The RICS plans to launch a review of valuation practices in the “coming weeks”, with the aim of ensuring surveyors remain “relevant and trusted” in the eyes of the public.
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The consultation, which will be published in the upcoming RICS 2020 Futures Report, will focus on valuation for financial reporting, and will cover the “changing public expectations over the independence of professionals, especially statutory auditors”, as well as environmental sustainability and the increasing use of AI in valuation.
RICS global chief executive Sean Tompkins said: “Fundamentally, this is about retaining this profession’s status as one of high-quality and trusted custodians of the built and natural environment.
“Throughout 2020, we will particularly be focussing on reviewing our ethical standards (or code of practice), educational requirements, and valuation standards (commonly known as the Red Book).” He did not outline any policies that would be included in the consultation.
According to The Times, the consultation will aim to minimise conflicts of interest by proposing a more frequent rotation of valuers, ensuring owners do not retain the same valuers for extended periods. The RICS is also considering requirements for valuers to report to non-executive audit committees, rather than company directors, the paper reports.
The news follows the publication of the RICS’ first-ever mandatory requirements relating to lease negotiations. The new requirements, called ‘code for leasing business premises’, do not detail how to reach the outcome of a lease negotiation, but do set out how to make negotiations “fair and balanced”. The requirements state that negotiations must be approached in a “constructive and collaborative manner” and that any commercial tenants not represented by an RCIS member or other property professional must be recommended to obtain professional advice.
The requirements, available here, also state that terms of the lease on a vacant possession letting must be recorded in written heads of terms, stating that it is “subject to contract”, and summarise the identity of the premises, the length of term, any options for renewal or break rights, the amount of rent, and frequency of payment, among other details. The requirements cover new leases, lease renewals and extensions.
The professional statement falls in line with existing industry code, and are supported by Law Society, BPF, Retail Evolution, the British Council for Offices and the Federation of Small Business.