Terms & Conditions | Residential Valuation

Terms & Conditions of Engagement For The Valuation of Residential Property
Applicable to a Private Client

The Client’s attention is drawn particularly to the provisions of Clause 4.

1. Definitions:

a) The Client (or Customer)

The person/s to whom the Valuation Report is to be addressed.

b) The Firm

The Valuation Firm which is contractually responsible for the provision of the Valuation

Report, is:

Hortons Valuers Ltd

Registered Office and Administration Centre address:

46 Hullbridge Road, South Woodham Ferrers, Chelmsford, Essex, England, CM3 5NG

(Telephone: 020 3058 3200,

Email: info@hortonsvaluers.co.uk

Company No: 11169469

 c) RICS

 The Royal Institution of Chartered Surveyors

 d) RICS Red Book (Current Edition)

 This publication sets out the professional standards as codified by the RICS under which

each Valuation or similar service and the Valuation Report are required to be

undertaken. The Firm will conform to the latest version of these professional standards

and unless stated otherwise, will also conform to the requirements of the Residential

Mortgage Valuation Specification contained therein, where relevant.

e) The Valuer

The Valuer selected by the Firm will be an appropriately qualified RICS member and

registered under the RICS Valuer Registration Scheme. The Valuer will be an employee of

the Firm or an owner of the firm or an employee or associate of an owner. The Valuer will

have the skill, experience and local knowledge necessary to undertake the instruction, and

will be adequately equipped to inspect the property and to produce and sign the Report.

f) Residential Property

A self-contained domestic dwelling as defined by The Town and Country Planning (Use

Classes) Order 1987 (as amended) as Class C3, which may also include small HMOs within

Class C4.

g) The Valuation Report

Pursuant to the Client’s instructions, the report that is prepared by the Valuer on the

Property as part of the Valuation Service, in which the Valuer will have regard to the

apparent state of repair and condition of the Property but will be under no duty to carry out

a structural survey of the Property nor to inspect woodwork or other parts of the structure

which are covered, unexposed or inaccessible and will not undertake the testing of

electrical, heating or other services. Furthermore the Valuer will be entitled to assume that

an inspection of such areas would not reveal defects of sufficient magnitude to require

him/her to make a material adjustment to the Valuation.

The format of the Valuation Report will follow a template that complies with VPS 3 of the

current edition of the RICS Red Book.

The Valuation Report will be made available to the Client in either hard copy or electronic

format, depending on the Client’s instructions.

h) Valuation

The valuation of the Property to be undertaken by the Valuer in accordance with the

provisions at clause 2(d) of these Terms and Conditions and forming part of the Valuation

Service.

i) Valuation Date

The date upon which the valuation applies which shall be the date of Inspection of the

Property unless otherwise stated in the Report.

j) Market Value (MV) (as prescribed by the RICS):

‘The estimated amount for which an asset or liability should exchange on the valuation date

between a willing buyer and a willing seller in an arm’s length transaction, after proper

marketing and where the parties had each acted knowledgeably, prudently and without

compulsion.’

k) Market Rent (MR) if required (as prescribed by the RICS):

‘The estimated amount for which an interest in real property should be leased on the

valuation date between a willing lessor and a willing lessee on appropriate lease terms in an

arm's length transaction, after proper marketing and where the parties had each acted

knowledgeably, prudently and without compulsion.’

This is based on the assumption that the property is let on a six month assured shorthold

tenancy.

l) Valuation Approach and Reasoning (as prescribed by the RICS):

The market approach (as defined below) will be used.

‘The market approach provides an indication of value by comparing the subject asset (the

Property) with identical or similar assets for which price information is available.’

This method compares similar property which has changed hands in the open market and

makes appropriate adjustment to enable accurate comparison.

However in the event that the Property is for investment purposes, the Valuer may also

consider an income approach which takes account of the potential income stream on such

property as Houses in Multiple Occupation (depending on the local market).

m) Property

Means the subject property.

n) Data Protection Legislation

Means all applicable law relating to the processing, privacy and use of personal data

including Regulation (EU) 2016/679 (the "General Data Protection Regulation" or the

"GDPR") and Data Protection Act 2018 (or, in the event that the UK leaves the European

Union, all legislation enacted in the UK in respect of the protection of personal data) and the

Privacy and Electronic Communications (EC Directive) Regulations 2003.

