To : ALL REGISTERED VALUERS AND PROBATIONARY VALUERS
Date : 11 DECEMBER 1999
Dear Sir / Madam
INDICATIVE VALUES
It has come to the attention of the Board that there are Valuers and Appraisers who do provide "indicative values" to the clients. From the information that has been received by the Board, the indicative values are provided in formal letters that are signed by the Valuers and Appraisers. Such a practice is a clear violation of the Malaysian Valuation Standards issued by the Board which is operative since the 1st September 1998.
The Malaysian Valuation Standards, which is mandatory for all Registered Valuers and Registered Appraisers practising in Malaysia, recognise, as a general rule, only opinions of value that are communicated by detailed reports that comply in content with the specifications as laid down in the Malaysian Valuation Standards. The valuation report must specifically be in compliance with Standard 7 of the Malaysian Valuation Standards.
The only exception to the general rule for opinion of value to be communicated by any other means other than by way of a detailed report are in instances such as for update valuations and where an opinion of value is provided in advance of the detailed report. Standards 8 is the operative Standard for the provision of update valuations. The introduction to this Standard is instructive, as follows :-
"Whilst the general rule remains that a valuation should be communicated to a client only by way of a detailed report, letters in advance of the detailed report notwithstanding, a detailed report may not be essential in communicating an opinion of value to the client in certain limited cases. Such instances include situations where a previous valuation has been done by the Firm and a financial institution which has loaned funds on the collateral security of the property now requires an update of the value for the sole purpose of assessing the adequacy or otherwise of the collateral security. Such valuations are referred to as update valuations."
Important criteria for the provision of an update valuation are that there must have been a previous valuation that must have been prepared by the Firm (not another Firm) and that previous detailed report must have been prepared more than three years prior to the required update.
Attention is also drawn to the "Explanations" under Malaysian Valuation Standards 8 which reads :-
"Firms are permitted to undertake only full valuation reports as provided for under MVS 7. Thus valuations which are commonly referred to as "Brief Valuations", "Check Valuation", "One Page Valuations", "Desk Top Valuations’, "Verbal Valuations", "Proforma Valuations", "Limited Scope Valuation" etc are NOT permitted to be undertaken by Valuers.
All Registered Valuers and Registered Appraisers are hereby warned not to deviate from the strict requirements of the Malaysian Valuation Standards.
Yours faithfully
LEMBAGA PENILAI, PENTAKSIR DAN EJEN HARTATANAH MALAYSIA
R MAHALETCHUMI
Registrar
