RICS 'bible' tightens system of valuation

A DRAFT version of a new surveyors' 'bible' has been published in response to a report calling for a radical reform of the property valuation industry, writes Tom Stevenson.

The publication by the Royal Institution of Chartered Surveyors brings together the guidance notes contained in the Red and White books. It comes in response to the Mallinson Report on valuation, published in April, which warned that urgent steps were needed if the profession was to maintain its reputation.

The Mallinson Report itself followed the Queens Moat affair last year when leading surveying firms were criticised for their wildly differing valuations of the hotel company's portfolio. The report attacked the industry for its refusal to be more candid about the uncertainties inherent in valuing properties, especially trading properties such as hotels, whose value depended on future business.

Roy Swanston, president of the RICS, said the new book would extend the scope of mandatory requirements for valuations of all types of property.

George Grover, chairman of the institution's Appraisal and Valuation Standards Board, said the draft was not a complete response to Mallinson.

He said some of the areas discussed in the Mallinson Report could only be changed in partnership with the Accounting Standards Board which is reviewing the role of valuations in financial statements.

The new book stresses the need for surveyors and clients to settle instructions in writing so that both parties understand the client's requirements. According to the insurance industry, almost half professional indemnity insurance claims would disappear if this were done for every valuation.