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We now subjoin some observations on the valuation of house property, which clairn the architectural student's attention. Inwood's Tables for the Purchasiny of Estates, &c. have long been in general use; they are founded on the elaborate Tables by Baily and Smart. A series are given hereafter. W. D. Biden, Rules, Formulæ, and Tables for the Valuation of Estates, &c., with his smaller work, Practical Rules for Valuers, 1862, are useful, and have furnished the outline for the following remarks.
It is generally considered that the value of a freehold house ranges, according to situa: tion, style. condition, &c., from 10 to 20 years' purchase. It naturally follows, that pur. chasers, and some valuators indeed, imagine that house property, as a rule, pays from 5 to 10 per cent. interest on the purchase-money. This is a great error, as many have experienced who have endeavoured to realise and to expend yearly 8 per cent. on the cost of house property. The valuation should be made at 5 per cent. (if the purchaser will be content with that interest); and the present value of all the costs, charges, and losses incident to house property should be fairly stated and deducted in the valuation, and then the purchaser will not be deluded with the idea that he is to net a very large interest, which may be spent unconcernedly. Such is the expectation of many of those who are induced to join Building Societies, and who buy, what appears to them, a bargain, as they will be receiving for years double or treble the amount of interest obtainable from the funds. A change of tenants, or other cause, soon shows the difference. Where, however, the buyer himself occupies the house, whether freehold or leasehold, he may make a very advantageous investment of his money. In the latter case, that is, of a leasehold, he must bear in mind the result of the occupation of the premises, namely, dilapidations, for which he will he called strictly to account by his landlord at the expiration of his term of lease.
Compare the following valuations, made in two ways, of a freehold house, which will last for about 80 years, the tenants paying the rates amounting to about £7 per annum. One valuator may make out his calculations thus :
£ 8. d.
S. d. Gross rent received by the landlord
63 0 0 Deduct Insurance
1 10 0 Land Tax - when paid by him
4 14 6
48 11 9 (In a leasehold valuation, the ground rent would also have to be deducted.) To pay 8 per cent., at years' purchase (Fourth Table)
12) Presumed value of the property, according to this rough valuation £607 0
tingencies, which must be provided against by an annual
reserve according to the class of building, thus:Deduct for losses by bad tenants, say 1 year's rent in 6 = 10 10 · And, for extra repairs and expenses contingent upon such frequent changes, say an equal sum
10 10 Deduct a sum for rebuilding (say about £630), which, put by
each year in the funds at 3 per cent. compound interest,
2 0 0
If the purchaser elects to have 5 per cent, for his speculation, the amount to be paid for the property will be
£512 00 The value of the ground in these calculations is included in the rental; when of some linportance, it must be valued upon its own merits, as shewn in the previous page.
But there may be a further expenditure for surveyors' charges, solicitors' charges for transferring the property, and loss of capital by selling out of the funds, which it may he often necessary to deduct from that amount. A matter also of consideration is whether the building is in a good state of repair, both in structure and decoration, as ready for a tenant.
When the property is lrasehold, then, as soon as the clear income has been ascertained. it will have to be multiplied by the number of years' purchase at the rate of interest required for the term (Fourth Table), to find the amount that the property is worth. The number of years' purchase provides for the percentage and to get back the principal, the annual instalments of which must be invested at the same rate of interest to produce the total sum at the end of the term (in lien of the rebuilding fund in the freehold property). Among Inwood's Tables, 16th edition, 1855, is one (p. 177), whereby to calculate “ the present value of an income for a certain number of years, which is to pay during its continuance a given rate of interest on the purchase-money, and to replace the purchase-money at the end of the same number of years at a rate of interest to be selected.”
From the former method of expressing the valuation, it would appear that a purchas'r may realise 8 per cent upon his outlay; and so indeed he may, for a few years, if everything connected with the property be very favourable ; but the latter calculation shows exactly what may be expecied, namely, that on capitalising a further sum to form a sinking fund for certain repayments, then 5 per cent. per annum may be appropriated as income, the reinainder of the rent being set aside to supply a fund to meet exigencies of no uncom. mon occurrence. The real value of the property, moreover, is found to be much less than what the rough calculation would show it to be worth.
