The RICS House-buyer’s Report and Valuation and the ISVA Home-buyer’s Standard Valuation and Survey have been described as a halfway house, halfway that is between a mortgage valuation and a full structural survey, satisfying neither the needs of a concise valuation nor a more detailed report on the structure. However, properly applied they fulfil a particular need in providing a detailed but concise statement as to the repair, condition and, if required, the value of a property, providing an overall assessment which the prospective purchaser can use in deciding on the soundness or otherwise of a particular purchase. If this is to be achieved it is essential that both client and practitioner are clear as to what the report is.
At one extreme, the mortgage valuation is essentially a valuation and not a survey. It will be concerned primarily with matters affecting value: location, size and accommodation, but will also include a general appreciation of the condition of the building. The RICS/ISVA guidance note for valuers, Mortgage Valuations, refers to the relevant factors which should be taken into account:
(1) age, type, accommodation, fixtures and features of the property;
(2) construction and general state of repair; subsidence, liability to flooding and other risks;
(3) siting and amenities of the locality;
(4) easements and burdensome or restrictive covenants if known or apparent.
The external features of the property will be inspected, in so far as they are visible from ground level, and internally the valuer will be expected to inspect the main roof void, to the extent that it is visible from the roof access, as well as ceilings, walls and floor surfaces, to establish their condition. The valuer will be required to identify the main services. The inspection will not include any parts of the internal and external structure not readily accessible or visible and will not comment on the efficiency or condition of service installations unless there is some obvious defect.
The structural survey, however, is based on a detailed inspection of the property and will advise on defects and the cost of remedying such defects. It will not normally contain a valuation. The inspection will certainly comprise a detailed and systematic examination of all the internal and external surfaces of the building, but will go much further in examining timber for decay, all aspects of the structure for dampness and will normally involve the testing of services.
Inspections and reports for the standard House-buyer’s Report differ in several important respects. It is intended that this form of report should apply to houses and bungalows but not flats, for which there is a separate report format. It is recommended, however, that they should be limited by the exclusion of properties constructed prior to 1900 and is not considered suitable for properties in excess of 200m2 (2,000 sq ft). It is evident that reports are being prepared in respect of properties outside these limits, but this must be at the discretion of the individual surveyor.
With any survey or valuation it will be necessary to agree the conditions of engagement prior to carrying out the inspection. This will ensure that the client is fully aware of the precise nature of the inspection to be carried out. Both RICS and ISVA standard reports include terms of engagement in a form which can be sent to the client to read, sign and return. These terms identify the purpose of the report “to provide a concise and readable account of the general condition of the property to which it relates, to assess the value and identify essential repairs”. The terms make clear in precise detail the extent of the surveyor’s inspection. The property is examined as it stands and furniture, fixtures and fittings will not be moved and floorboards will not be lifted. Any part of the structure above first-floor level will only be inspected externally and only roof areas below 3m (10 ft) in height will be examined with the aid of a ladder. Foundations will not be exposed nor will any of the services be tested, except for water flows and the condition of cold-water storage tanks, unless tests are specifically requested by the client.
Only when the terms of engagement have been returned by the client will the inspection be carried out. Although this will not be as lengthy or detailed as the full structural survey, it should be evident from the above that a certain amount of equipment will be essential. As a minimum, this will include a torch, damp meter, folding ladder, tape and binoculars.
While it is impossible to suggest a detailed strategy for inspection to cover all properties and to suit all surveyors, it is essential that this is sufficiently methodical to ensure that nothing is overlooked, and care should be taken to relate external features to internal evidence.
Detailed information on the inspection of domestic properties is contained in a previous “Mainly for Students” article (January 25 1986, p 319).
The report itself is written on a standard pro forma extending to several pages with a series of headings with marginal notes indicating the extent of consideration for each item. It is necessary for the surveyor to identify the weather at the time of the inspection as well as the period leading up to inspection. This is important for several reasons. Certain weather conditions will have a restricting effect on the extent of the inspection: snow, for example, will render an external inspection of the roof surfaces impossible In periods of dry weather it will not be evident if there are any leaks in the rainwater goods. The introductory part of the report will contain a brief description of the property including its age and type and a note on the location of the property and accommodation.
It continues with an assessment of the external structure which for each item should identify the nature of the structure, the materials used, the type of construction, its condition and an identification of any major repairs. Thus the comments on the exterior roof structure might extend to “slate covered hipped and gabled roof on a timber frame. A small number of slates are missing and others have slipped and will require replacement. In view of the age of the building it is likely that the nail fixings may be subject to failure and this should be further investigated”. The internal structure will be commented on in general terms with comments on the condition of walls and ceilings as well as any known or likely defects.
Floor surfaces should be examined where possible but, in making general comments based on a limited inspection owing to the presence of furniture or floor coverings, it is essential to make quite clear that the assumption is based on a limited inspection. The surveyor will be expected to use a moisture meter to check for dampness in all parts of the structure at regular intervals.
The services will not be tested but sufficient note should be taken to establish the location and type of service connection. Inspection covers should be raised if possible. Care should be taken to examine wiring by removing switchplates, and sanitary installations should at least be checked as to correct functioning, flushing of toilets and water pressure. The report will include general comment on any outbuildings and garages which form part of the property. Where significant problems are identified or suspected, the surveyor should recommend referral to specialists. This might apply to suspected timber defects, woodworm or dry rot for example, problems with services, subsidence and settlement, the extent of which will not always be apparent from the limited inspection carried out.
General comment will be made on the tenure and nature of occupation, with details of any tenancies where appropriate as well as the effect of any projected clearance, redevelopment or other statutory schemes. The report contains a summary section under which the valuer should reiterate and emphasise any important defects requiring immediate attention and where appropriate the nature and cost of any remedial action.
The surveyor should also be prepared to advise on any further specialist advice he would recommend to ensure that the purchaser has all the information he requires.
Finally, the valuation is included on the basis of open market value of the property in its existing state and ignoring the value of any removable items, fixtures, fittings and furnishings, which should not be included.
For a fee which is more than the cost of a mortgage valuation but less than the cost of a structural survey, the client can expect a detailed report which should provide the information needed to decide whether to proceed with a purchase in the confidence of knowing what commitment is being taken on. In view of the obvious demand for this type of service it is clear that it offers something of value, filling a gap in the other services provided by valuers and surveyors in the domestic market, assuming always that a proper standard of care is applied and that the client is fully appreciative of the limitations of the inspection carried out.