RICS gives guidance on valuations in 'uncertain times'

The Royal Institute of Chartered Surveyors (RICS) has issued new guidance to valuers conducting valuations in the current highly volatile market environment. Noting that demand for commercial property is falling at the fastest pace in a decade, the organisation cautioned valuers about adding caveats to their reports.

'It is recognised that the valuation process is extremely difficult when there is a greatly reduced volume of reliable sales evidence. Despite these difficulties it is not appropriate for reports to feature caveats or qualifications which would cause the client or auditor to question the validity of the valuation, or to qualify a valuation report,' RICS International Valuation Faculty Board told its members.

The advice from RICS clarified the use by valuers of Guidance Note 5 in the RICS Red Book. Guidance Note 5 deals with periods of valuation uncertainty. It was introduced in the aftermath of the September 11 attacks in the US.

Mark Gerold, chair of the RICS International Valuation Faculty Board commented: 'In conditions of uncertainty, such as exist at present, it is absolutely correct for valuers to refer to GN5 in their report - it is for these situations that the guidelines were originally introduced.'

RICS covers all aspects of property, construction and associated issues. The institute has 86,000 charted members and 55,000 members in other categories in 146 countries.