The terms “controller”, "personal data”, “process” and “processing” shall have the meanings

set out in the Data Protection Legislation.

o) Valuation Service

Means the Valuation and the Valuation Report to be completed by the Valuer on the

instructions of the Client and in accordance with these Terms and Conditions.

p) Desktop Valuation

A desktop valuation (also known as desktop appraisal) is a valuation performed without a physical inspection of a property. It will generally be undertaken where a full inspection of a property cannot take place or by instruction of the client. A Desktop Valuation is still RICS Red Book compliant. Desktop Valuations incur restrictions and valuer reserves the right to assess each asset on a case by case basis prior to accepting an instruction considering the complexity of each property valuation.  The information that we would require prior to undertaking a Desktop Valuation includes, but is not limited to, floor plans, previous reports and measurements, photographic records, video footage, marketing particulars, and any planning records.

q) Inspection

Means the physical inspection of the Property by the Valuer to be undertaken as part of the

Valuation Service that will form the basis of the Valuation and the Valuation Report.

Where this term is used it must be assumed that the valuer has not carried out a Desktop Valuation.

 r) Contract

Means these Terms and Conditions and the Client’s instructions.

s) Currency

Monetary amounts shall be reported in Pounds Sterling (GBP/£) unless otherwise agreed in

writing.

t) ‘In writing’

With regard to terms being agreed in writing, this shall include exchanges of letters and

memoranda, electronically traceable and recordable data, such as faxes and e-mails, but it

shall exclude text messages on mobile phones.

2. Purpose of the Report

a) The purpose for which the Valuation Service is required shall be to provide an opinion of

the value of the Freehold/Leasehold interest in the Property, as specified by the Client and

the Firm in respect of the subject property, the address of which is stated above.

 b) The Firm shall provide to the Client a report setting out the Valuer’s opinion of the value of

the relevant interest in the property. The Valuer responsible for the valuation will be

named on the report. Our valuation is provided for your benefit alone and solely for the

purpose of the instruction to which it relates. The valuation may not, without the Firm’s

written consent, be used or relied upon by any third party, even if that third party pays all

or part of the Firm’s fees, or is permitted to see a copy of our valuation report. If the Firm

provides written consent to a third party relying on the valuation, any such third party is

deemed to have accepted the terms of our engagement. Neither the whole nor any part of

the report or any reference to it may be included in any published document, circular or

statement nor published in any way without the Firm’s written approval of the form and

context in which it may appear.

c) It is confirmed that the Valuer shall, to the reasonable knowledge of the Firm, have no

known interest in the Property or any other conflict that will prevent the Valuation Service

from being undertaken in an objective and unbiased way. If the Valuer has had a previous

involvement with the property or the other parties to this transaction which impacts upon

the Valuation Service, this will be disclosed to the Client before the Valuation Service is

commenced. The Valuer chosen to undertake this work has reasonable knowledge of this

area and the appropriate expertise for the Valuation Service required. If the Client has

provided additional information or advised the Valuer to contact a third party for further

information, it is implicit that the Firm may safely rely on that information.

d) Unless otherwise specifically agreed in writing, the value advised by the Valuer shall be in

accordance with one or more of the following Valuation bases, as defined above:

Market Value (MV)

Market Rent (MR)

e) If the Client requests an Insurance Value it will be on the following basis:

The reinstatement cost figure for the permanent buildings is provided for insurance

purposes and is not directly related to the market value of the property. Unless the Valuer

has access to particular cost information relating to the property or the locality, the

reinstatement cost will be calculated by reference to the indices and guidance published by

the Building Costs Information Service (BCIS). The figure stated will only include Value

Added Tax on professional fees (not on building costs) and will not take into account other

potential or consequential losses such as costs of alternative accommodation.

The reinstatement cost figure should be revised annually or when any significant

alterations or extensions are undertaken.

Where the Property is a flat, the figure which will be given will be for the subject property

only and it will be assumed that the Client's legal adviser will confirm what appropriate

alternative arrangements will require to be made.

NB: an explanation of the definitions is available if requested.

