CONFIDENTIAL CFIJUL 2023/RES611 UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION COURSE : STATUTORY VALUATION COURSE CODE RES611 EXAMINATION 2 JULY 2023 TIME : 3 HOURS INSTRUCTIONS TO CANDIDATES 1. This question paper consists of two (2) parts: PART A (2 Questions) PART B (2 Questions) 2. Answer ALL questions from Part A and Part 8 ir the separate Answer Booklets. Start each answer on a new page, 3. Donnet bring any material into the examination room unless permission is given by the invgilator. 4, Please check to make sure that this examination pack consists of i) the Question Paper il) two (2) Answer Booklets — provided by the Faculty ii) Parry's Valuation and Conversion Table — provided by the Faculty 5, Answer ALL questions in English DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of 6 printed pages (© Hak Cipta Universit Teknologi MARA CONFIDENTIALCONFIDENTIAL 2 CFJUL 2023/RES611 PARTA QUESTION 1 Majlis Perbandaran Jasin (MPJ) has appointed your company to value its property located within its administration boundary for auction purposes, The property is expected to be auctioned in October 2023. The property is a leasehold three-storey corner terraced shop office with an unexpired term of 80 years. The property is currently tenanted and the conditions of the building is fair. ‘The detail of the subject property is as follow: Land area: 14.021 meter x 24.384 meter Lettable floor area: Ground floor : 41 feet x 75 feet First floor _: 41 feet x 70 feet Second floor : 41 feet x 70 feet ‘The assessment of the property is RM10,000.00 and quit rent is RM1,000.00 per annum. Other property outgoings are estimated about 20% of the annual gross rent. There was a sale in the locality for an intermediate two-storey terraced shophouse with land area of 156.12 square meter. The property was recently so d for RM2,460,000.00. The lettable floor area is as follows: Lettable floor area: Ground floor: 22 feet x 70 feet First floor: 22 feet x 65 feet Second floor : 22 feet x 65 feet The comparable property was let on full rental value (FRV) as follows (Table 1): Table 4 (Ground floor RM10,800.00 First Floor. RM8,500.00 Second Floor RM7,800.00 Investigation of the current construction cost for commercial properties wit between RMS0 per square foot ~ RM120 per square foot. in the vicinity is Using a suitable method of valuation, estimate the reserve price of the subject property for foreclosure purposes. All valuation must be complied with the Malaysian Valuation Standard provided by the Board of Valuers, Appraisers, Estate Agents and Properly Managers (6 Edition), You may use any assumptions where necessary (25 marks) @ Hak Cipta Universiti Teknologl MARA CONFIDENTIALCONFIDENTIAL, 3 CFAUL 2023/RES611 QUESTION 2 Your company has been appointed by the Majlis Bandaraya Johor Bahru (MBUB) to value a private school located in Tebrau, Johor Bahru, Johor. The leasehold property with an Unexpired term of 37 years was constructed in the year 2000 and has been undergone renovation and extension in December 2017. Recently, the State Government of Johor has approved revaluation for rating purposes within MBJB territory. The previous valuation has been carried out in 2016. For the purpose of this valuation, the new tone of the list will be established on 1st January 2024 together with the establishment of the valualion list by MBJB. Details of the property provided are as follows: Land Area : 0.8 hectares Tenure : Leasehold 99 years Category of land use : Building Express condition _: Land to be used for commercial orly Restriction in interest : Nil Encumbrances ‘The subject property is presently charged to ALLIANCE BANK BERHAD Registered owner —_: Maju Didik Scn Bhd Building accommodations are as follows (Table 2): Table 2 Building use Area | Construction Construction Cost (sq. meter) year |_ (RM per sq.meter) 2000 2017 2023 ‘Office and staff lounge | 300 2000 RM65.00 RM90.00 Prayer hall 82 2000 RM55.00 RM70.00 ‘Multipurpose Hall 850 2000 RMS55.00 RM80.00 ‘School Hall 480 2019 RMG0.00 | RN80.00. Classrooms: 2300 