NIESV PPE flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Land Use Act 1978
- Nigerian statute vesting all land in each state in the Governor, held in trust for the people; individuals hold rights of occupancy rather than absolute ownership.
- Certificate of Occupancy
- Document issued by a state Governor evidencing a statutory right of occupancy; it is evidence of title but not conclusive proof and can be challenged.
- Statutory right of occupancy
- Right of occupancy granted by the Governor over land in a state, typically for 99 years, subject to conditions and payment of rent.
- Customary right of occupancy
- Right of occupancy over land held under customary tenure, granted by local government, without a fixed term and governed by customary law.
- Governor's consent requirement
- Rule that assignment, mortgage, or transfer of a statutory right of occupancy requires the Governor's consent; absence renders the transaction voidable.
- Market value basis
- Estimated amount for which an asset should exchange on the valuation date between a willing buyer and willing seller in an arm's length transaction.
- Investment method formula
- Capital value equals net income multiplied by years' purchase; for a perpetuity, years' purchase equals 100 divided by the capitalisation rate.
- Residual method
- Development valuation method where site value equals gross development value less total development costs, fees, finance, contingency, and developer's profit.
- Years' purchase
- Multiplier applied to net income to derive capital value; in perpetuity it equals 100 divided by the yield expressed as a percentage.
- Highest and best use
- Use of a site that is legally permissible, physically possible, financially feasible, and maximally productive, yielding the highest present value.
- Development appraisal
- Financial model testing scheme viability by comparing gross development value against construction, fees, finance, contingency, marketing, and profit.
- Bid-rent theory
- Economic theory holding that land uses compete for sites and that the highest bidder determines the use and intensity of development.
- Net present value
- Sum of discounted future cash flows less initial outlay; a positive NPV at the required discount rate indicates an acceptable project.
- Internal rate of return
- Discount rate at which a project's net present value equals zero; projects are acceptable when IRR exceeds the cost of capital.
- Capitalisation rate
- Ratio of net operating income to capital value, reflecting risk, growth expectations, and prevailing market conditions for the property class.
- Debt service coverage ratio
- Net operating income divided by annual debt service; lenders typically require a ratio above 1.2 before advancing mortgage finance.
- Real estate investment trust
- Pooled investment vehicle holding income-producing property, offering investors liquidity, diversification, and regular distributions from rental income.
- Sole agency
- Appointment of a single agent to market a property, usually for a fixed period, with commission payable on a successful introduction.
- Ready willing and able
- Standard test for entitlement to agency commission: the agent must introduce a purchaser or tenant able and willing to complete on the agreed terms.
- Client due diligence
- Anti-money-laundering process requiring agents to verify client identity, source of funds, and beneficial ownership before acting in a transaction.
- Service charge budget
- Annual estimate of costs of maintaining common parts and services, apportioned among occupiers and reconciled against audited actual expenditure.
- Sinking fund
- Reserve accumulated from service charges to meet future major repairs or replacement of building components, such as lifts or roofs.
- Rent review clause
- Lease provision allowing periodic adjustment of rent to open-market level, an index, or a fixed increase at stated review dates.
- Preventive maintenance
- Scheduled servicing and inspection of building systems intended to prevent breakdowns, extend asset life, and reduce long-term operating costs.
- Conflict of interest
- Situation where a practitioner's personal or financial interest could compromise objectivity; it must be disclosed and the instruction declined if material.
- Contingent fee prohibition
- Ethical rule barring valuation fees that vary with the reported value, because such arrangements compromise the valuer's independence and objectivity.
- Professional indemnity insurance
- Insurance covering a practitioner against claims for negligence or breach of professional duty arising from valuation and consultancy work.
- Engagement letter
- Written agreement setting out scope, basis of value, fee, timetable, and client obligations before a professional instruction commences.
- Expert witness duty
- Overriding obligation of an expert to assist the court or tribunal independently and objectively, rather than to advocate for the instructing party.
- Arbitration award
- Decision of an arbitral tribunal that is final and binding on the parties, enforceable subject to limited grounds for challenge.
- Injurious affection
- Compensation for loss in value of land retained by an owner where part of the holding has been compulsorily acquired for public purposes.
- Severance compensation
- Payment for loss of value caused by dividing a single holding into separate parts through compulsory acquisition of an intervening portion.