3. Inspection and Reporting Assumptions and Limitations

a) When undertaking the Valuation Service, we shall make reasonable assumptions, for

example, we shall assume the purchaser is buying the freehold interest (or leasehold if

buying a flat). If leasehold, our valuation will be based upon an unexpired lease term of at

least 85 years and on an assumption that the ground rent is nominal and non-reviewable.

We will also assume that there are no event charges within the lease for such items as

extensions to the property. If these assumptions are incorrect then please discuss this with

the Valuer at the time of instruction.

b) The Valuer shall, unless otherwise expressly agreed, rely upon information provided to

him/her by the Client or the Client’s legal or other professional advisers relating to tenure,

tenancies and other relevant matters (together ‘Client Information’). It is specifically

acknowledged that the Firm may safely rely on the Client Information. It is the

responsibility of the Client to ensure this information is accurate and to promptly advise the

Valuer if it is not.

c) It is stressed that the Client has requested the Firm to provide a Valuation Report only. The

Valuation Report must not be confused with the more thorough Homebuyer Report or a

Building Survey.

d) In the course of the Valuation Report, the Valuer will draw attention to communal aspects of

flats and will comment upon shared driveways etc where these are relevant to the Property,

but only to the extent where these may have an effect upon the Valuation.

e) External Panels

 Composite external panels which sandwich insulating material (including

polyurethane/polystyrene types of material) between inner and outer plasticcoated/painted aluminium/steel sheeting (frequently referred to as ACM panels –

aluminium composite material panels) have been extensively used in recent years in both

the refurbishment of existing buildings and in the construction of new buildings.

 Some panel cladding systems have been shown to increase fire and health risks due to the

combustibility of the panels, the cyanide and other toxins which are carried in the thick

black smoke when the panels burn, and by aiding the spread of fire due to the chimney

effect caused by the gap between the panels and the main structure. These hazards also

make fire-fighting more dangerous, increasing risk to life and damage to buildings.

Consequently, insurance companies may decline to insure unless modifications are made

and/or increase insurance premiums, all of which could impact on the value of the building.

 Unfortunately, the type of insulant and fire checking of the panel system cannot be

identified from a visual inspection. Thus where the existence of such panels has been

reported, it is strongly recommended that purchasers and lenders should make further

enquiries to satisfy themselves as to the type and suitability of the panel system as this is

outside the scope of this Valuation. For buildings of more than three storeys it is essential

that the Fire Safety Certificate, from an assessor registered with a Fire Risk Assessment

Competency Council approved body, includes confirmation of the satisfactory nature of the

panel system, as installed.

f) Asbestos and other hazardous materials: The construction of property, especially

during the 20th Century and particularly the finishes used, may have contained hazardous

materials; these are impossible to detect without specific tests and these are beyond the

scope of the Valuation Service. There is a strong possibility that property built or

modernised during this period may contain asbestos in one or more of its components or

fittings. The use of asbestos has been extremely diverse, from acting as an insulant in

boilers to being added to decorative finishes to improve the binding. It is frequently

unexposed and as it was used as an additive to products such as cement-based guttering

and insulation and roofing sheeting, its presence can only be confirmed by testing. It is

beyond the scope of the Valuation Service to test for asbestos. Should there be any

particular concerns about these matters a specialist should be engaged to undertake

appropriate tests. Asbestos becomes a particular health hazard when its fibres are released

into the air. Therefore it should not be disturbed, sanded ready for decorating, drilled, cut

etc and should only be removed by experts.

g) Boundaries, grounds and outbuildings relating to normal domestic gardens:

i. The Inspection will take into account such boundaries, grounds and permanent

outbuildings, but will not include constructions or equipment with a specific leisure

purpose including, without limit, swimming pools or tennis courts.

ii. The Inspection will include the immediate gardens that belong to the property, but

the Inspection specifically excludes any additional land (such as pasture or amenity

land). The Client is recommended to seek separate advice in respect of this

additional land to ascertain (among other things) the extent and condition of

boundaries, the presence of any invasive species, quality of the land, possible land

 contamination, flood risk or any other liabilities in respect of river bank

maintenance, culverts and ditches and any other specific concerns, to the Client’s

satisfaction.

iii. For the avoidance of doubt, the Valuation will include the full extent of the Property’s

title, however for areas that have not been included within the Inspection, the

Report and Valuation will assume that no material issues exist.

