RICS draft guidance note - Valuation of development land, 1st edition

Valuation of development land, 1st edition

3 Establishing the facts

3.1 To judge the certainty of the outcome of the valuation, and the processes involved, it is essential that the valuer have an awareness of the characteristics of the existing site and an adequate knowledge of each of the development components. The level of detail that is appropriate when assessing development potential may vary according to the purpose of the valuation. Judgement is required as to what is appropriate in each case.

3.2 The extent of factual information necessary for a valuation is determined by a range of factors, including the stage at which the valuation is being prepared, the purpose and the individual characteristics of the property being valued and any assumptions or special assumptions made. Moreover, local market intelligence is a key element of establishing relevant information for the valuation of a development property. Appendix A sets out a generic list of possible factual issues to be investigated.

3.3 In establishing the facts, as well as the Red Book, there are a number of documents that should be considered:

  • RICS property measurement (2nd edition), RICS professional statement
  • Environmental risks and global real estate (1st edition), RICS guidance note and
  • International Property Measurement Standards.

3.4 The precise nature of the purpose, basis, assumptions and facts underpinning the valuation is a key component of any valuation litigation. It is essential that these are all set out clearly in the valuation instructions and report.

The extent of factual information necessary for a valuation is determined by a range of factors, including the stage at which the valuation is being prepared, the purpose and the individual characteristics of the property being valued and any assumptions or special assumptions made.