However, in accordance with the empirical evidence presented before the court, the judge held that ‘he should interpret the Lease according to his understanding of the ordinary usage of words having regard to the context in Pt II and the Lease; neither partys case was, in his view, assisted by any finding based on the evidence of the valuers’ (par. 2.14). Moreover, it has been stated by the court (Hodgson A) that “one contention of the appellant was that the commercial basis of the clause was the intention to amortise the incentive payment of $68 million over the first ten years of the Lease; however, accepting that commercial purpose, it seems to me that both the rival contentions, to some extent or other, further that commercial purpose; the only difference is a matter of degree to which that commercial purpose is furthered, and in my opinion one cannot choose between those two contentions on that ground’ Relevance of the case to valuers The particular case is of significant importance for the identification of the use of valuers in the cases where the value of the rent cannot be estimated using the common methods of the market.
On the other hand, the use of valuers by both parties has been proved to create additional constraints when having to decide on the exact level of the rent applied on a particular lease. (words: 738) Section 2 Briefly discuss the distinction between a “speaking” a “non-speaking” valuation in the context of a rent review determination In order to make clear the distinction between a ‘speaking’ and a ‘non-speaking’ valuation, we should primarily refer to the content of the ‘rent review determination’.
In this context, it has been stated by Crosby et al. (1997) that “a review is a one-to-one situation where neither party can walk away and a third party will determined the rent in the absence of an agreement; the rent is the only element to be considered therefore it is only agreed after a detailed examination of the lease; this may be the complete reverse of the open market letting but the rent sought is the same rent as would be agreed upon new letting”. Moreover, it is noticed by O’Roarty et al.
(1997, 309) that “rents at review are commonly assessed by making comparisons with properties similar to the subject premises under assessment; subjective adjustments are made where the location, physical and lease term characteristics of subject and comparable properties differ”. The above issues are used in the market in order to decide the level of the rent both in residential and commercial leases.
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