Commercial Valuations: How to Keep Yourself and Your Firm Out of Trouble
Practice, Methodology, Regulatory Requirements
When did you last review your practices to make sure that you are keeping the risks you take to a minimum? Surveying firms can, and should, do a lot more to manage the risks when undertaking valuation work, to minimise real, potential and unjust PII claims. This seminar, will examine the steps that you need to make in order to stay within the rules and also examine practical measures you can take to help minimise the financial and reputation risk that is attached to valuation work.
|16 July 2019||Leonardo Royal Hotel London - St Paul’s, London||£260||Event Full|
Note: All prices are subject to VAT at the prevailing rate
Being a Valuer and having a valuation function in your business
carries risks and responsibilities. The insurance industry sees valuation
work as high risk and PI insurance only partly reflects this. The risk of
being sued is a tangible treat and it is all too easy for clients to make
claims on a whole host of fronts. And then there is the threat from failing RICS
Issues to be covered include:
- What can we learn from case law?
- What can the insurance industry flag up as areas of risk?
- In practice, making use of comparables, AVM and the impact of GDPR?
- What happens when the RICS Compliance team come knocking?
- What are the mistakes of others we can learn to avoid?
- Why do variations vary between accountants and valuers? Is anyone wrong?
- Managing and avoiding conflicts of interests
- How do you value and manage uncertainty? Can you caveat your way out of liability?
- Countering bribery, corruption and money laundering – avoiding breaches of HMRC and RICS rules
- Chris Thorne FRICS, Director, Valuology, Past Chairman IVSC Standards Board
- Greg Harrison, Senior Account Executive, Howden Group
- Roger Messenger, Partner, Wilks Head & Eve
- Graham Stockey, Principal Surveyor RICS Regulation, RICS
- Tony Chase FRICS, Partner, Head of Compensation, Gerald Eve LLP
- Tom Aslin, Partner, Kingston Smith LLP
- Vicky Moss, Head of Financial Security & Deputy Head of Compliance, BNP Paribas Real Estate
Welcome and Introduction by Event Chairman
- Why are Valuer’s here?
- Is history repeating itself? Are Valuer’s destined to be the fall guys once more?
- Lets look at cases, liability and risk
Is There a Problem With Valuations? A Review of Landmark and Recent Negligence Cases: What are the Trends and Principles in Court Decisions
- Tiuta International Limited (in liquidation) v De Villiers Surveyors Limited  UKSC 77
- BPE Solicitors and another (Respondents) v Hughes-Holland  UKSC 21
- Bank of Ireland & Anor v Watts Group Plc  EWHC 1667 (TCC)
- Thomas v Hugh James Ford Simey Solicitors  EWCA Civ 1303
- Burgess & Anor v Lejonvarn  EWHC 40 (TCC)
- Dunfermline Building Society (in special administration) v CBRE Ltd  EWHC 2745 (Ch)
- Property/valuation type
- Court’s approach to the valuation process
- Purchase price evidence
- Sensitivity analysis
- Other significant cases in the last 12 months
- Manchester BS v Grant Thornton case reaffirmed SAAMCO
- Rehman & Rehman v Santander and BNP Paribas which confirmed that in commercial loans the lenders Valuer does not owe the borrower a duty of care by default.
- How the insurance industry quantifies risk
- The expectations of brokers and insurers on valuers
- Are there limitations or caps to the quantum of liabilities, and when do they apply?
- Can valuations be relied upon by third parties? What are the rules?
- The good, the bad and the ugly contract terms
- PII and the assessment of current market and the risks arising from the market
- Post Brexit, will things get easier?
- RICS Guidance and regulations: what must you do?
- Quality Assurance procedures and systems for employers and employees
- The need for effective communication
- The need for documentation
- PII cover, premiums and the restrictions on a firm’s valuation casework.
The Valuer’s Toolkit
- The use of comparables
- The impact of GDPR
- AVM - beyond the PR. Do they work, what are their limitations, are they of use to valuers?
Monitoring under RICS Valuer Registration Scheme
- The operation of scheme
- What happens if the inspector calls to visit?
- What happens at an inspection?
- What are common problems discovered at inspection and what are the consequences?
- Overview of first 5 years and lessons for the future
for Accounting – What Surveyors Need to Know
RICS valuers are often required to produce valuations to assist clients or their accountant prepare their accounts. This session explores the different definitions and assumptions that may be required when producing such valuations:
- The basis of Red Book and Accounting Standards on valuations
- Should you value everything or just bricks and mortar?
- Impact on lease arrangements
- Dealing with franchised property
- What impact from turnover?
- Dealing with brands
- Chattels and fixtures
- Plant and machinery
- Making appropriate assumptions
- Goodwill and the going concern assumption
- Enterprise value and equity value
- Earnings multiple basis
- Discounted cash flow basis
- Adjustments for debt and surplus assets
- The impact of different values in a judicial environment
- Are there variations in the bottom line? What’s the impact when they do?
Conflicts of Interest in Valuation
- RICS Professional Statement
- Party Conflicts, own Interest conflicts, other Involvement conflicts, Implied conflicts
- Disclosure and confidentiality
- What does Red Book say?
- Examination of scenarios and audience responses
- Consequences from the courts and from RICS
- A caveat “this valuation may be subject to material uncertainty …” can have a profound impact on the client, does it devalue the report?
- What does the Red Book and IVSC say about reporting uncertainty?
- The pathology of uncertainty. It has always existed, but why are expressions of it now common place in reports. Is this acceptable? Why has this happened?
- What is uncertainty? What are uncertainty events?
- When is it appropriate to disclose uncertainty?
- The consequences that can flow from inappropriate declarations of uncertainty
- Decoupling market and valuation risk.
Countering Bribery and Corruption, Money Laundering and Terrorist Financing, the Threat to Valuers and Their Firms
- The 5th Money Laundering Directive implemented in 2019
- Whose captured by it?
- What are the compliance issues?
- The need to register
- Risk assessments for businesses
- What are the consequences of not adhering?
- HMRC fixed administration fees plus fines
- RICS sanctions for members and firms caught by HMRC