the
rent that he is charging.
The court thereafter asks the parties to make both oral and written submissions and lead evi-
dence in support of their respective cases.
Certified true copies of convince or lease deeds are to be produced if required the same needs
to be authenticated by preceding parties to who set transactions as witnesses based on all the
documents and evidences the court fixes the rent which is regarded as the standard rent.
At times the court may fix an interim rent which the tenant has to deposit with the court.
The landlord may be allowed to withdraw the sum at fixed intervals
The amount paid as interim rent is finally adjusted when the code fixes the standard rent.

24) What is Rent Control?

ANS:
The practice of imposing a legal maximum (rent ceiling)upon the rent in a particular housing
market, below the equilibriumrent is called rent control. The common thread running through
Rentcontrol Act and legislations is that they are intended to serve two purposes:
1. To protect the tenant from eviction from the house where he is living except fordefined
reasons and on defined conditions;
2. To protect him from having to pay more than a standard rent. The amount paid as
interimrent is finally adjusted when the code fixes the standard rent.
If necessary the court may appoint a commissioner or an independent expert to prepare afair
rent report.

25) What are the Vital Factors For Fixation Of Standard Rent?
ANS:
Number of rooms and their sizes
Area of premises
Type of use –residential/ commercial
Year of first letting
Returns expected by the landlord on land and building
Paying capacity of the tenant
Management expenses and property taxes
(Subject incharge : Prof. Raj Mhatre )