17 CONTENTS OF A REAL PROPERTY VALUATION REPORT

In summation, the term real estate refers to the totality of all the things that make up the whole world – the air, sea and ocean, land and buildings, sky, forests, rocks and mountains, infrastructural facilities, plants, machineries, equipment, tools, furniture and fixtures, mineral resources beneath and above the earth surface, etc.–including mankind (Gen 1 vs. 26-28).

Property Valuation in real estate practice terminology refers to the process or exercise of estimating or assessing the monetary worth or value of a particular interest in land and/or landed property for a specific purpose, in a particular location and within a stipulated time frame.

There are so many reasons and purposes why a real property valuation exercise is embarked upon amongst which are;

·         Sale or Purchase

·         Probate

·         Auction

·         Compensation

·         Rating and/or Taxation

·         Balance sheet

·         Insurance

·         Mortgage

·         Going concern

·         Loan advancement

Before a real estate valuation exercise can be undertaken, the professional Estate Surveyor and Valuer appointed for the exercise owes it a duty to establish the reason or purpose for which the property valuation exercise is needed as it is by this he/she will be able to apply the required basis of value and necessary valuation methods in arriving at his/her opinion of value.

The conventional five (5) different valuation methods that can be adopted by a professional Estate Surveyor and Valuer when carrying out a real property valuation report exercise are;

·         Comparative/Comparison Method

·         Residual Method

·         Cost/Contractor’s Method

·         Investment Method

·         Profits/Accounts Method

One or more of these five (5) conventional valuationmethods can be adopted by the Estate Surveyor and Valuerwho is undertaking a property valuation report exercise in arriving at the best opinion of or assessed value of the property based on his/her discretion, experience and skills.

CONTENTS OF A VALUATION REPORT

A real estate valuation report or certificate is a professional and legal document which explains the rigorous and analytical processes undertaken in carrying out a property valuation exercise and which presents well detailed and meaning information used in the analysis that led to the opinion of value been arrived at by the professional Estate Surveyor and Valuer.

The following items/elements must be found in a real estate valuation exercise report before it can tenable as well as regarded as a comprehensive professional document written by a competent and professional Estate Surveyor and Valuer who is a member of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) and alsoduly registered by the Estate Surveyors and Valuers Registration Board of Nigerian (ESVARBON) to carry out professional real estate surveying and valuation practice in Nigeria.

1.      Cover letter/Information

2.      Location of real estate to be valued

3.      Neighbourhood Characteristics

4.      Site Description

5.      Construction Details of Buildings

6.      Accommodation Details

7.      Utilities and services provided on the real property been valued

8.      General condition of the valued real property

9.      Tenure

10.  Date of Inspection/Valuation

11.  Purpose of Valuation

12.  Assumptions

13.  Basis of Valuation

14.  Method of Valuation

15.  Opinion of Value

16.  Caveat/Limiting Conditions

17.  Official stampand signature of the professional Estate Surveyor and Valuer

The elements/items identified above are what make up a detailed and comprehensive real propertyvaluation report.

A professional real estate/property valuation report constitutes the end product of a rigorous process of collecting, collating, calculation and analysis of data by the professional Estate Surveyor and Valuer in arriving at his/his opinion of value/worth of the property been inspected or valued and whose outcome is very important to the client.

To know the monetary worth or value of any class of properties for whatever purpose(s), it is mandatory and compulsory to always embark on the services of the Estate Surveyor and Valuer as he/she is the professional that have been trained in the art and science of real estate management and valuation as well as duly registered by the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) via the Nigerian Institution of Estate Surveyors and Valuers (NIESV) to carry out estate surveying and valuation practice in Nigeria.

This article is very important for all those that require the services of professional Estate Surveyors and Valuers, as well as those preparing or sitting for the Nigerian Institution of Estate Surveyors and Valuers (NIESV) Professional Qualifying Examinations (PQE 1-3) and the Professional Practice Examination (PPE) Certificate.

