Commercial valuation for remortgage

  • Filter
  • Time
  • Show
Clear All
new posts

    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.

    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).


    Latest Activity


    • garage lease
      Hi All,

      What is the average ball park figure for a lease length for a garage in London. it has its own title deed. If the lease is around 20 years remaining. is it as simple as applying for a lease extension , or can the freeholder withhold?

      thank you
      18-08-2019, 13:22 PM
    • Reply to garage lease
      After the lease ends the freeholder may not wish to extend it and if so it will become their property? if for arguments sake the lease is 20 years remaining (unsure what the average is for a garage) and I have yet to purchase the garage, is it best to agree on extension before purchase?

      18-08-2019, 21:43 PM
    • Reply to garage lease
      You have no statutory rights here at all (it is not a residential property). So it is matter of asking for a price and agreeing that, if you get agreement, otherwise there is nil you can do. In 20 years it will case to be your lease controlled garage....
      18-08-2019, 17:34 PM
    • Authorised Guarantee Agreement

      2.5 years ago, I sold a leasehold business and assigned the lease to the new people, I had to sign an AGA.

      I hear last week somebody else has now purchased the business, I would assume the lease has been assigned to the new people and therefore my liability has been released......
      18-08-2019, 14:06 PM
    • Sound insulation between Units
      I am an investor in a gym operating out of a former warehouse unit in an industrial area. The unit next to us (owned by same LL) is becoming vacant, and I am checking out the risk of future noise complaints.

      The business is a gym which uses music. We have the correct use class covering...
      11-08-2019, 09:27 AM
    • Reply to Sound insulation between Units
      I'm not concerned, but unfortunately other people are. And if I have a good answer to the questions I can head them off at the pass !...
      11-08-2019, 10:39 AM
    • Reply to Sound insulation between Units
      I wouldn't concern myself. If someone rents a place next to a gym, they would surely notice it when they viewed.
      11-08-2019, 09:39 AM
    • Lease expired
      We own an industrial unit occupied by tenants paying monthly rent under the terms of a nine year lease that expired four years ago. We need the premises ourselves and I understand we can apply to obtain vacant possession as we need the premises ourselves to run our property business from. We need to...
      03-08-2019, 08:40 AM
    • Reply to Lease expired
      If the existing nine years lease contains rent reviews then depending upon the wording of the review interval/frequency then it may be possible to review the rent without renewing the lease.

      If you've owned the property for at least 5 years then under LTA54 s30(1)(g) you could oppose renewal...
      04-08-2019, 09:32 AM
    • Tenant no lease
      Hello Everyone,

      I am hoping to get some advice and direction all of you. I have a tenant who moved into a commercial property 3 years ago. Prior to moving in, the tenant agreed to sign a lease etc however we somehow provided him with the keys and he started trading from there without a...
      16-07-2019, 19:37 PM