Professional Regulation

1. Professional Regulation • The Red Book: - Valuer does is governed by framework provided by RICS’s Red Book. - The Red Book is the RICS Valuation Standard – Global and UK. - The Red Book does not tell valuers how to value in each and every case. Valuers are left to judge which techniques should best be employed in the particular circumstance encountered. - Red Book does set professional and ethical standards which need to be met and it provides core definition so as to achieve consistency and avoid misunderstanding.

2. continued - Specific Valuation Standards which within the Red Book specify such things as the min. requirements which need to be met when reporting a valuation. - There are also Specified Guidance Notes in the Red Book which deal with particular aspects of valuation. - Many of the principles and definitions regarding property valuation in the Red Book have globally applicability. For example, Singapore Institute of Surveyors and Valuers (SISV)’s Valuation Standards and Practice Guidelines.

3. continued - Four Bases of valuation as defined by Red Book as: * Capital Value – where property is to be sold or where the value needs to be recorded for account purpose or to provide confirmation of the value of collateral for lending purposes. * Rental Value – Where the property is to be leased or because the rental value provides the basis for calculating the business rate payable on the property. * Investment Value – Where a specific client wishes to know if a particular property will meet specific investment expectation. * Value of an Interest – In property in which two parties already have a commitment which effectively excludes the open market but where a further transaction is envisaged which could release marriage or synergistic value which is to be shared between the parties

4. Market Value • Is the first and most commonly referred to basis of value defined in the Red Book. • The estimate amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably , prudently and without compulsion. • Valuers are excepted to adopt and work with this concept. • Enables the valuer to be clear-minded so that focus can be brought to bear on the subject property in order to identify its market value.

5. Market Rent • The estimated amount for which a property , or space within a property , should lease (let) on the date of the valuation between a willing lessor and a willing lessee on appropriate lease term in an arm’s- length transaction after proper marketing wherein the parties and acted knowledgeably , prudently and without compulsion. • The appropriate lease term should be stated whenever market rent is provided. • Valuers should adopt this definition when carrying out rental valuation.

6. Worth or Investment • The value of property to a particular owner, investor , or class of investor for identified investment or operational objectives. • It is very similar to market value • A valuation for market value is taking it key reference points from what the market in general expects and which can be deduced from comparable data. In contrast, a valuation for worth develops from a specific investor’s capacities and expectation.

7. Fair Value • The amount for which an asset could be exchanged , between knowledgeable, willing parties , in an arm’s – length transaction. • Can be applied to marriage or synergistic value.

8. Qualification and Registration of Valuers • Valuers must be appropriately qualified and accept responsibility for the valuation. • A person must possess the following: - Academic /professional qualification - Membership of a professional body - Practical experience - Compliance with any state legal regulation governing the right to practice