As landlord and tenant responsibilities both involve commitments to a building, both parties have an interest in the value of that building. Similarly, as part of their contracts, both parties carry accountability in the upkeep of the building. At key points, a property valuation report will take place. When it comes to lease renewal, company finances, or the sale of the building, the value of that building can impact contracts and finances for both parties. So it’s important that a valuation is accurate and impartial to avoid dispute.
When might a property valuation report be required?
A valuation by a RICS accredited surveyor is not only required as part of the sale of a building. It may be required as part of capital gains tax calculation, loan security assessment, stamp duty assessment, rental value assessment, lease renewal and end of tenancy liability. When the resultant report carries a financial impact on one or both parties, it can become contentious.
What is a valuation dispute?
On occasion, the parties who hold an interest in a building may not agree on the results of a property valuation report. Therefore a disagreement between, for example, landlord and tenant occurs. It may be that the disparate views can be mediated and an agreement reached. If not, however, a dispute will arise.
When do disputes arise?
A property valuation report is especially open to dispute when neglect to a building is the cause of a decrease in valuation. This neglect is often conflicting the terms of a contract and so the value of the property becomes entangled in more complex legal liability dispute.
What role do property valuation reports play?
To prevent a dispute from arising, or progressing, seek the services of a RICS Registered Valuer or Chartered Surveyor. These representatives are regulated and independent. They will conduct an inspection of the property and provide a property valuation report. RICS, the Royal Institution of Chartered Surveyors is a source that you can rely upon to receive an impartial report. As such, the resulting valuation can provide the clarity of information and evidence to allow both parties to come to a mutual agreement before a dispute arises.
When to seek legal advice?
On some occasions, however, when a dispute does arise, the property valuation report will become part of the legal process. A Chartered Surveyor can be instructed to provide further reporting for legal teams to pursue or defend a dispute case. As part of this process, you can expect a surveyor to not only provide a property valuation report, but also independent expert determinations and detailed discussion. This will play a part in alternative dispute resolution or mediation. When it comes to legal proceedings, only the report of a RICS registered surveyor can be used.
Who should undertake the property valuation report?
When a property valuation dispute does go to court, a RICS registered surveyor can be called as an expert witness. If you are in this situation, it can help your case to seek a firm who has extensive experience and knowledge in all aspects of the commercial property field. Since there are protocols and the requirements of the court, civil procedure rules and RICS practice directions to follow. So ensuring your process began with a RICS registered report can help in the continuity of information here, and even prevent court disputes altogether.
The nature of a dispute is that it is something that gathers speed due to lack of information and communication between parties. At Curchod & Co we have the expertise to offer impartial accredited property valuation reports. The high standard of our reporting can often help to prevent disputes arising in the first place. And as we all know, prevention is always better than cure!