Royal Institution of Chartered Surveyors and Valuation?
It would appear that the RICS are now looking into a number of activities and decisions made in respect of pub rental and valuation policies over the last few years.
They have up and until now refused to accept that their Surveyors would not over rent or over value pubs, causing the demise of lessees and tenants.
The removal of the clause in their original Red Book on Valuation stating that turnover should always be used in any Comparables method of Valuation by the RICS TRVG (Trade Related valuation Committee), has created a situation where viability is ignored and the assumption that business is unlimited to suit whatever a Surveyor decides. This is a fallacy the market share is limited, the turnover at that time is the true market share for that pub. Any increase in Market Share is at the cost of another pubs business.
Comparables for those that have not come across this term, is where a Surveyor looks at four or five other pubs within a ten mile radius takes a rough average of the rent and assess the rental value of the pub to be valued.
The removal of turnover in the equation by the RICS Valuation Group some years ago enabled any figure to be used for rental to suit the landlords requirements.
If any lessee went to Arbitration, the Arbitrator was bound to ignore the existing turnover, which is the key to viability, because of the RICS guide lines.
It now appears that the guide lines are not law and could be disputed in court with the right legal experts, the wording in the lease is legally binding, but the RICS guidelines in certain circumstances could be seriously in question.