ABOUT THE AUTHOR

Adeniyi Akinjiyan has a Higher National Diploma (HND) in Estate Management from the prestigious Yaba College of Technology, Yaba, Lagos state, Nigeria. He also possesses a Professional Practice Certificate in Estate Surveying and Valuation from the Nigerian Institution of Estate Surveyors and Valuers (NIESV).

He is the principal consultant at Aakient Consultants Ltd, a highly progressive and consolidated property and construction project management company, which is committed to providing the highest level of professional services in meeting clients’ real estate needs.

Feel free to contact him at: aakientconsultants@gmail.com

NIESV'S QUALIFICATION PROCESS & REQUIREMENTS

Last week I got a message from a reader of articles from this blog site about the next step to take in qualifying as a registered Estate Surveyor and Valuer after taken the Professional Practice Examination (PPE) organized by the Examination Committee Board of the Nigerian Institution of Estate Surveyors and Valuers (NIESV). The reader has before now read one of my articles on this blog site titled “6 Steps On How To Become An Estate Surveyor and Valuer”

So today, I will write on the NIESV’s Qualification Process and Requirements which was the title of the message I sent as a response to the question the reader I mentioned above asked me. But before I go ahead, let me briefly explain the meaning of NIESV to you as well as what it stands for.

NIESV is an acronym for Nigerian Institution of Estate Surveyors and Valuers. It is a professional association statutorily enacted– Estate Surveyors and Valuers (Registration, etc) Act of 1975 – by the Federal Government of Nigeria to monitor and regulate Estate Surveying and Valuation professional practice and activities in Nigeria.

NIESV is the sole professional association recognized by the Federal Government of Nigeria to carry out professional expertise and services in diversified areas of Estate Management such as Property and Facility Management, Estate Agency, Valuation, Feasibility and Viability Appraisal, Property Rating and Taxation, Project Management, Property Development, etc.

NIESV is also a sister professional association to the Royal Institution of Chartered Surveyors (RICS), UK

Below is the question of the reader and my response as well.

Thank you very much for taking time out to reply my message. I am very grateful.

The question I want to ask you is simple. After writing the PPE exam, what will I require to commence my thesis and how long can that take averagely? Am asking because I heard I will be needing points gathered from attending seminars. I don’t know how true this is. Thanks for your anticipated assistance

Hello,

About you getting registered as a professional Estate Surveyor and Valuer, you will need to follow the steps which I will explain below:

1. If you are a Graduate of Estate Management from a recognized University which is accredited by the Examination Committee of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), then you will only need to write Professional Practice Examination (PPE)

2. After writing and passing the PPE examination, the next stage is for you to submit a Thesis/Project Proposal of three (3) topics of your choice which must be signed by your chosen Supervisor and sent to the Examination Committee of NIESV in Abuja for approval. Your chosen supervisor might be your former lecturer, professional member of NIESV or your current or past boss all of whom must be at least an Associate Member of NIESV.

3. The Examination Committee of NIESV will then approve a particular Thesis Topic which will be selected from the 3 thesis/project proposal topics you submitted initially or as otherwise deem appropriate by the examination committee.

You can write and complete your Professional Thesis anytime you want (ranging between 3months – 1 or 2 years) but depending on your Supervisor and/or how fast you are in writing the thesis.

4. While you are writing your Professional Thesis or even before you start writing, it is very mandatory and compulsory that you must at least attend 2 National Conferences, workshops, or Seminar organized by NIESV at the National level and 2 State Branches’ Seminars, workshops or conferences organized at the Regional level to accumulate the required Membership Grade Points needed to be elected and registered as a qualified Estate Surveyor and Valuer after completion of your professional thesis. 

The Membership Grade Points for National Conferences, workshops or Seminars varies between 3-7points, depending on the particular event you attended amongst them, while that of the State Branches' Seminar, Mandatory Continuing Professional Development (MCPD) programmes also carry some grade points as well.

