Valuation of Property – Terms of engagement

1. The purpose for which the valuation of the property is required shall be to provide an opinion of the value of the Freehold/Leasehold interest in the property, as specified by the Client and set out in the enclosed report accompanying these terms.
2. Our Valuation Report has been prepared in accordance with The Royal Institution of Chartered Surveyors 31^st January 2020 Global Valuation Standards (incorporating the International Valuation Standards) –  Consideration is also given to RICS Global Valuation Practice Guidance. You are advised that compliance with these Valuation Standards may be investigated by RICS for the purposes of the administration of the Institution’s conduct and disciplinary regulations. 
3. The general terms upon which we accept this instruction are set out in the Standard Terms of Engagement which should be read in conjunction with each report provided.
4. The purpose of the valuation is to provide a market value for a property in respect of your intention to redeem your Help to Buy or similar scheme loan. V.P.S 4 (para 8) confirms that this report is carried out within a reasonable time frame and at an affordable cost and as such these terms confirm what we will do and what we wont do, as well as our default assumptions.
5. The basis for the valuation is Market Value – “The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing, and where the parties had acted knowledgeably, prudently and without compulsion.”

6. Valuation Practice Statement 5 now requires us to identify the valuation method. The methodology considered most appropriate for this valuation is the Market Approach (Comparison).

7. We confirm that we adhere to RICS Practice statement – 1^st edition February 2019 – which came into effect 1st September 2019 – regarding Countering bribery, corruption, money laundering and terrorist financing.

8. Valuation Practice Statement 2 – para 1.5 – requires us to bring required levels of independence and objectivity to bear on individual assignments, applying professional scepticism to information and data where it is relied upon as evidence. Professional scepticism is an attitude that includes a questioning mind, critically assessing evidence relied upon in the valuation process and being alert to conditions which may cause information provided to be misleading.
   

9. The Law and regulations covering data protection and use of personal data have changed in May 2018.  Personal data is information about a person which that individual “owns”.  Everyone has rights to prevent it being used by others either without their consent or for some lawful or justified purpose.  We have provided you with our understanding of the contract that we share with each other regarding the transfer and use of personal data. This forms part of our Terms of Engagement
    

10. It is confirmed that the firm and the valuer named above have no known interest in the property or any other conflict that will prevent the valuation being undertaken and that the valuer will be acting as an external valuer.
11. I confirm that the nature and source of any third party information that the client has provided is to be relied upon in the report. This also includes information provided by Estate Agents, web sites and other sources.
12. We confirm that we do not pay referral fees or equivalent to any third party who may have recommended them.

Unless otherwise specifically agreed in writing the value advised by the Valuer shall be in accordance with one or more of the following definitions:-

13. The extent of the Valuers investigations – The Valuer shall have regard to the apparent state of repair and condition of the property but shall be under no duty to carry out a structural survey of the property nor to inspect woodwork or other parts of the structure which are covered, unexposed or inaccessible and will not undertake the testing of electrical, heating or other services. Furthermore he will be entitled to assume that an inspection of such areas would not reveal defects of sufficient magnitude to require him to make a material adjustment to his valuation.
14. In the course of his report the Surveyor will draw attention to any communal aspects and will comment upon shared driveways etc., but only to the extent where these may have an effect upon value.
15. The nature and source of the information to be relied upon by the Valuer – The Valuer shall unless otherwise expressly agreed rely upon information provided to him by the Client or the Client’s legal or other professional advisers relating to tenure, tenancies and other relevant matters. It is the responsibility of the Client or the Client’s legal or other professional advisers to ensure this information is accurate and advise the Valuer if it is not.

 

In making the report, the following assumptions will be made:

• The valuation is based on the assumption that the property is being sold with vacant possession and unless otherwise stated for owner occupation;
• That the property is not subject to any unusual or especially onerous restrictions, encumbrances or outgoings and that good title can be shown unless revealed from routine enquiries;
• That the property and its value are unaffected by any statutory notice, and that neither the property, nor its condition, nor its use, nor its intended use, is or will be unlawful unless revealed from routine enquiries;
• That the property is not subject to any adverse planning regulations or conditions, building warrants, onerous restrictions etc. unless revealed from routine enquiries;
• It is assumed that unless otherwise stated, roads, sewers and services outside the curtilage of the property are the responsibility of the local relevant statutory body. The Valuer will also assume, unless otherwise stated, that all services, roads etc. are available under normal terms unless revealed from routine enquiries;
• That subsequent inspection of those parts which have not been inspected would neither reveal material defects nor cause the Valuer to alter the valuation materially;
• That the property is free from other environmental considerations such as abnormal ground conditions, historic mining quarrying or landfill, coastal erosion, flood risk, high voltage equipment and/or cables, invasive vegetation etc. unless evident from our inspection and/or revealed from routine enquiries.
• That the property is free from contamination, or potential contamination, of poisons, pollutants, Radon gas, Mundic or other materials requiring invasive treatment works unless evident from our inspection and/or revealed from routine enquiries;
• That no high alumina cement concrete, calcium chloride additive, woodwool shuttering or other potentially deleterious material was used in the construction of the property or has since been incorporated unless evident from our inspection and/or revealed from routine enquiries;
• That no asbestos or any other hazardous substances, materials or techniques was used in the construction of the property or has since been incorporated unless evident from our inspection and/or revealed from routine enquiries.

