EWJ August 62 2025 web - Journal - Page 90
petrol stations are valued by reference to trading
potential and these are areas where a great deal of
specialist expertise is required. So, a valuer is looking
to see if they are competent and experienced in the
relevant sector.
will need to factor in more time for research than
would normally be the case. If there is development
potential especially if planning permission has been
obtained, then the parties may wish for this to be
considered. As such giving a ‘heads up’ to the valuer
initially of this likely instruction will enable an accurate
fee quote to be provided.
In cases where there is a portfolio of property in
multiple locations and/or in different sectors, you may
need to find more than one expert valuer although
some valuers, myself included, consider ourselves able
to deal with both residential and mainstream
commercial property within limits.
Finally it is always useful if, in the case of a Single Joint
Expert valuation, the parties’ opinion of value is
known. This is not to make the job of the valuer easier (although it does aid an understanding of the likely
value) but to establish if one party is in possession of
more information than another, information which
again may well affect the value reported.
Once it is established that a valuer is able to ‘hold
themselves out’ as a suitable expert witness, the fee
then needs to be considered and there are several
aspects to a property and the instructions which will
affect the fee quoted. Unless in very unusual case, fees
are quoted on a fixed basis and usually relate to the
valuer’s initial impression of the value based upon the
information provided. It is always good practice to
advise the valuer of any special instructions that may
be issued over and above the basic instruction of ‘what
is it worth?’.
On receipt of instructions
Having had a fee quote accepted and then received
instructions, the next task is to undertake due
diligence. It is common practice to ask valuers how
long it will take to receive a report once instructions
have arrived. Experienced lawyers will understand
the issues in this area. To comply with the Red Book
and the Practice Statement, we need to issue Terms of
Engagement to the parties and these do need be
signed and returned to the valuer. The Terms contain
not only important aspects of the job such who are the
clients, what is being valued and how much is the fee
and when the fee will be paid but it also contains matters such what level of inspection will be carried out,
what investigations will be undertaken, what information will be contained in the report and the definition
of value. These signed Terms must be included in the
report and the rubric of the report mirrors the text of
the Terms; so the Terms might say ‘..I will check the
Valuation Office website for the Rateable Value of the
property..’ and the report would say ‘..I checked the
Valuation Office website for the Rateable Value of the
property and it has a Rateable Value of £10,000..’.
Whilst the most obvious aspect of a property which
affects the value and hence the fee is its size, a modern
warehouse of say 10,000sq ft valued at £1,000,000 will
take a lot less time to inspect than a multi-storey Victorian office building of similar value but with many
rooms, each of which will need to be individually measured. There are likely to be more defects or other issues which will need to be reported and which will add
to the time during inspection and writing the report.
Thus, the fees charged for these buildings are likely to
be different. From this point on, anything which increases the workload on the valuer could add to the
fees depending upon the nature of the instructions.
Referring back to the initial list of questions, you will
have noted that I asked if I could receive the Title
Number of the property. This can be important in various ways. Firstly I can determine the extent of the
property. Is it simply a building with a reasonable
amount of curtilage land or does it sit in a much larger
than expected site which may add value. Secondly it
can be determined if the property is held leasehold or
freehold. A leasehold property may be held on a short
lease or with other terms that can have a dramatic effect on value. Again this information should be made
available if multiple values are required depending on
potential circumstances.
Most valuers will be reluctant to arrange the
inspection until the Terms have been returned as that
guarantees that the parties accept liability to pay the fee.
So the process of due diligence only operates as
quickly as the parties return the Terms to the valuer
and also how quickly the inspection of the property
can be arranged. A property which is owner occupied
can usually be inspected on limited notice but a tenanted property may take a while to arrange as formal
notice has to be given to tenant and the arrangements
need to dovetail with the valuer’s diary.
If a property is tenanted, then the value is not simply
related to the value of similar property nearby. It is
related to the income, the security of that income and
whether the rent is at market level or above or below
market level. This can add another dimension to the
valuation, requiring further research and analysis
before a valuation can be formulated.
The valuation inspection is not a building survey and
only obvious defects which have bearing on value will
be noted and reported. Whilst some desktop research
can be carried out prior to the inspection, generally it
will be undertaken after, once the site is understood
by the valuer.
Most of the points noted above which relate to the fees,
will also affect the value so the valuer will pool all the
information together to consider the good and
bad points and come to an assessment of where the
property sits in the market. They will then seek out
relevant comparable evidence from a variety of
sources including agents active in that location or
The last question about the property relates to
development potential or other aspects that could
affect value such as contamination. If the parties are
aware of any issues which would affect value it is best
to mention it during the fee quotation process. This is
because the valuer may not have the expertise or
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