Membership Grade Points accumulated during the period of your Graduate/Probationer Membership will go a long way in determining how fast you will be fully Registered and Elected into the Institution as a qualified Estate Surveyor and Valuer. This is so, as you will need to present all the Membership Grade Points Certificates received from the various Seminars, Conferences, MCPD programmes, Workshops that was organized by NIESV either at the National or Regional Level and which you attended.

So, what your friends told you about getting Membership Grade Points as a requirement for registering and becoming a qualified Estate Surveyor and Valuer is really true.

I hope you find this information helpful and useful.

Do feel free to contact me anytime you require further guidelines or assistance on the above subject matter

The explanation above is one of the major stipulated requirements for becoming a qualified Estate Surveyor and Valuer in Nigeria as been laid down by NIESV. 

So, whoever is considering becoming a qualified Estate Surveyor and Valuer in Nigeria must take cognizance of the points mentioned above as well as read my previous article titled “6 Steps On How To Become An Estate Surveyor and Valuer” for further guidance.

ABOUT THE AUTHOR

Adeniyi Akinjiyan is a Higher National Diploma (HND) holder of Estate Management from the prestigious Yaba College of Technology, Yaba, Lagos state, Nigeria. He possesses a Professional Practice Certificate in Estate Surveying and Valuation from the Nigerian Institution of Estate Surveyors and Valuers (NIESV).

He is the principal consultant at Aakient Consultants Ltd, a highly progressive and consolidated property and construction project management company, which is committed to providing the highest level of professional services in meeting clients’ real estate needs.

Feel free to contact him at: aakientconsultants@gmail.com

9 PROPRIETY RIGHTS ENJOYED FROM LAND AND PROPERTY OWNERSHIP

Owning land and/or landed property is one of the fundamental ideologies behind man’s existence on earth. This is largely due in part to it been used as a yardstick in determining one’s level of success, influence, status and socio-political power among family members and relatives, peer groups, colleagues and the society at large.

However, there are some certain types of propriety rights that are enjoyed from owning land and landed properties which I will explain to you today. But before I go on with my explanations, let me briefly define Estate Management as a course of study in order to ignite your enthusiasm and curiosity on the topic.

Thorncroft, M (1965) defined Estate Management as “the direction and supervision of an interest in landed property with the aim of securing an optimum return. This return need not always be financial but may be in terms of social benefits, status, prestige, political power or some other goals or group of goals”

From the definition above, you will realize that it is through directing and supervising the various interests inherent in land and landed property ownership that brings about the study of estate management to assist and guide the property owner in achieving their identified goal or group of goals.

Propriety Rights and Interests are the Bundle of Rights which an owner of land and/or landed property has and enjoys from its ownership. 

Some of this bundle of rights includes:

·         Right to lawful possession

·         Right to alienate of transfer

·         Right to lease

·         Right to sell

·         Right to income accruing from land and landed property

·         Right to develop and/or redevelop

·         Right to mortgage it

·         Right to claim possession and ownership

·         Right to grant lesser interests and rights

1.      RIGHT TO LAWFUL POSSESSION

One of the rights which an owner of land and/or landed property enjoys from its ownership is the right to lawful and actual possession. 

An owner of land and/or landed property who has acquired a land and/or landed property legitimately from the appropriate source, has an exclusive right to take actual and lawful possession without any fear of been ejected or dispossessed from doing so. 

In the event of any government acquisition exercise, the owner of such land and/or landed property will be entitled to adequate compensation for the exclusive right of lawful possession which has been taken from him/her in such circumstance.

2.      RIGHT TO ALIENATE OR TRANSFER

Another right which an owner of land and/or landed property has over its ownership status is the right to alienate or transfer the land and/or landed property to his children, wife/husband, immediate family or any other person he/she so desires to alienate or transfer the land and/or landed property to.

What is only required from the owner of such land and/or landed property in transferring or alienating the land and/or landed property in question is a well written, signed and stamped document which specifically spells out who the land and/or landed property is been transferred or alienated to by the right owner. 

3.      RIGHT TO LEASE

This is one of the most common types of rights which an owner of land and/or landed property enjoys from its ownership. It is commonly found among property investors who owns residential and commercial land and/or landed properties that are leased out to prospective clients in need/demand of such class of land and/or landed property.

