RICS residential mortgage valuation specification

1 rics residential mortgage valuationspecificationSeptember 2008 editionThe text of this leaflet is from theRICS valuation StandardsSeptember 2008, UK appendix note: References to the masculine include, where appropriate, the by the Royal Institution of Chartered Surveyors ( rics )Surveyor CourtWestwood Business ParkCoventry CV4 responsibility for loss or damage caused to any person acting or refraining from action as a result of the materialincluded in this publication can be accepted by the authors or published May 1990 May 2003 version first appeared in RICSA ppraisal and valuation Standards, November 2003 Revised 2006 Revised April 2008 Royal Institution of Chartered Surveyors ( rics ) September 2008.

2 Copyright in all or part of this publication restswith rics , and save by prior consent of rics , no part or parts shall be reproduced by any means electronic,mechanical, photocopying or otherwise, now known or to be in Great Britain by Columns Design Ltd, Reading, BerksRICS residential mortgage specification , which has been jointly prepared by rics and the Council ofMortgage Lenders, will apply to the valuation of residential property formortgage purposes on behalf of building societies, banks and other lenders,unless varied by the lender s standard terms of engagement and standardreport specification is arranged under the following headings:+the valuer s role+the terms of engagement+the valuer s inspection+the valuation +the report+re-inspections+further advances+buytolet+external appraisals2 The valuer s Financial Services Authority s (FSA) guidance to building societies statesthat valuers should have sufficient experience and expertise and should be freefrom conflicts of interest.

3 Role of the valuer, who must have knowledge of and experience in thevaluation of the residential property in the particular locality, is:+to advise the lender of the Market Value, usually excluding developmentvalue at the date of inspection;+to advise the lender as to the nature of the property and any factors likely toaffect its value; and+if required by the lender, to provide an assessment of the property sestimated current reinstatement cost in its present form (unless otherwisestated) for insurance the valuer s job is limited to assessing the adequacy of the security, valuersmust neither accept instructions to make, nor volunteer recommendations, asto the length of the term, or the amount to be advanced, nor give advice as towhether the property is suitable for second mortgage purposes.

4 Thesedecisions are solely the responsibility of the residential mortgage valuation specification |13 Terms of societies and banks will usually have standard terms of engagementwhich will incorporate this specification , and make reference to the practicestatements in these there have been no written, or previously-established instructions thevaluer should confirm that the intention is to provide a service in accordancewith this specification . A copy of thisspecification may be supplied to variation to the specification should be agreed in writing before theinspection is valuer s order to fulfil the instructions the valuer must inspect the property to valuer must undertake a visual inspection of as much of the exterior andinterior of the property as is accessible without undue difficulty.

5 Although thevaluer must use personal judgement, this inspection should include all of theproperty that is visible when standing at ground level within the boundaries ofthe site, and adjacent public/communal areas, and when standing at thevarious floor inspection should deal with any of the following matters that are relevantto the subject Main buildingExternal+Roof coverings, chimneys, parapets,gutters, walls, windows, doors, pipes,wood, metalwork, plastics and composites, paintwork, damp proof courses,air bricks and ground +Any parts that are not readily accessible or visible are not inspected andfurniture and effects are not moved or floor coverings lifted.

6 +Subject to reasonable accessibility, roof spaces are inspected only to theextent that they are visible from the access hatches, without entering them.+Ceilings, walls, load bearers and floor surfaces are inspected, except wherecovered or obscured. Moisture meter readings should be taken to identifypotential damp problems.+Cellars are inspected if they are reasonably accessible, but under-floor voidsare not ServicesThe valuer identifies whether or not there are gas, electricity, central heating,plumbing and drainage services. These services are not | rics residential mortgage valuation Outbuildings+Garages and other buildings of substantial permanent construction, andany structure(s) attached to the dwelling, are inspected.

7 +The valuer is not expected to comment on the size, condition or efficiencyof any leisure installation in the grounds of the property. However,comment may be expected where:+there is obvious evidence of serious disrepair;+the siting of the installation (for example, of a swimming pool) is apotential hazard to the dwelling, or poses a threat in other terms;+the installation covers an unacceptably large area in relation to the confinesimposed by site SiteThe inspection includes the general state of boundaries, structures, drives,paths, retaining walls and the proximity of trees only if they are likely tomaterially affect the property s Neighbouring propertiesThe nature, use and apparent state of repair of neighbouring properties in theimmediate vicinity are considered only to the extent that they may materiallyaffect the value of the subject Hazardous materials.

8 Contamination and environmental matters+No enquiries regarding contamination or other environmental hazards aremade but, if a problem is suspected, the valuer should recommend furtherinvestigation.+The valuer may assume that no deleterious or hazardous materials havebeen used in the construction and is under no obligation to verify such anassumption. However, if the limited inspection indicates that there are suchmaterials, this must be reported and further instructions requested.+The valuer will not carry out an asbestos inspection, and will not be actingas an asbestos inspector in completing a mortgage valuation inspection ofproperties that may fall within theControl of Asbestos Regulations2006 (SI2005 No.)

9 2739).+Where the valuer becomes aware of: the close proximity of a high voltage electricity supply; the possibility of the presence of Radon gas; the use of Mundic in concrete building materials in Cornwall andparts of Devon; the presence of old mine workings,reference should be made to the guidance in UKGN 1.+Certain problems, such as mining settlement, subsidence, woodworm particularly prevalent in certain districts. If appropriate, the valuershould make some reference to these defects, even if the subject propertydoes not appear to be affected atthe time of the inspection. Whereappropriate, the valuer should advise that a mining report should residential mortgage valuation specification | , maisonettes or similar units forming part of a larger building or groupof related above provisions apply, but here main building means the buildingcontaining the proposed security, but not including other main buildingsphysically attached to Main buildingExternal+The valuer inspects the exterior of the proposed security, and enough ofthe remainder of the main building to ascertain its general state of +The interior of the proposed security is inspected.

10 As well as the communalentrance areas within the main building from which the proposed securitytakes access, and the communal area on the floor(s) of the proposedsecurity.+The roof space is only inspected (as defined in para. ) where access isdirectly available from within the proposed ServicesIn the case of flats, where services such as lifts, boilers and other plant areshared, the valuer may assume that the right to use these, and have themmaintained, passes with the property, subject to an appropriate and reasonableservice OutbuildingsThe valuer also inspects garaging, car parking, other buildings (excludingsports complexes) of permanent construction and any other structuresattached to the main building, or which serve either the main building or theproposed Management and maintenance+The valuer is expected to identify, in the course of the inspection, anyapparent deficiencies in the management and maintenance arrangementsthat materially affect the value.