The deductions for losses depend entirely upon the class of house. First class houses in good situations let so readily to responsible tenants, who for their own comfort and display maintain the fabric, that the sums to be deducted for the occasional want of occupants and expenses of reletting are reduced to a minimum. On the other hand, a much lower class of house, together with the present unsatisfactory mode of letting houses on three years' agreements, and the still more ineligible arrangement by the year, throw.so much larger amounts for repairs, decorations, and change of tenaney, upon the landlord. that the total of the sums to be deducted is raised to a very high estimate. Herein the best judgment of the valuator is called into requisition, and it requires the knowledge obtained by the practical architect to assist his judgment in such matters.
After the actual value has been ascertained, another item for consideration is the additional sum that a purchaser will be induced to give for some reason--such as the property being in a fashionable neighbourhood; the house possessing arrar igements peculiarly suited to his wishes, and so on : this amount may be called a “ fancy price," and when paid had better be considered as money sunk.
For making rough calculations, according to the first instance, the value of freehold land in the country is generally considered worth from 30 to 33 years' purchase, being calculated on the 3 per cent, tables. In a few very exceptional cases as much as 40 years' purchase bas been given ; but the difference constituted a “ fancy price.” For town plots from 25 to 30 years' is more usual. Freehold houses and buildings, 1st and 2nd class, from 18 to 20 years' purchase, or 5 per cent.; 3rd and 4th cl'iss, about 16 years' purchase, or 6 per cent. For Leasehold property :
1st and 2nd class, from 15 to 16 years' purchase or 6 per cent.
14 to 15
12 to 13 4th and 5th
11 to 12 5th and 6th Freehold Ground-rents are valuable in proportion to the extent to which they are covered by the rack-rent and by the period of reversion. A good ground-rent ought to be six times covered, that is, five parts are brick and mortar rent, and one part ground
A reversion, however, unless within forty years, is not much taken into account. Some ground-rents in the City of London (where the ground-rent is larger in proportion) have sold for 314 years' purchase ; those only covered by three times the rack rent, sold for 25 years' purchase. Leasehold and freehold ground-rents can only be valued according to locality, circumstances, length of holding, &c. Unsecured ground-rents are usually valued at 25 years' purchase, but those well-secured at from 30 to 33 years' purchase. Improred ground-rents are not worth so much as the freehold ground-rent, in consequence of the covenants of superior leases, danger of breaches of covenants, &c.
In the valuation of leases held on lives, the operation, after bringing the rent to a clear annuity, is conducted by means of the sixth, seventh, and eighth tables, given hereafier, as the case may require.
In the valuation of warehouses, the only safe method of coming at the value of a rental
is hy the quantity of goods or tonnage they will contain after leaving proper gangwaya, and not overloading the floors. In corn warehouses, however, the grain being distributed over the surface of the floor, the squares of floor are taken to come at the contents. Goods warehoused are paid for to the warehouseman usually at a weekly or monthly rent; and it is commonly considered that the profit he should make ought to be one half of the rent be pays to the landlord, so that in fact two-thirds of the actual rent realised goes to the proprietor, and the other third to the warehouseman or lessee. Tables of the weight and space occupied by different goods are given in the GLOSSARY ADDENDUM.
