General

Question 1

Tell me about a recent negligence case in valuation?

Answer 1

Webb and Blemain vs eSurv 2012

1. 2 Separate claims brought against Esurv’s surveyors by who had negligently overvalued property by 11.4% and 21%.
2. Court considered the approach to liability was to consider the margin of error rather than the approach to the valuation.
3. For standard residential property, the acceptable margin for error was 5%, for a one of property 10%, and there are truly distinctive features then 15%
4. In the Webb case, the court ruled the appropriate margin for error was 5% and in the Bleiman case, it was 10%. Therefore making both valuations negligent.

Question 2

How do you think Covid will affect your market?

Answer 2

Industrial property has fared strongly post lockdown. i have dealt with a couple of new lettings that achieved 10% in excess of asking price.

I think there will be a reduced demand for offices and town centre shops, which would create downward pressure on rents and upward pressure on yields. A lot of town centre offices in King’s Lynn are predominately converted period properties, so I would like to see these converted back to residential so more people are living in the town centre and then the new planning use class order will provide the flexibility for town centre shops to offer a more retail / leisure use.

Question 3

What 3 things should you do before accepting a valuation instruction?

Answer 3

1. Am I competent?
2. Conflict of interest check?
3. Agree terms of engagement

Question 4

What is the importance of undertaking due diligence in a valuation?

Answer 4

To ensure you are aware of any issues that would have an impact on the valuation, so you can then provide accurate advice to the client.

Question 5

What types of due diligence should you check?

Answer 5

1. Contamination
2. Environmental matters
3. Flooding
4. Asbestos register
5. Highways
6. Planning
7. Title and tenure
8. Fire safety compliance
9. Health and Safety compliance

Question 6

What 4 things must you do when conducting a valuation with restricted information or without a physical inspection?

Answer 6

1. Agree the restriction in the terms of engagement
2. Confirm possible valuation implications in writing before reporting the value
3. Valuer should consider whether the restriction is reasonable
4. Reference the restriction in the report

Question 7

How would you carry out a valuation differently if you were instructed today as a result of Covid-19?

Answer 7

1. It may not be possible to physically inspect the property, so would have to ensure this restriction is agreed and documented in the ToE and valuation report to comply with VPS 2.
2. I would have regard to RICS advice regarding material uncertainty and whether there is any material uncertainty that exists in the local market. If there is, I would include a material uncertainty clause in accordance with VPGA 10.
3. Market rent selection unlikely to be impacted unless the evidence supported downward pressure, however yield selection would be subject to upward pressure due to increased risks. Would judge market sentiment from local agents

Question 8

How do you record your comparable evidence?

Answer 8

I record it in a matrix and include details about the property, type of transaction, details about the lease and whether any adjustments should be made to the subject property.