What the right indicates is that an owner of land and/or landed property has the exclusive right to lease out his land and/or landed property for tenancy or leasehold purpose in consideration for money paid in form of rent.

In exercising his right to lease the land and/or landed property, the owner usually employ the services of a professional real estate agent who is given the mandate and instruction to manage the land and/or landed property as well as accept rent paying tenants with good characters/beaviours into the property. 

4.      RIGHT TO SELL

Another right which is synonymous to the right to alienate or transfer land and/or landed property by the owner is the right to sell such land and/or landed property which he/she enjoys absolute ownership and possession anytime he/she wishes to do so.

An owner of land and/or landed property having absolute possession of the land as well as legitimate/genuine title documents on the land and/or landed property has the sole right to sell the land and/or landed property anytime he so desires to do asuch. 

The owner of the land and/or landed property can as well sell at any price he desires or as been advised by the professional Estate Surveyor and Valuer whom he has consulted for his/her expertise.

5.      RIGHT TO INCOME ACCRUING FROM LAND AND/OR LANDED PROPERTY

An owner of land and/or landed property also has the exclusive right to streams of income accruing from the land and/or landed property which he has absolute possession and ownership claim of. 

The streams of income accruing to owner of the land and/or landed property may be in form of leasehold, sales or development of the land and/or landed property.

6.      RIGHT TO DEVELOP AND/OR REDEVELOP

What an owner of land and/or landed property can also do from owning land and/or landed property is the right to develop or re-develop the land and/or landed property anytime he/she wishes to do so.

An owner of a bare land can for instance develop such land into different classes of built-up structures based on the need and demand for that type of structure. Such developed built-up structures may be in the form of residential accommodations, commercial and recreational structures.

Another scenario is a situation whereby the owner of land and/or landed property due the right he has on the ownership of such land and/or landed property redevelops it either to enable it meets up with the current building standard or modifies it into something different entirely.

7.      RIGHT TO MORTGAGE

The owner of land and/or landed property also has the exclusive right to mortgage his/her land and/or landed property with a mortgage or financial institution in consideration for loan advancement.

The land and/or landed property which an owner has mortgaged will serve as collateral for the loan advancement which he/she is seeking from the mortgage or financial institution.

The mortgaged land and/or landed property will revert back to the rightful owner once the loan instrument has been offset with the mortgage or financial institution by the owner.

8.      RIGHT TO CLAIM POSSESSION AND OWNERSHIP

The owner of land and/or landed property also has an exclusive right to claim possession and ownership from illegal occupants of such land and/or landed property.

In claiming possession or ownership of the land and/or landed property back from illegal occupants, the rightful owner will need to tender all his title documents legally tenable in any court of law which specifically indicate and reveal that the claimant is the rightful owner of such land and/or landed property in question.

9.      RIGHT TO GRANT LESSER INTERESTS AND RIGHTS

The other right which an owner of land and/or landed property also enjoys from such ownership is the right to grant lesser interests and rights on his/her land and/or landed property with some specified restrictions indicating the obligations of enjoying such rights and interests for whom it is granted by the actual owner.

Some of the lesser rights and interests which can be granted by an owner of land and/or landed property are: easement, license, profit aprendre, way leaves, covenants, etc.

I hope with all these explanations above, you are in a good position to know the various propriety rights you can enjoy from owning land and/or landed property.

ABOUT THE AUTHOR

Adeniyi Akinjiyan is a Higher National Diploma (HND) holder of Estate Management from the prestigious Yaba College of Technology, Yaba, Lagos state, Nigeria. He possesses a Professional Practice Certificate in Estate Surveying and Valuation from the Nigerian Institution of Estate Surveyors and Valuers (NIESV).

He is the principal consultant of Aakient Consultants Ltd, a highly progressive and consolidated property and construction project management company, which is committed to providing the highest level of professional services in meeting clients’ real estate needs.

Feel free to contact him at: aakientconsultants@gmail.com