We have noticed at the commencement of this chapter that valuations depending upon building or building land are essentially within the province of the architect. But as valuations for Railway and Improvement compensations ramify into one and the other, as well as into agricultural land, a portion of the subject into which we do not consider it desirable here to enter, we will only notice that, as regards the foriner, there are several items, beyond those already mentioned, to be taken into consideration. A man holding a property, and dispossessed against his will, has a right to be paid for his interests being so injuriously affected, hence an item for “ compulsory sale” is allowed; this was formerly as much as 30 per cent. for house property, now it is only 10 per cent. ; while for land, from 10 to 25 per cent. is obtained, according to circumstances. With certain exceptions, the purchase of lands compulsorily is placed under the provisions of the Statute 8 Vict, cap. 18, “ The Land Clauses Act.” The assessment of the items usually consists of the fol. lowing heads :-1. The value of the property taken. II. Any reversionary or prospective advantage the owner may be likely to receive at any time; to be estimated in present money. III. Any advantage the owner may have by carrying on a trade, business, or profession, in a locality ; whether the same would be utterly destroyed, or a portion be taken with him. IV. The cost of removing, or loss by forced sale. V. The value of the portion only of the property (if so taken), and amount of damage the remainder may sustain in consequence of the severance; this is usually called consequential damage. VI. If a portion only be taken, and that portion injuriously divides the remainder of the property, the estimated amount of damage is known as severance. VII. Compensation for loss of time, trouble, and expense, in finding a new investment; loss of interest ; the parting with property to which one is attached to and has an interest in ; and other losses by being forced to give up a property and seek new, This forms the item of compulsory sale,
CIVIL AND ECCLESIASTICAL DILAPIDATIONS.
The architect, in the course of business, may be commissioned to ascertain the extent of neglect on the part of an occupant in keeping premises in proper order according to the terms upon which the property is held by him. In civil cases it is not usual for the lessor to exercise a power, generally reserved to him in leases, of causing his architect to inspect the premises from time to time to detect dilapidation ; but it is usual for the lessor to cause such an inspection (at a reasonable period, so that the repairs may be done) before the expiration of the term : this reasonable period may vary from two to twenty-six weeks, more or less. After such inspection or survey, a notice to repair dilapidations according to its appended schedule is served upon the tenant, who may either execute the works within the term, or (unless he can compound with the lessor for a sum to be ascertained under arbitration) take the responsibility of paying the charges of the tradesmen employed by the lessor after the premises have been surrendered, to which a compensation for loss of rent is naturally added ; but this arrangement, if adopted, is a very exceptional procedure. It will be evident that in cases where a lease expires and is not to be renewed before other suitable premises can be obtained, the latter method of action may be desirable ; but generally, and especially in the case of a dwelling-house, the cheapest, if the most inconvenient, course is for the tenant to have a survey made for himself and to get the repairs executed within the term. In ecclesiastical cases the survey previous to the end of occupancy is rarely, if ever, practicable ; and a sum must be ascertained under arbitration. According to the usual tenor of leases, the lessor expects that the premises shall be delivered, at the expiration of a term, in as good condition as the use and wear during the time will permit, and the lessee undertakes to make good any injury which the premises may have suffered through accident, neglect, or intention; these conditions apply, not only to what was originally demised, but to whatever may have been erected during his occupation. In ecclesiastical cases the principle, as will hereafter be explained, is rather different. It may be noticed here that the term wear and tear is a popular mistake wbick the law does not support; use and wear is legitimate, tear is dilapidation,
CIVIL AND ECCLESIASTICAL DILAPIDATIONS.
In civil dilapidations a tenant is bound, according to his covenant, specific or general, but never beyond maintaining and upholding, unless the conditions of repair are so bad that no measures short of reconstruction are consistent with safety, or possible from the extent of decay. His liability is not supposed to extend to such defects as only indicate age, so long as the efficiency of the part still remains. But if the effects of use or age have proceeded so far as to destroy the part, or its efficiency in the structure, the tenant is liable, it being the presumption that at the commencement of the term the tenant was satisfied that every part was sufficiently strong to last to the close. On the same presumption the degree of liability of the tenant is regulated by the actual condition of the premises at any time, as specified in his covenant, and admits of no extenuation by reason of dilapidations existing at the commencement of his term, as he is presumed to have taken the proper course to guard himself against the occurrence of undue liability. In extreme cases, the liability of a tenant extends to the rebuilding of a party wall condemned as unsafe, to reconstruction after fire, &c., unless specially excepted. In fact, under the natural and the legal favour which the lessor enjoys, the person proposing to become the lessee should employ a professional surveyor, not only to inspect the apparent, and as far as he can the hidden, state of the building, but also to check the conditions contained in the draft of the lease, which are sometimes extravagant when applied to an old and worn-out fabric, though they might be reasonable as regards a new structure.
