Who can inspect property under Red Book?

When I first trained to be a chartered surveyor at Hampshire County Council, I was lucky to have a team of qualified RICS members to watch over me and successfully guide me through my test of professional competence – which preceded the APC and was broadly similar in process but with no automatic assessment interview – in just two years.

While I was allocated to one team, as a graduate I reported to the county estates officer, who was very keen to impart his knowledge and skills to all graduates in the department.

That is where I was taught to measure and inspect properties. Inspections were core to all the work that we did, and I spent hours in the company of qualified staff looking at, assessing and scrutinising council-owned property and land, whether for management, valuation or strategic purposes.

The county estates officer was adamant that we should always inspect properties, for the obvious reason that we then knew intimately what we were valuing.

Accordingly, we would resort to desk valuation, for example, only when extreme circumstances dictated and/or where a recent inspection had already been undertaken.

Indeed, the county estates officer was less than pleased when one member of his team, charged with valuing all residential properties ancillary to our education portfolio, returned a normal valuation for a caretaker's house that had burned down a month before.

He had quite wrongly decided that inspection of the properties wasn't essential. 

However, that aberration apart, my time with the council was a wonderful education in the importance of diligent, skilled and rigorous inspections as an essential part of the role of a real estate professional.

That basic principle has not fundamentally changed during my long career as a chartered surveyor.

There are numerous mentions in Red Book Global Standards of real estate property inspections and, indeed, of inspections of other chattels.

They are the bedrock on which valuations are built. Of course, there are exceptions and there are legitimate times when a valuation can be undertaken without an inspection.

These situations, however, should represent a tiny minority of instructions and be agreed with the client and referenced in the report and the terms of engagement.

The default setting is, as set out in VPS 4 of Red Book Global Standards, that all valuations are carried out with physical inspections.

Paragraph 1 of VPS 4 reads: 'Inspections and investigations must always be carried out to the extent necessary to produce a valuation that is professionally adequate for its purpose. The valuer must take reasonable steps to verify the information relied on in the preparation of the valuation and, if not already agreed, clarify with the client any necessary assumptions that will be relied on.'

This seemed an odd question, as I had always assumed that this was the case. From my own experience, I aided qualified valuers when I was training, but I never undertook inspections for valuation by myself.

Looking at VPS 4 above, I would argue that in order to be professionally adequate, a valuation must be carried out by a qualified valuer (see PS 2, section 2).

This may not necessarily be the person signing off the report (the responsible valuer), as they may have delegated this work to another qualified valuer (see PS 2, section 2, paragraph 5).

I think that the bigger the firm and the valuation team, the greater likelihood of the responsible valuer not being the person who inspected the property.

As mentioned previously, this would certainly not be in order to delegate to an unqualified valuer such as a recent graduate.

So, while not explicitly stated, I would strongly argue that, looking at VPS 4 in the round, the above interpretation is a Red Book Global Standards requirement.

Part of the purpose of having a named responsible valuer is to have a reference point for the valuation, particularly where a team has been engaged in producing the valuation.

If there are concerns over the valuation, the responsible valuer must be able to explain how the valuation was compiled and, as the title suggests, take responsibility for the valuation.

As usual, we need to consider the what-if scenario, i.e. what if a client was to sue a valuer for professional negligence?

While the valuation itself may be able to be defended, the fact that the property inspection was undertaken by a non-qualified RICS member would no doubt weaken the valuation's overall defence.

Equally, the valuer may be exposed, as the wording of their professional indemnity insurance policy may render the insurance null and void.

However, this prescription might prevent an RICS member operating outside the UK from working with a team of non-RICS-qualified valuers in compiling a Red Book-compliant valuation for a client.

RICS has rightly recognised that there is an abundance of appropriately qualified valuers from different countries and jurisdictions who can legitimately undertake inspections.

Thus, there is, to my mind, a clear principle that inspections of any property anywhere in the world for valuation purposes must always be undertaken by a suitably qualified valuer.

The author would like to thank his colleague, Keith Petrie, for his invaluable oversights when writing this article.