Privacy is a big issue. Data-mining, technically the extraction of information from a dataset to transform it into an understandable structure for further use, or in buzzword parlance the extraction of patterns and knowledge from large amount of data, not the extraction of data itself.
Nothing new about data-mining, the manual extraction of data has gone on for centuries. What’s new is that the proliferation and increasing power of computer technology has dramatically increased data collection, storage, and the ability for manipulation. In business, the goal of data-mining is to reveal hidden patterns and trends; market analysis to identify new products, finding the cause of manufacturing problems, to prevent customer attrition and acquire new customers, cross-selling to existing customers, and profiling customers with more accuracy.
Business is about helping in exchange for money. Anyone can make money by helping what is needed today which is why most markets are so competitive, but the big profits come from anticipating what will be needed in future and being there to provide it. By identifying what customers are buying now, and why. a business can capitalise on the demand.
Whether large or small, the challenge for all businesses is to understand the customer. Understanding the customer when the customer may not understand themselves may sound like a tall order but, unless the business sells psychological services, most businesses are superficial with their analysis. Not so much interested in the individual, so much as how common traits can be exploited. Although many people find the amount of information stored about us by companies rather disturbing, fact is that from the moment we’re born, if not before, details of our existence are stored for use by someone somewhere.
Since data mining is nothing new, I find it fascinating that everything there is to know about someone isn’t known already, but apparently not. Obtain the information isn’t that difficult. Whenever we sign up for something or go on-line, reading the ‘small print’ in the terms and conditions is not something most of us do. So arguably it’s not really that the information is stored, but whether we should be asked for our permission for the information someone has about us to be used.
A quirk of the commercial property market is that while evidence of what other landlords and tenants have agreed is critical to the rent review system, landlords and tenants cannot normally be forced to disclose details of their agreements. Ironically, there is an abundance of information for most other things. For example, when the tenant is a limited company whose registered office is in England & Wales, information about directors, shareholders, charges, details that might come in handy, can be obtained from Companies House and ilk. But for a key element and integral feature of commercial property investment, it can come as a surprise for newbie landlords to discover there is no open source for rental information. The closest there is to an open resource is the Valuation Office Agency’s list for Rateable Value. But rating areas are notoriously unreliable, the antecedent valuation date for each revaluation is normally two years preceding so out of date, and the Rateable Value itself of no consequence except for calculating business rates.
The rent that landlord A gets from tenant B is nothing whatsoever to do with landlord C or tenant D, yet it’s important for C and D to have the facts, because rent review is largely based on evidence. Only if A-B’s lease has been registered might one then obtain a copy from the Land Registry; but the copy lease might not be the only material document; there could be a side-letter, a licence, a deed or variation, or whatever; and even if registered, the parties might have exempted salient information, such as the rent.
What is C or D to do? The answer is to ask nicely. Whether A or B responds depends upon the benefit to A or B in doing so. Frequently, A and/B have surveyors acting for them. The surveyors may not be receptive, what’s in it for them? And if they were to be forthcoming, how can you be sure the information provided is accurate?
The answer is you can’t be 100% certain unless you dealt with the property yourself, and have all the facts at your fingertips. Most surveyors, myself included, do not always get involved with the drafting and approval of the documentation, so there may be something in the wording of the lease that could affect the devaluation. While wherever possible I liaise with the client’s solicitors on finalising documentation, some clients do not consult and the first that I discover that had I been consulted I should not have advised on a particular word or phrase is when something involving the property crops up and the other party seizes it to use to their advantage.
It is not only rent review and lease renewal where privacy is a valuable commodity. Shrewd landlords, quoted property companies, REITS, are fond of talking about the relationships they have with their tenants. There’s a reason for that: they (the landlords) want to be the first to know. Not for them a request for licence to assign coming out of the blue and running the risk of down-valuing the investment. By being prepared, landlords can actively manage their portfolios by selling assets where there is a strong likelihood the investment is ex-growth. If you’ve ever wondered why there are so many properties for sale by auction month after month, it’s not just that auction has taken over from private treaty as the preferred means of selling, but that property investment is also unstable and getting rid of ex-growth is an on-going process in the pursuit of perfection.
Although property transactions are private contracts between two parties, seller or landlord and buyer or tenant, the property industry thrives upon the free circulation of evidence, much of it gleaned from surveyors who see no harm in disclosing confidences without asking the client for permission. Occasionally, one hears bleating of discontent, but mostly landlords and tenants accommodate the breach of trust because they never know when they too might need help.