Whatever the tenant has power to remove during the term cannot be chargeable with dilapidations. Upon this point the old rule is, that whatever is fixed to the freehold cannot be removed by the tenant : thus a lessee may erect barns or sheds or any building upon wooden or stone or other blocks laid on the surface of the ground, and take them down, il he please, without substituting anything in their place; but if the barns are fixed into the ground, they immediately become the property of the lessor. There seems, however, to be an exception in respect of buildings erected for the purposes of trade: hence not only coppers and ovens may be tahen away, but workshops and the like erected by the tenant for his particular trade. This exception seems at first to have applied only to wooden buildings; but Lord Kenyon held that a brick chimney would prevent a tenant from removing a building, and decided that its being on a brick foundation would not do it. Though this opinion was not beld by Lord Ellenborough, yet it was not because the buildings were of brick, but because they were erected for the purposes of agriculture, and not of trade. It is to be remembered, in all cases, that a lessee is bound to leave the premises in as good condition after the removal of fixtures as though they had never existed: thus, if a marble be substituted for a wooden chimney-piece, when the former is removed, the latter, or one of equal value, must be replaced. If a partition be put up and taken away, all damages to the adjacent work must be repaired.
The general rule for determining what injuries are considered dilapidations, is to ascertain what is fair wear without dilapidation arising from accident or neglect. Injury by accident is that which happens suddenly, and perceptibly differing from wear, which occurs only by lengthened use. Thus the nosing of a step worn away is not dilapidation ; but if such be broken away instead of worn, it is a dilapidation. It may be said that accident is defined here with too much latitude, inasmuch as it takes account of that which occurs without apparent reason at any particular time; but we use the term in common language, and may cite as an example, that if the timbers of a floor decay, the floor will yield, even without a load upon it. When accident occurs, such alone does not limit the extent of the dilapidation, but also such injuries to the building as follow in its train. Thus, if the weather-boarding of a building decay from age, so long as the covering will keep out wet, it is no dilapidation ; but if broken in any part, that is a dilapidation; and if from want of reparation any of the internal parts of the building be injured, such injury is a dilapidation : so if tinber or timbers belonging to any part of a house merely decay, if it or they be still sufficient for the support of the house, no dilapidation can be chargeable; but if such timber or timbers give way, they must be replaced, and all parts made good which suffered by their failure. Waste, in law, is insufferable, even in freeholds which are held for lives only. According to Woodfall (Landlord and Tenant), “ waste may be done in houses by pulling them down or suffering them to be uncovered, whereby the rafters and other timbers of the house become rotten ; but the bare suffering them to be uncovered, without rotting the timber, is not waste: so if a house be uncovered when the tenant cometh in, it is no waste in the tenant to suffer the same to fall down." In external covering, however, it seems that decay arising from inattention to it is dilapidation, even though no accident be the cause. It is always considered that though painting neglected is not itself a dilapidation, yet where decay arises from it, it is one. Broken glass is not considered a dilapidation, unless there be more than one crack in the pane. Some, however, contend that while the glass is sufficiently entire to exclude the wind and weather, no waste is assignable. Generally it seems then to be the rule, that where accident occurs, it is a dilapidation.
In the preceding paragraph the word neglect has naturally occurred; dilapidation from
neglect being very often followed by dilapidation by arcident: the latter term is still more nearly connected with the word misuse, which occupies the place here given to "accident in the Report upon Milapidations, published in 1844 by the Royal Institute of British Architects. This Report does not define its meaning of the word misuse; it is clearly not the meaning in which the term is generally employed; for the Report says, “ If the effects of use or age have proceeded so far as to destroy the part or its efficiency in the structure, this argues neglect or misuse." The student will find it advantageous to stuiy the Report, and especially the specification contained therein.
