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Regulated by the RICS

1. Objective

To provide a valuation for the client’s required purpose as quickly as reasonably possible, in compliance with the regulations, written in clear and unambiguous wording and presented in an easily understandable format.

2. Valuation Regulations
  1. Property valuations are regulated by the Royal Institution of Chartered Surveyors (RICS) and for commercial property the requirements are set out in a surveyor’s guide - the RICS Valuation Standards book, known as the “Red Book”. 
  2. There are basically two types of written valuation report for commercial property and which is appropriate will depend on the purpose of the valuation:
    1. A Red Book valuation will be required in most instances, including for company accounts – for secured lending (for bank or financial institution) - pension funds or similar requirements – or other situations where reliance will be placed by the recipient on the advice given.
    2. Valuations for other purposes are valuations not covered by the Red Book rules. Generally they are required in connection with litigation, arbitration or similar disputes, in preparation for or during negotiations (such as rent reviews) or in connection with and in anticipation of a sale or letting.
3. Procedure

It is necessary for the property to be inspected and details of the construction, condition and dimensions to be taken and floor areas assessed. Details of staff facilities and access arrangement such as heating and cooling systems, lifts, fire escapes and vehicle parking and manoeuvring space must also be considered.
Factual information must be obtained such as details of the legal title, lease(s) (if any), boundaries and their maintenance obligations, rights of way and the business rate assessment.  The permitted or potential uses including the planning and highways position must be considered, as must the availability of services and the potential for flooding in the area.  Environmental and possible contamination issues, including the neighbour’s activities, should be considered together with legal requirements such as compliance with Health & Safety Regulations and the Disability Discrimination Act.

4. Form of the Valuation Report
  1. The “Red Book” outlines the basis on which a valuation report should be set out and the matters which should be included in the text.  It requires formal agreement of the surveyors Terms and Conditions of Engagement and a copy of these would normally be included in the report.  These requirements are mandatory for all members of the RICS.
  2. The report in respect of a valuation for other purposes can be less detailed but should include sufficient information to clearly identify the property and the interest or title to be valued and the purpose of the valuation and other relevant information. 
5. Registration Scheme

The RICS maintains a scheme for the registration of valuation surveyor members and this includes monitoring their performance standards. To carry out formal valuations a member must be registered under the scheme and can use the designation RICS Registered Valuer.

Notes from the RICS - Why Use an RICS Valuer         

  • The RICS is the world’s leading qualification for valuation professionals.
  • The RICS practice standards require the highest ethics.
  • The RICS registered valuers are strictly regulated and monitored.
  • The RICS registered valuers should provide a high level of service, independence and objectivity, clear valuation reporting and to make full disclosure and avoid conflicts of interest.

Please contact us on 01603 488023 (quoting 3. Rating. List 2010.  110503) if you are in need of advice or assistance on this topic