h) In completing the Report, the following assumptions will be made by the Valuer in respect

of the Property. If any of these assumptions are incorrect then these should be discussed

with the Valuer before the Valuation Service is undertaken.

i. the ground conditions are not affected by the existence of noxious substances,

landfill or mineral extraction, or other forms of contamination;

 ii. no high alumina cement concrete or calcium chloride additive or other potentially

deleterious material was used in the construction of the property or has since been

incorporated;

iii. the Property is not susceptible to radon gas pollution;

iv. the Property is not subject to any unusual or especially onerous restrictions,

encumbrances or outgoings and that good title can be shown;

v. the Property and its value are unaffected by any matters which would be revealed by

local or environmental searches, and replies to the usual enquiries, or by any

statutory notice, and that neither the property, nor its condition, nor its use, nor its

intended use, is or will be unlawful;

vi. the inspection of those parts which have not been included in the Inspection in

accordance with these Terms and Conditions would neither reveal material defects

nor cause the Valuer to alter the valuation materially;

vii. it is assumed that unless otherwise stated, roads, sewers and services outside the

curtilage of the property are the responsibility of the Local Authority or other

statutory body. It is further assumed, unless otherwise stated, that all services,

roads etc, are available under normal terms;

viii. the Valuation is based on the assumption that the Property is being sold with vacant

possession and, unless otherwise stated, for owner occupation;

ix. that further investigation into Planning Permission, Building Regulation, hazardous

materials, onerous restrictions etc, will not reveal anything sufficiently adverse as to

materially affect the Valuation;

x. any other assumptions will be clearly stated in the report, however, the Valuer shall

be under no duty to verify these assumptions and the Client should ensure the

assumptions are correct.

 i) Sustainability

 i. If we have not been provided, or cannot obtain, an up to date EPC rating for this

property our valuation will be based on the assumption that the subject property will

meet the minimum requirements laid down by legislation and that there will be no

adverse impact on value and marketability. It is advisable to obtain an expert’s

opinion to advise whether an EPC should be commissioned and if the building is likely

to meet with the legislative requirements.

 ii. If the EPC certificate that has been provided indicates that the subject property will

fall within the acceptable energy performance range for the purposes of the Energy

Act 2011, the method of assessment may have changed since the EPC certificate was

issued. Although the legislation is not expected to be reviewed again until 2020, it is

advisable to obtain an expert’s opinion on whether the building would still comply

with the minimum standard if the building were re-certified under the current

methodology.

 iii. If the EPC certificate that has been provided indicates that this property does not

meet the minimum acceptable energy performance standard for the purposes of the

Act, unless the property qualifies as exempt, capital expenditure may be required to

upgrade the property to an acceptable EPC rating standard. Failure to do this may

result in it being unlawful to rent the property, with an associated impact on

marketability and value. It is therefore advisable to obtain an expert’s opinion on the

status of the property. Our valuation will be based on the assumption that the

property is not exempt and will reflect the fact that improvement will be required in

order to bring the property up to the minimum acceptable energy performance

standard.

4. Limitation of Liability

a) The Firm shall under no circumstances whatsoever be liable to the Client, whether in

contract, tort (including negligence), breach of statutory duty, or otherwise, for any loss of

profit or any indirect or consequential loss arising under or in connection with the Contract;

b) The Client hereby accepts that any claim for losses arising in connection with any matter

under the Terms of Engagement must be brought against the Firm, irrespective of whether

such claim is made in respect of alleged breach of contract, or breach of duty of care, or in

respect of any alleged tortuous act or omission.

 c) Furthermore, the Firm will cease to carry any liabilities for any alleged loss unless the Client

has notified the Firm in writing within six years of the date of the Valuation.

 d) None of the Firm’s employees, partners, affiliates or consultants individually has a contract

with the Client or owes the Client or the prospective purchaser or any other party a duty of

care or personal responsibility. The Client therefore agrees not to bring any claim against

any such individuals personally in connection with the Valuation Service provided. Whilst

the Firm’s employees are protected by this clause under the Contracts (Rights of Third

Parties) Act 1999, it is agreed between the Client and the Firm that these Terms and

Conditions (including this clause) may be varied by mutual consent at any time, without the

need for the Firm to seek leave or permission from its employees. To the extent that any

part of this notification is a restriction of liability within the meaning of Section 1 of the

