There are numerous circumstances in which clients will require a valuation report undertaken and written by an RICS Registered Valuer including tax planning, pre-purchase, matrimonial or to be used in court proceedings. As a general rule, the majority of valuations will fall under the RICS Valuation Standards Manual (known as ‘The Red Book’) and will have to meet the governing body’s strict criteria.
The following are examples of the types of valuation reports produced by Carter Fielding Surveyors:
Although we strongly recommend that potential purchasers obtain either an RICS Homebuyer Report or a Building Survey there are occasions when only a valuation report is required. These are prepared in accordance with the guidelines laid down in the RICS Red Book.
This type of report only contains brief comments on the condition of a property and may recommend that a survey is obtained. However, in most instances the Valuer should be able to confirm whether or not the client is purchasing the property for what is considered to be a reasonable price.
When a person dies their estate must be valued so that any inheritance tax that is owed can be calculated. A probate valuation will be an accurate reflection of what the property would sell for on the open market on the date that the owner died and is prepared in accordance with the guidelines laid down in the RICS Red Book.
As the report will be produced by an RICS Registered Valuer, HM Revenue and Customs will accept it as being suitable for use in determining the value of the property in contrast to an estate agent’s market appraisal which really just confirms the price at which they would recommend marketing the property for sale.
On the rare occasions HMRC challenge the report, believing that the figure stated is too low, the Valuer can be instructed to justify his/her reasoning by reference to the inspection site notes and the comparable sales data used.
When a couple separate, the assets of the two will need to be valued and this will often include property. A report will need to be prepared by an RICS Registered Valuer who will determine the market value of the property at a given date.
This can be either for use in relatively informal settlements between the parties or for use in more formal court proceedings and would be governed by the RICS Red Book guidance in either case.
There are numerous scenarios in which a surveyor could be required to provide a valuation to a Court and as per the examples above the report would need to be prepared in accordance with the Red Book. The Valuer will also have to comply with the Civil Procedure Rules – Part 35 for expert witnesses and assessors.
Whilst not confined to just London, numerous developments have been sold over the past decade offering owners either the option to own a percentage of the property or to take out an equity loan against part of it. In either case, when the property is sold, the percentage which the leaseholder does not own or has a loan against will need to be valued in accordance with the RICS Red Book.
It is becoming increasingly common for leaseholder owners of top floor flats to research the possibility of extending into the roof space above only to find that it is owned by the freeholder. In such circumstances they will need to purchase the space and obtain a licence to Alter from the freeholder. A valuation report will be required to assist in determining the price.
You can read more about the technical aspects of this type of valuation on our blog but the basic premise is that any profit that arises from the development will be split 50/50 between the leaseholder and the freeholder.
Similar principles apply to the valuation of basement extensions and expansions out onto terraces. Whist the premium to be paid for the space is ultimately subject to negotiation (and therefore not governed by the Red Book) we prepare the relevant valuations in accordance with RICS Red Book guidance as that is considered to be best practice.
When looking to undertake works there are numerous things to consider and professionals to instruct. Drawings for planning and then Building Regulations, the structural design and calculations, party wall surveyors and perhaps a solicitor for amendments to legal titles etc. but one requirement that is often little understood is ... Read More >>
Leaseholders have the right to extend their leases under the Leasehold Reform, Housing and Urban Development Act 1993. Under the 1993 Act leaseholders are entitled to a 90 year lease extension and a reduction of their ground rent to a peppercorn. In return they must pay their freeholder compensation, call a premium. The ... Read More >>
Leaseholders have the right to extend their leases under the Leasehold Reform, Housing and Urban Development Act 1993. Under the legislation the owner of a leasehold flat has the right to request a new lease which is 90 years longer than their current lease and at a peppercorn ground rent throughout. In order to qualify ... Read More >>