The Red Book

Question 1

The Red Book - full name and date

Answer 1

RICS Valuation - Global Standards 2021
(Red Book Global)
Effective 31st Jan 2022

Question 2

Part 1 and Part 2

Answer 2

Intro and glossary

Question 3

Part 3

Answer 3

Professional Standards

Question 4

PS1 =

Answer 4

5 exceptions to depart from red book compliance
- Statutory purposes e.g. tax
- Agency opinion of value
- Internal purposes
- Negotiation and litigation
- Expert witness - in anticipation of giving evidence

Question 5

PS2 = Ethics, competency and objectivity

Answer 5

COI
RICS rules of conduct
Demonstrate professional competence

Question 6

VPS

Answer 6

Valuation technical and performance standards

Question 7

VPS 1

Answer 7

ToE

Question 8

VPS 2

Answer 8

Inspections, Investigations and Records
- desktop valuations - if asked need to consider: nature of restriction agreed in ToE, possible valuation implications should be confirmed in writing, is the restriction reasonable, restriction referred to in the report

Question 9

VPS 3

Answer 9

reporting - contents of the report

Question 10

Draft report - purpose?

Answer 10

Preliminary advice to be marked as draft and for internal purposes
can discuss the figure with the client but cannot be changed unless new material evidence comes to light.
Reasons for change must be noted on file

Question 11

VPS 4

Answer 11

Basis of value, assumptions and special assumptions:
- Market Rent, Market Value, Fair Value and Investment Value (Liquidation Value, Equitable Value)
- assumption is something that you assume to be true for the valuation without having to investigate e.g. good repair
- special assumption is something is not true but you take it to be for the valuation (realistic, relevant and valid)

Question 12

VPS 5 (IVS 105)

Answer 12

Valuation approaches and methods
APPROACHES = market, income and profit
METHODS = comparable, investment, residual, DRC, profit

Question 13

VPGA

Answer 13

Valuation Practice Guidance Applications

Question 14

VPGA1

Answer 14

for financial purposes

Question 15

VPGA2

Answer 15

for loan security purposes:
- 2 year conflict check
- Disclose COI in report
- Valuation methodology adopted
- Recent transaction occurred, state t and how much it affected the opinion of value
- environmental considerations
- suitability for LS
- SA material difference

Question 16

VPGA8

Answer 16

Valuation of real property interests
covers inspection and investigation with emphasis on ESG
- ESG - indirect (regulation, co2 emissions) and direct (flood risk) impact

NEED TO CONSIDER IN VAL

Question 17

VPGA10

Answer 17

Matters that give rise to material uncertainty
- report must not be misleading
- valuer must draw attention to any issues surrounding the uncertainty of the valuation and a date

Question 18

Part 6 of Red Book = IVS

Answer 18

General Standards (ToE, basis etc)
Asset Standards (related to specific type of property)