Commercial valuation for remortgage

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    Commercial valuation for remortgage

    Hi we have just had a valuation for remortgage of a commercial property fully let in good condition in a good secondary position.
    The valuer has valued it 50% lower that in what we believe is the value,
    Is there any redress on the valuer that we had to pay over 1k for? there is evidence of similar units sold at our value price and even more evidence of units 75% smaller and in less prominent positions to ours achieving what they valued ours at.

    Not very happy as this could cost us 1% on the commercial rate. Any advice would be welcome.

    #2
    In my experience (as an observer). it's not unusual whenever there are signs that the market for the sort of property concerned is slipping for valuers to go into panic-mode and become overly cautious. More years ago than I care to remember, a reputable chartered surveyor at that time used to qualify his valuation opinions with the phrase 'in a normal market'. Personally, I don't think one should regard a market as 'normal' - the market is what it is at the valuation date and it's for valuers to adjust attitudes in sync, not to keep alive how things were as if sacrosanct.

    As I understand, the valuation report is to advise the lender. That you as the borrower pay a fee to the lender so that the lender can pay the valuer does not, in my view, give you any rights over the valuer's opinion - unless you could prove negligence on the part of the valuer. But even if you could prove such I think that the lender would have to be a party to the proceedings. Whether the valuer has any duty to you in tort I do not know.

    According to the principal case-law, Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964],

    "Where a person is so placed that others could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, and a person takes it upon himself to give information or advice to, or allows his information or advice to be passed on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise."

    The short answer is that if you can provide evidence to the lender of similar units sold at your value price at the same valuation date and if that evidence had not already been taken into account by the valuer then the lender might be amenable. But if the valuer has taken that evidence into account and would be unwilling to revise the opinion. then you would have to show why his opinion is wrong - to do that you would need to instruct another valuer to provide a second opinion.

    On-balance how far you want to take it depends I would think on the difference between the cost of proving your point and 1% on the borrowing rate. Alternatively, arguably the best test of a valuation opinion is to sell the investment - except that a sale 'now' would be after the valuation date so might not fall within the valuation bracket (ie, acceptable margin of error).

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