BASICS OF VALUATION USEFUL FOR ALL PROFESSIONALS
INTRODUCTION OF VALUATION
What is Valuation?
Valuation is the technique of estimation or determining the fair price or value of property such as building, a industry, other engineering structures of various types, land etc. By valuation the present value of a property is defined. Valuation is an estimation of the worth of something, especially one carried out by a professional valuer. Valuation of Real Estate is a multidisciplinary subject involving study of economics……………. READ MORE
VALUERS ROLE, FUNCTION AND RESPONSIBILITIES
Role of a Valuer
- Valuer acts as a Advisor
He Gives opinion to his client
- Helps to find Fair Market Value and Interest
- To take financial decision
- Advise on change in possible rental and capital value
- For investment suggestion on policy matter, sinking fund
- Land acquisition case – Date of valuation / Date of notification
- Estate management
- Maximum income and capital value
- Securing good maintenance
- Increase or decrease in capital value
- To check reasonableness of present rent and
- Provisions for reserve for future
- Must deliver own independent honest and conscious
PURPOSES OF VALUATION
In real properties, there are various purposes for which valuation may be required. It is essential to know exactly for what purpose the valuation is being prepared. Valuation is an art and professionals have to consider all pros and cons of the various factors affecting valuation. Broadly speaking, valuation may be required to be done for the following purposes.
Valuation Report should create interest in the mind of a reader to read it from the beginning to the end, like reading a story or a novel. It is therefore necessary that a report should have certain specific qualities. The valuer receives instructions from the client to carry out valuation of land and building. The valuer performs his duty as per the Terms of Reference and estimates value.
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Code of Professional Ethics & Conducts and Definitions
In ancient Greece, Hippocrates postulated a Code of Professional ethics for physicians that emphasized service to the patient and the advancement of the healing arts over the comfort and profit of the physician.
Many common themes are found in the codes of ethics of various professions.
Nearly all codes of ethics of various profession contains:
- Strict requirements for ethical behavior, honesty, integrity.
- Requirements to assist the profession in enforcing its code of conduct
- Strict requirements regarding competent performance.
- Provisions addressing problems that can arise when a conflict exists between the interests of the client and the professional practitioner.
The most significant thing of any profession is its ability to promote and maintain public trust. Without which, (that means the public to have confidence in the services provided by the professionals) that profession will not survive. Trust means “faith in.” “Confidence in, “the ability to rely upon,” Public can be defined broadly as “all people,” or narrowly as “all people who use the professional’s services.”
SPECIFIC PROVISIONS WHICH REQUIRE VALUATION REPORT FROM A REGISTERED VALUER
WHO CAN BE A REGISTERED VALUER?
A person, who aspire to be a registered valuer, is required to possess certain qualifications and experience, obtain membership of a recognized organization of valuers and get itself registered as a valuer with IBBI.
The RV Rules sets out in detail the eligibility criteria, educational qualifications (degree), experience, and procedure for registration of a valuer. However, such valuer will not undertake valuation of any assets in which he has a direct or indirect interest or becomes so interested at any time during a period of three years prior to his appointment as valuer or three years after the valuation of assets was conducted by him.
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