2000 RMEE.00 RM80.00 Library 600 2000 RM5S.00 RM80.00 Canteen 450 2000 RM50.00 RM70.00 ‘Canteen extension 300 2019 RM60.00 | -RM70.00 Football Field 2000 2019 RM30.00 | RM40.00 Indoor Badminton 85 2019 RM30.00 | RM40.00 Court Laboratories 184 2000 RM50.00 RM70.00 ‘Art and Music Rooms: 75 2019 RM55.00 | _RM70.00 Gymnasium 250 2019) RM55.00 | RM70.00 © Hak Cipta Universiti Toknologl MARA, CONFIDENTIAL,CONFIDENTIAL 4 CFAWUL 2023/RES611 Table 3 shows recent transactions for the vacant commercial land within the vicinity: Table 3 Lot No. Date of Consideration Land area] Remarks transaction (per hectare) (hectares) 215 22/03/2019 | RM 1,600,000.00 2.0 Freehold 253 25/07/2020 | RM 2,000,000.00 41 Leasehold 754 03/06/2022 | RM 1,800,000.00 0.8 Leasehold. The analysis of the rate of returns for the commercial properties in the su'rounding area is approximately 8% per annum and the estimated property outgoings is about 20%-25% per annum. Based on the above information and by using a suitable method of valuation, estimate the value of the subject property for rating purposes. All valuation must be complied with the Malaysian Valuation Standard provided by the Board of Valuers, Appraisers, Estate Agents and Property Managers (6" Edition). You may use any assumptions where necessary. {25 marks) ‘© Hak Cipta Universit Teknolog! MARA CONFIDENTIAL,CONFIDENTIAL, 5 CFIWUL 2023/RES611 PART B QUESTION 1 En Rizmen bought a piece of land in Kuala Kangsar, Perak for RM450.000.00 from his neighbour, En Lugman on 2" February 2018. The market value of the ‘subject property on the signing of an agreement was RM550,000.00. A year late’, En Rizman buill a double storey bungalow house on the said land with built-up-area of 3,364 square feet. The market value of the land together with the new house was RM1,400,000.00. Table 4 is the details construction cost of the house: Table 4 Details Built Up Area Construction cost (per sq. feet | (sq. ft) 2018 2019 2020 MEA, 2,876 RM190.00 RM240.00 RM260.00. ‘AFA 426 RM120.00 RM140.00. RM176.00. Patio 320 RMB0.00. RMS5.00 RM110.00. Garage 230 RM80.00. RM110.00 RM120.00. The land size of the subject property is 40feet x 80feet. The market value of the vacant land in the vicinity are being sold in the range RM170.00 to RM200.00 per square feet. Upon retirement, En Rizman decided to move back to his hometown in Melaka. He then sold the double storey bungalow to his son, Danial in 4" January 2020 for RM85C,000.00 which is below the market value. Danial later spent RM80,000.00 on renovation work to convert the type of residential from double storey bungalow house to double storey town house. Danial rented out the ground floor to his staffat RM1,400.00 per month while the second floor as his residence. In 1% March 2022, Danial decided to migrate to Perlis and signed an agreement to sell the double storey town house to a buyer for RM1,500,000.00. He received full payment f-om buyer in 31* December 2021. In order to sell the double storey town house, there are several cost that he has to spent, namely: i) Estate agent fee: RM90,000.00 ii) Lawyer fee: RM8,000.00 iii) Administration fee: RM2,000.00 Danial also has received a deposit of RM150,000.09 from previous potential buyer who has cancelled the Sale and Purchase Agreement of the subject property. In September 2020, Danial received compensation from an insurance company due to a claim on flash flood of RM25,000.00. Danial has applied for a private residence exemption on a previous house sale, Compute the Stamp Duty and Real Property Gain Tex chargeable to En Rizman and the Real Property Gain Tax (if any), payable by Danial. (© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,CONFIDENTIAL 6 CFIJUL 2023/RES611 All valuation must be complied with the Malaysian Valuaticn Standards provided by the Board of Valuers, Appraisers, Estate Agents and Property Managers (6" edition). You may use assumptions where necessary. (25 marks) QUESTION 2 Lot 100 and Lot 101 are two (2) pieces of agriculture land planted with mixed fruits trees. The lands are