MALAYSIA VALUATION STANDARD RED BOOK MVS 6 7

MALAYSIA VALUATION STANDARD RED BOOK ( MVS 6 & 7) By: SAIFUL NIZAM ALI Department of Urban Studies(D. O. U. S. T), IITechnology

MVS 6 – Conditions of Engagement INTRODUCTION: Valuers must always seek to understand the client’s need wherever possible and therefore should be stated written agreement indicating the scope of services, reporting formats, assumptions to be made and anything limiting conditions To ensure the highest standard of service provided valuer must - has necessary qualification - good experienced - Independent valuers - no conflict of interest

Statement of Standard Before the valuation is made , must clearly understand the client’s needs and confirm the service to be provided. Both parties must be properly communicated about report to be made - purpose of valuation - relevant date of valuation if not the DOI - Interest to be valued - Assumption to be made - requirements of supporting document - responsibility of fees - Limiting Condition MVS 17

MVS 7 – Purpose of Valuation Should clearly understand to determine best basis of valuation to be used. Purpose and basis to be adopted must comply with the following unless the client, statutory/regulatory requirements or legal documents specify otherwise.

Purpose of Valuation For financing purpose – as discussed in previous lecture. For fire insurance – Reinstatement Cost New basis or other basis as stated in policy. For Financial Reporting – in MVS 3 For Sale and Purchase – basis must be Market Value. For Auction - basis MV stipulated under NLC, SLC & LO For SC – Will be cover in details in MVS 14 For director of insurance and Takaful – MVS 15 Compulsory Acquisition – accordance to Land Act 1960. Rating Purposes – AV or IV

Tutorial Explain the followings: 1. What is Special Assumption. 2. What is Reinstatement Cost and Replacement Cost. 3. Explain the property obsolesce elements.