Where evident from the inspection or revealed from routine enquiries, these matters above will be detailed in the report accordingly

16. The Valuer shall provide to the Client a report setting out his opinion of the value of the relevant interest in the property together with the valuation approach, the key valuation inputs used and reasons for the conclusions reached. The report will meet the conditions

set out in these terms of engagement and will meet the minimum requirements of Valuation Practice Statement 3. Furthermore, the report will be provided for the stated

purposes and for the sole use of the named Client. It will be confidential to the Client and his professional advisers. The Valuer accepts responsibility to the Client alone that the report will be prepared with the skill, care and diligence reasonably to be expected of a competent Chartered Surveyor, but accepts no responsibility whatsoever to any person other than the Client himself. Any such person relies upon the report at his own risk. Neither the whole nor any part of the report or any reference to it may be included in any published document, circular or statement nor published in any way without the Valuer’s written approval of the form and context in which it may appear.

17. The Client shall pay the Valuer in respect of the said professional advice a fee to be agreed between the Client and the Valuer. Please note that the fee should be paid

prior to release of the report. In addition, the Client will reimburse the Valuer the cost of all reasonable out-of-pocket expenses which he may incur and pay the amount of any Value Added Tax on the fee and expenses.

18. All monetary values will be quoted in £ sterling.
19. The report and its preparation are governed by the confirmation of instruction and standard terms of engagement attached thereto, which shall be read in conjunction herewith.
20. R J Harmer has prepared the report for the use only by the Client for the purpose stated within the instruction section of this report and for no other purpose whatsoever. R J Harmer accepts no responsibility or liability for its use by any third party for either the whole or parts of its content.
21. Neither the whole or any part of this report nor any reference thereto may be included in any published document, circular or statement nor published in any way without the prior written approval of R J Harmer as the form and context as to which it may appear.
22. No reliance should be placed by any third party on any statement or information contained within this report and neither RJH nor the authors of this report should be liable to any third party if it is relied upon.
23. For the purposes of preparing this report R J Harmer have been provided with various items of information by the Client or the Clients professionals advisors. Information is checked where appropriate but it is normally accepted as accurate unless contrary indications are received or noted at the time of the inspection.  Unless otherwise stated

R J Harmer have assumed that all of the information is valid for the purposes of this report.

24. In arriving at the views expressed in this report, R J Harmer have assumed that the instructing Client has made full disclosure of all matters, which would affect our views, which are based upon the information supplied, our inspection and further enquiries. R J Harmer take no responsibility for any mis-statement, omission or misrepresentation made to us.

 

25. Where the property is a new building or is subject to repair, refurbishment, redevelopment or other building works, R J Harmer are entitled to assume that all works will be carried out in accordance with all plans and other documents and costings provided to it and further that all such works will be to a good standard, meeting all relevant statutory and regulatory requirements and that all customer warranties, certificates, guarantees and approvals will be issued on completion of the works and will be capable of assignment to future owners and occupiers of the property.
26. Floor areas and dimensions are taken from inspection unless otherwise specified but are nevertheless approximate. All measurements are carried out in accordance with the current edition of the Code of Measuring Practice issued by the Royal Institution of Chartered Surveyors unless otherwise stated in this report.
27. Unless indicated to the contrary R J Harmer have not inspected the Title Deeds and no longer authority searches have been undertaken, nor have R J Harmer been advised of any outstanding notices, disputes or encumbrances, which would affect the property. Unless it is otherwise stated, it is assumed that there is good and clear Title to the property, which is capable of unrestricted transfer to a third party purchaser.
28. In the case of leasehold properties, unless indicated to the contrary, Title Deeds and/or lease documents have not been inspected and this report assumes that the interest in the property is as described to R J Harmer and as referred to in this report. R J Harmer also assume, except where noted, that all the covenants and restrictions of the lease have been complied with and that there are no breaches or disputes, which would adversely affect the opinion of value.  No allowance has been made for arrears of rent or service charges.
29. Unless otherwise stated R J Harmer have in the time available not carried out full planning enquiries and have arrived at the opinion of value upon the basis of the property described in this report complies with all local authority town planning, bye-law and statutory requirements and that appropriate planning consents have been granted where necessary.
30. Other than as revealed by enquiries made by R J Harmer and set out within this report,

R J Harmer have assumed that the property complies with all statutory and other requirements including town and country planning acts, building control regulations, the Environmental Health Act and all other relevant legislation.

31. Valuations may be relied upon for the stated purpose as at the date specified. In normal market conditions the value may not change materially in the short term. However, the property market is constantly changing and is susceptible to many external facets, which can affect business confidence.  If any reliance is to be placed on the valuation following any changes, which could affect business confidence, then further consultation is strongly recommended.  Therefore, the valuation is only valid at the date of this report.

The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a “Global Pandemic” on 11 March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries.

Market activity is being impacted in many sectors. As at the valuation date, R.J.Harmer Ltd consider that we can attach less weight to previous market evidence for comparison purposes, to inform opinions of value.  Indeed, the current response to COVID-19 means that we are faced with an unprecedented set of circumstances on which to base a judgement.

Our valuation is therefore reported on the basis of ‘material valuation uncertainty’ as per VPS 3 and VPGA 10 of the RICS Red Book Global. Consequently, less certainty – and a higher degree of caution – should be attached to our valuation than would normally be the case. Given the unknown future impact that COVID-19 might have on the real estate market, we recommend that you keep the valuation of this property under frequent review.

32. Please note that this valuation is NOT a valuation for loan purposes, whether for further advance or re-mortgage. A valuation for loan/mortgage purposes may differ from the Market Value provided as Building Societies and Banks have specific criteria for valuing for lending purposes. As previously noted, this valuation is provided for the specific attention of the client and should not be used for third party consideration.