Members carrying out Valuation work should be aware of the advice reproduced below. We are grateful to Fraser Miller Ltd for drawing attention to this issue.
IMPORTANT NOTICE – PROFESSIONAL INDEMNITY VALUATION RESTRICTION
The RICS has advised that Valuers should value on the basis of “Material Valuation Uncertainty” during the Covid-19 crisis as per the notice below.
Insurers require that all Valuations are now issued on this basis. We have been made aware that some Panel Managers have questioned the need for this and you may encounter resistance from some Lenders to this.
For the avoidance of doubt, ALL Valuations must contain the wording below otherwise you may be unable to obtain Professional Indemnity Insurance at future renewals.
If the RICS Regulated Member has concluded there is material uncertainty, it is suggested that the following form of words can be used:
The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a “Global Pandemic” on 11 March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries.
Market activity is being impacted in many sectors. As at the valuation date, we** consider that we can attach less weight to previous market evidence for comparison purposes, to inform opinions of value. Indeed, the current response to COVID-19 means that we are faced with an unprecedented set of circumstances on which to base a judgement.
Our valuation(s) is / are therefore reported on the basis of ‘material valuation uncertainty’ as per VPS 3 and VPGA 10 of the RICS Red Book Global. Consequently, less certainty – and a higher degree of caution – should be attached to our valuation than would normally be the case. Given the unknown future impact that COVID-19 might have on the real estate market, we recommend that you keep the valuation of [this property] under frequent review.