This specification instructs the mason“ in cases of broken nosings, or of the treads being worn to such an extent as to render the passing up and down dangerous,” to piece as described the step ; and also directs the joiner “ to put nosings to stairs where partially defective, and treads where wholly so." There is in appearance a contradiction between these views upon worn steps and that given in the commencement of this chapter; but the practised surveyor will see that they are easily reconciled, and that his judgment must decide which is, and which is not, fair use and wear. It is to be regretted that the clear and discriminating section on dilapidations in Chambers and Tattersall, Laws reluting to Building, 1845, contains a sweeping condemnation of this Report, which is in no way authorised by the evidence adduced.
We have added to the usual definition of dilapidation, namely any injury through accia dent, misuse, or neglect, the word intention ; and the propriety of the addition, as meaning soinething different from wilful waste, will be obvious. The erection of a photographer's room on the top of a house in one street may be deemed an injury, and be claimed as dilapidation by a lessor, who would demand the removal of it and the restoration of the roof; while in another street, and within a few yards of this dilapidation, the same lesor might consider the same work (if judiciously executed) an improvement which he would not allow to be removed. So also a grated iron door, instead of the common wooden one, and similar alterations, may become dilapidations of intention at the pleasure of the lessor. There is another point on which surveyors have frequently differed, namely the insertion of nails and screws for the suspension of frames of pictures, &c. This inay be now considered to be determined by the judgment in the case of Martin and another v, Roe (1857), where bot house frames, bedded in mortar on brick walls, had been removed without damage except what was unavoidable to the mortar. Lord Campbell said that, “in considering this question, we treat the removal by the plaintiff as having been in fact effected without in. jury to the freehold. In all cases of this kind, injury to the freehold must be spoken of with less than legal strictness. A screw or a nail can scarcely be drawn without some injury; and when all the harm done is that which is unavoidable to the mortar laid on brick walls, this is so trifling that the law, which is reasonable, will regard it as none." Among surveyors it has been held that what is nailed belongs to the freehold, but that which can be unscrewed does not, the careful withdrawal of the screw enabling the tenant to make good the hole.
Although there is a general impression that only damage of broken glass can be claimed from a yćarly tenant, he is to use the building in a husbandlike manner, and is bound to fair and tenantable repairs so far as to keep it wind and water tight and to prevent waste or decay.
It used to be sunposed that the judgment in the case of Wise v. Medcalf (1829) contained an exposition of the whole law on the subject of ecclesiastical dilapidation as far as regarded incumbents; and the decision, which is contained in the following words, should be always in the mind of the surveyor:-“ Upon the whole, we are of opinion the incumbent was bound to maintain the parsonage (which we must assume upon this case to have been suitable in point of size and other respects to the benefice) and also the chancel, and to keep them in good and substantial repair ; restoring and rebuilding when necessary, according to the original form, without addition or modern improvement; and that he was not bound to supply or maintain anything in the nature of ornament, to which painting (unless necessary to preserve exposed timbers from decay) and whitewashing, and papering belong." This decision is held to establish the principle that the executors of a deceased incumbent are bound to perform those repairs wliich are necessary to prevent decay, and to use all reasonable means for preventing any future decay. The case of Mason v. Lambert (1848) showed that perpetual curates were liable as incumbents for these dilapidations. We have therefore to add, in ecclesiastical cases, any provision against prospective injury; such as paint necessary to preserve exposed woodwork from decay, the insertion of ties to plates taking the feet of rafters, the underpinning of walls at cracks showing continual settlement: these might be entitled dilapidations of precaution, and ought to include the immediate destruction of any erections made by a late incumbent which were suitable to his private fortune rather than to the benefice, as seems to be indicated in the judgment given in the case of Martin and another o. Roe (1857), wherein it is observed that, " as to any matter of needless expense or luxury or ornament by which the present incumbent his grat, fied his own taste or increased his own