Unfair Contract Terms Act 1977, it does not apply to death or personal injury resulting from

negligence.

e) The Firm’s entire financial liability (including that of its employees etc, as set out above) is

hereby limited to the Value as stated in the Firm’s Valuation Report for the Property or

£1,000,000 (One Million Pounds), whichever is the lower and in as far as such limitation is

lawful.

f) These Terms of Engagement do not include any warranties, conditions and other terms

except as stated herein and as required by law. The Valuation will be provided after

diligent consideration and research but property values are subject to fluctuation and the

valuation process is inexact and thus the Valuer’s opinion is subject to a degree of tolerance

depending on the property and the availability of comparable evidence. Valuations are

provided to assist the Client in making a prudent decision: they are not provided as some

form of guarantee of value.

g) Where loss is suffered by the Client for which the Firm and a third party or any other party

are jointly responsible, any recoverable loss by the Client from the Firm will be

proportionate to the Firm’s relative contribution to the loss suffered and subject to the

provisions of clause 4(e).

h) Where the Client is composed of more than one entity, then the Client’s liability will be joint

and several with such other entity or entities.

i) The Client acknowledges that the Firm shall have no liability for any inaccuracy in the

Valuation Service where this is due to an inaccuracy in the Client Information.

j) The terms implied by Sections 3 to 5 of the Supply of Goods and Services Act 1982 are, to

the fullest extent permitted by law, excluded from the Contract.

k) This Clause 4 shall survive termination of the Contract.

l) The Client’s failure to follow the requirements set out in these Terms and Conditions will

invalidate the Valuation Service.

m) Nothing in these conditions shall limit or exclude the Firm’s liability for:

i. Death or personal injury caused by its negligence, or the negligence of its employees,

agents or subcontractors;

ii. Fraud or fraudulent misrepresentation; or

iii. Breach of the terms implied by Section 2 of the Supply of Goods and Services Act

1982 (Title and Quiet Possession).

5. General Terms

a) In the event of one of the Terms and Conditions herein being held to be unenforceable, the

remainder of the contract is not affected.

b) The Client shall pay the Firm in respect of the said professional advice a fee to be agreed

between the Client and the Firm. Money paid in advance will be held in the Firm’s Clients’

Account: Hortons Valuers Ltd – Client Account, Natwest Bank. This account is non-interest bearing. In addition, the Client will

reimburse the Firm the cost of all reasonable out-of-pocket expenses which may be

incurred and pay the amount of any Value Added Tax on the fee and expenses.

c) If the Client has agreed to accept reimbursement of the fee paid, or the Firm’s fee account

has not been settled within three months of the date of the invoice, then it is agreed that the

Client has placed no reliance on the report and thus the Client or any permitted assignees

will not be entitled to pursue any action for alleged negligence, breach of contract or breach

of duty. This does not limit the Firm’s entitlement to the agreed fee.

d) If the Client has any dissatisfaction with the Valuation Service, the Firm has a complaints

procedure in accordance with the requirements of the RICS. A copy of this will be provided

on request.

e) The Firm is regulated by the RICS and it is advised that the RICS may, as part of its

Regulatory function, check the report for compliance with the current version of the RICS

Red Book.

f) Failure to follow the requirements set down by these conditions will invalidate the Report

and the Valuation.

g) This contract for the provision of this Valuation Service is subject to English law. Any

dispute in relation to this contract, or any aspect of the valuation, shall be subject to the

exclusive jurisdiction of the Courts of England and Wales, and shall be determined by the

application of English law, regardless of who initiates proceedings in relation to the

valuation.

h) Data Protection: the Firm takes its responsibility under the General Data Protection

Regulation very seriously. Our Privacy Policy details how we collect, use, maintain and

disclose personal data.

i) Intellectual Property: All intellectual property rights arising out of the Valuation Service

(‘Deliverables’) shall be owned by the Firm excluding the Customer Information. The Firm

grants the Client, or shall procure the direct grant to the Client of, a fully paid-up,

worldwide, non-exclusive, royalty-free licence for the duration of the Valuation Service to

use the Deliverables for the purpose of receiving and using the Valuation Service and the

Deliverables in its business.