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Valuations are carried out as defined under one or more of the following
headings in accordance with the Practice Statements in the RICS Appraisal &
Valuation Manual:-
(A)
Market Value
is the estimated 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.
(B)
Market Rent
is the estimated amount for which a property, or space within a property,
should lease (let) on the date of valuation between a willing lessor and a
willing lessee on appropriate lease terms in an arm’s-length transaction after
proper marketing wherein the parties had each acted knowledgeably, prudently and
without compulsion.
(C)
Projected
Market Value is the estimated amount for which a property is expected
to exchange at a date, after the date of valuation and specified by the valuer,
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.
(D)
Projected
Market Value for repossession proceedings is the estimated amount for
which a property is expected to exchange at a date, after the date of valuation
and specified by the valuer, 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. This base assumes that
during the marketing period the property has been unoccupied and that all
furnishings and fittings have been removed. It is further assumed that the
vendor (the mortgagee) has to sell the property within a reasonable period to
recover the secured debt.
(E) Existing Use
Value is the estimated 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, assuming the buyer is
granted vacant possession of all parts of the property required by the business
and disregarding potential alternative uses and any other characteristics of the
property that would cause its Market value to differ from that needed to replace
the remaining service potential at least cost.
(F)
Re-instatement Cost is our opinion of the likely cost of re-instating
all buildings, normally for insurance purposes, on the basis that:
(i) the
accommodation provided will be similar in construction, design and area to the
existing buildings;
(ii)
the works will be in compliance with conditions imposed by Local Authorities in
connection with the construction of the building;
(iii) unless
reported separately, allowances are made to cover the cost of necessary
demolition and site clearance prior to re-building, external works such as hard
standings, private roadways and fences and professional fees which would
normally be incurred.
Unless otherwise stated, the re-instatement cost
does not include any allowance for:
(i)
any loss of rent incurred during
re-building;
(ii)
planning restrictions which a
planning authority might impose;
(iii)
special foundations required for
plant and machinery or due to adverse ground conditions;
(iv)
any plant, machinery, equipment,
tanks, loose tools, office furniture and equipment;
(v)
any effect of inflation on building
costs occurring after the date of the valuation;
(vi)
VAT which will be payable in certain
circumstances, both on building works and professional fees – you are advised to
discuss this matter with your Insurance Broker.
Note: A re-instatement cost is not a
valuation.
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