In brief
In 328 Hampshire Road Pty Ltd v Medical One Pty Ltd (Building and Property) [2021] VCAT 1117, another rental valuation was set aside for failing to provide detailed reasons in compliance with section 37 (6) of the Retail Leases Act 2003 (Vic).
What you need to know
If a valuer is conducting a rental valuation, the valuer is required to provide detailed reasons for the rent determined. If a valuer determines a rent should be an amount per square metre, the valuer will need to put in writing why the rate has been chosen. It is not enough to simply specify the rates for each comparable property, unless the valuer also specifies why the properties are relevant and why the rate and rent selected are appropriate.
Background
A valuer will need to:
- Consider the evidence and state why the comparable properties are relevant;
- Specify why a rate per square metre (as was in this case) has been chosen; and
- If an average of various rates of comparable properties is chosen, state why this method has been selected.
No leaps to judgement can appear to occur. If the valuer selects a rate per square metre for example, the valuer will need to explain why the rate has been selected.
Conclusion
In conducting a rental valuation, a valuer must provide detailed reasons to comply with the Act.
Please see my last update with further guidance.