located at Mukim of Labu, district of Sepang, Selangor. The schedule lot has been gazetted under Section 4 of the Land Acquisition Act 1960 (Amended) vide Gazette Notification No. 232 dated 2 November 2021 for "Dewan Komuniti Orang Melayu". This is followed by another gazette under Section 8 of the same Act, Gazette Notification No. 334 dated 1% November 2022. On the day of inspection, 5" January 2023, the scheduled lots are road frontage and were cultivated with mix fruit trees between 7 to 9 years of age. The both registered land owner has appointed your firm to prepare the claims and ‘compensations and represents him at the enquiry before the Land Administrator. Lot No Lot 100 Land Area 39 acres Tenure Freehold Category of land: Agriculture use Zoning : Potential land for residential and commercial development Area Affected 37.5 acres Topography Hilly and undulating land Description Malay Reserve Land with a bungalow house. ‘The bungalow house is a permanent building structure that completed in 1® November 2019 while an extension area completed in June 2021 Built up area for bungalow house as fellow: Main Floor Area: 1,874 square feet Ancillary Floor Area: 650 square feet Extension Area : 430 square feet The construction cost of the similar bullding in 2019 (MFA) is RM180,00 per square feet while for AFA is RM 100.00 per square feet. The cost has increase 20% for the current year. Due to the acquisition, the land ‘owner has to demolish the bungalow house and find a place to start a new life. Itwas discovered that the value of the remaining land has dropped 20% due to the shape of the remaining. (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL Lot No : Lot 101 Land Area :45 acre Tenure : Freehold Category of land: Agriculture use Zoning Area Affected 40 Acres Topography Description Hilly and undulating land Land cultivated with mix fruits. It was discovered that the value of the CFIJUL 2023/RES611 : Potential land for commercial development remaining land has increased by 10% after acquisition due to purpose of acquisition. After acquisition, the remaining land become the first layer from the main road and has own access without having to turn far. The sales evidences of similar properties in the surrounding area are as follows (Table 5): Table 5 Lot Date No Consideration Notes 315 | 01/10/2019 RMT1,550,000.00 Land planted with mix fruit trees between 7 to 9 years of age with tenure freehold title. Located at road frontage. 301 | 03/09/2021 | “42.00 RM1,765,000.00 Located at first layer from the main road. Malay Reserve Land with potential to be develop as residential development 412 | 05/02/2022 | 37.5 RM1,900,000.00 Located at road frontage with freehold tenure. Land planted wth mix fruits aged between 7 to 9 years old. Category of land use is agriculture land 415 | 02/10/2021 | 30.25 RMT, 780,000.00 Land planted with mix frut trees between 7 to 9 years of age. Tenure is freehod title with potential to be develop as residential and — commercial development land 161 | 4/0/2021 | 48.00 RM1,840,000.00 Malay Reserve Potential to be develop as residential and — commercial development land. Land located at the second layer from main road Land with 302 | 4/11/2021 | ~40.00 RM1,700,000.00 Lccated at first layer from the main road. Malay Reserve Land with potential to be develop as. residential development (© Hak Cipta Universiti Teknologi MARA, CONFIDENTIALCONFIDENTIAL 8 CFIJUL 2023/RES611 Based on the information, you are required to determine the amount of compensation payable to the both registered landowners. All comparable of surrounding properties must be justified wisely. All calculations must be reasonably supported and you may use assumptions where necessary. All advice on the amourt of claims for compensation must be according to the Land Acquisition Act 1960 (amended) and the Malaysia Valuation Standards provided by the Board of Valuers, Appraisers, Estate Agents and Property Managers (6" edition). (25 marks) END OF QUESTION PAPER (© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,