Last December, I published an update on the seven steps to follow to avoid having a valuation set aside. Since that time, there have been two more valuations set aside, so I have updated the 7 steps.
Seven steps for valuers to consider
- Survey the premises to be valued by independent surveyors.
- If the Retail Leases Act 2003 (Vic) (Act) applies to the lease, restate the requirements of section 37 (2) and Section 52 of the Act in the valuation.
- Restate the market rent review requirements of the lease in the valuation.
- State in the valuation that you have complied with the market rent review requirements of the Act and the lease.
- State in the valuation the matters to which you had regard in arriving at a market rent determination.
- Give detailed reasons as to why you determined the rent at a particular amount.
- Get expert legal advice of any contentious matters, which is paid for by the landlord and the tenant.
The above are the seven steps I recommended in December 2017. However, I have added to the second step (in bold above) following the decision at VCAT in Josephine Ung v Jagjit (2017). You may recall from that decision that VCAT determined that the valuer must have had regard to Section 52 of the Retail Leases Act 2003 (Vic). The section imposes various obligations on a landlord to maintain the premises in their condition as at the commencement of the tenancy.
Since 2015, there have been four reported valuations set aside by VCAT. To minimise the possibility of your valuation being set aside I recommend that you follow the above steps.