Professional Documents
Culture Documents
Anthony Baneld
A valuers guide to
the RICS Red Book
2014
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Published by the Royal Institution of Chartered Surveyors (RICS)
Parliament Square
London
SW1P 3AD
www.rics.org
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Contents
Foreword xvii
Preface xix
Introduction 1
Principal purpose 1
International Valuation Standards Council
(IVSC) 3
Structure of the Red Book 4
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6 Valuation reports 85
Special assumptions 88
Reporting depreciated replacement cost
valuations 89
Negative values 90
Preliminary valuation advice and discussions
with the client 90
Publication statement 91
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Questions 96
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Appendices
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Index 212
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Valuation reports
My client does not want a long valuation report.
May I write a simple letter and call it an informal
valuation? 96
How should I deal with a special assumption in
my report? 97
How do I report a negative value? 97
How do I incorporate the valuation of a subvaluer? 97
May I submit a preliminary report to my client? 97
What do I do when my client wants to refer to my
valuation report in his published accounts? 98
How do I report an assessment of worth? 98
Who may sign a valuation report? 99
Should my report be dated the same date as the
valuation date? 99
I valued a property for a clients accounts 12
months ago and gave him a full report. For an
update for his year-end accounts can I do a simple
letter referring to the previous valuation and
confirm my latest opinion of value? 100
My client wishes to discuss the valuation before I
sign it off. May I do this? 100
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Specialist valuations
What should I give a client who has asked for a
valuation for probate purposes? 175
How should I deal with requests for valuations for
capital gains tax or inheritance tax to provide high
or low valuations to suit clients tax circumstances?175
Are valuations for equity release plans regulated
purpose valuations? 175
Surely every valuation is subject to a range. Can I
provide a bottom of the range figure for
inheritance tax and a top of the range figure for
capital gains tax? 176
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Foreword
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Foreword
xviii
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Preface
Columns Design XML Ltd / Job: A5_Guides_Soft-proofing / Division: VGfinalproofMW /Pg. Position: 1 / Date: 5/12
Preface
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Preface
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Preface
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Introduction
Principal purpose
The principal purpose of the standards contained in the
RICS Valuation Professional Standards January 2014
(Red Book 2014) are clearly set out as the Overall
purpose in paragraphs 16 of the Introduction:
1 Consistency, objectivity and transparency are
fundamental to building and sustaining public
confidence and trust in valuation. In turn their
achievement depends crucially on possessing and
deploying the appropriate skills, knowledge,
experience and ethical behaviour, both to form sound
judgments and to report opinions of value clearly and
unambiguously to clients and other valuation users.
2 Globally recognised high level valuation principles
and definitions are now embodied in the
International Valuation Standards (IVS) published by
the International Valuation Standards Council
(IVSC). RICS has long been a supporter of the
development of such universal standards, and not
only fully embraces them itself, but also proactively
supports their adoption by others around the world.
3 But acceptance alone is not enough effective
implementation is the key. If confidence and public
trust in the valuation process is to be achieved,
standards must not only be uniformly interpreted and
consistently applied but also actively monitored and
enforced.
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A valuers guide to the RICS Red Book 2014
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Introduction
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A valuers guide to the RICS Red Book 2014
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Introduction
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A valuers guide to the RICS Red Book 2014
National standards
Additionally, the UK edition of the Red Book contains
RICS UK Valuation Standards (UKVS), RICS UK
Appendices and RICS UK Valuation Practice Guidance
Notes. These are provided to cover specific statutory or
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Introduction
Glossary
There is a comprehensive glossary defining terms used in
the Red Book that have a special or restricted meaning.
The glossary ranges from assumption to worth. You
are advised to refer to the glossary when considering
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A valuers guide to the RICS Red Book 2014
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Red Book route
1 map
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A valuers guide to the RICS Red Book 2014
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Red Book route map
A: Preliminary questions
Before commencing any valuation there are seven basic
questions the valuer should ask. The answer to some of
the questions will be relevant to proper compliance with
some of the standards.
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A valuers guide to the RICS Red Book 2014
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Red Book route map
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A valuers guide to the RICS Red Book 2014
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Red Book route map
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A valuers guide to the RICS Red Book 2014
C:Valuation preparation
The chart below is a simplified valuation preparation
procedure (found mainly in VPS 2). The aim is to ensure
that all relevant enquiries are made and uncertainties are
resolved before proceeding to a valuation calculation.
Where information is obtained or verified, the file notes
should clearly show the decisions made or actions taken.
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Red Book route map
D: Reporting
The report must include all the matters agreed in the
terms of engagement and not introduce any new terms.
VPS 3 contains further information on the minimum
matters and this flowchart draws the valuers attention to
valuation standards that need consideration. This is not
an index to the valuation standards.
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A valuers guide to the RICS Red Book 2014
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Red Book route map
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