15 Sep 22 by Jane Falkner
Dispute Resolution Service
We have been instructed on a variety of valuation jobs in the last few months which come under the Dispute Resolution Service umbrella, including section 18 valuations and expert witness jobs, acting for both Landlords and Tenants, as well as third parties.
Section 18 Valuation
Section 18 is a statutory provision which enables valuations to be prepared to assess the loss in value of the landlord’s interest in a property because of the repairs not being undertaken by the tenant. Two valuations are involved. The first is the value assuming the tenant has complied with their repairing obligations under the Lease – it is important to remember it is the condition in which the Lease required the tenant to hand back the property, not an assumption the whole property is in good condition. The second is the value in the actual condition of the property at the end of the Lease. The difference between the two valuations is called the diminution in value. If the diminution is less than the cost to the landlord of doing the works, the landlord can only recover the lower figure. Your Building Surveyor must still negotiate the best position for you on the legitimate elements of the Schedule of Dilapidations, but then your Valuer, working closely with your Building Surveyor, can undertake the section 18 valuations; after the initial report is submitted, negotiations usually follow.
We are currently involved with Section 18 valuations for retail and industrial premises.
Expert witness jobs in valuation are generally undertaken for Market Rent or Market Value purposes, As the title suggests, the purpose of an expert’s report is to set out their opinion on matters within their expertise. An expert witness valuation surveyor can act for either party in the dispute or they can be instructed as a single joint expert. Usually, it is up to the parties to agree who is appointed as the single joint expert but if the parties cannot agree, the Court may select the expert from a list put forward by the parties or can direct how the expert is selected. We have recently undertaken an expert witness job for Market Rent in a dispute due to a property defect and the resulting impact that this has on the rent that the investor may receive for the property. Likewise, we are currently involved in a Market Value instruction for a dispute over the legal ownership of a property.