UNDER CONSTRUCTION – NEW ZEALAND
Houses to be Built or Under Construction
When a valuation is being made assuming completion of the
development, the valuer shall state in clear and concise language
that the property has not yet been completed and that all values are
based on the assumption that the property is or will be completed in
accordance with the plans and specifications provided and the issuing
upon completion of a Code Compliance Certificate by the territorial
authority. The valuer should clearly establish the date to which the
would normally be the date of the report.
2.2 A valuation
report prepared on a house partially completed, or on a proposed house
prepared from plans and specifications, should describe in detail the
nature of the building materials, accommodation, quality and nature of
the fittings and finishes upon which the valuation is based.
2.3 Full details
of any site works which are included in the valuation should be
If it is anticipated that there will be any significant change in the
value of the property between the date of the valuation, and the
expected date of completion of the building works, then this should be
set out together with the reasons for the anticipated difference.
2.5 The effect,
if any, on saleability and value of the property as at the valuation
date due to such matters as partially developed site improvements,
uncompleted building works and such like should be taken into account
and commented upon in the valuation report.
recommended that a valuation report which assumes the completion of a
house and/ or site development which is either under construction or is
to be built or developed should include clauses on the following basis:
at the date of inspection the proposed improvements were
approximately __% complete.
this report is based on the assumption that the house will be
developed and completed according to the plans and specifications
described herein and that the standard of construction is in
accordance with that assumed within the report.
should be specifically noted that any significant deviation in
respect of style, layout, design or construction standards would
invalidate the value conclusions reached in this report.
values reported herein are based on data collected and reviewed as at
the date of this report. The valuer assumes no responsibility for
unforeseeable events that alter market conditions prior to the
completion of the development.
Progress Payment Inspections
If a valuation is required of building works in progress it is
incumbent on the valuer to verify that the work in progress conforms
with the plans and specifications provided, including check
of the building(s).
The valuer should note in his/her valuation of “Work in
Progress” not only the value of the work completed but also the
estimated cost to
the work in accordance with the plans and specifications.
Loose building materials, i.e. those not fixed in place, should not
be included in the valuation of work completed. If the valuer
however, reference may be made to such loose building materials.
Final Payment Inspection
requested to undertake a final inspection of the property the
valuer should refer the client to the original
valuation and date thereof, and refer to the client details of
any work remaining to be done.
4.2 The valuer
should inform the client as to whether the final balance of the monies
outstanding may be released, or if a further retention should
be made and the reasons why.
The valuer may wish to draw to the attention of the client prior to
the final inspection being made of the importance of obtaining
4.4 The valuer
should inform the client of the importance of obtaining a
completed Code Compliance Certificate before releasing any final monies.
Valuation of Previously Unoccupied New Houses
Valuers should be aware that it is essential when valuing previously
unoccupied new houses - either those completed or to be built
of comparable sales evidence should include not only similar new
houses but also re-sales of similar properties.
5.2 Some new
houses are offered for sale on finance terms favourable to the initial
purchaser and this is often reflected in the initial purchase price. In
addition the initial purchase price may reflect the building cost. The
valuer should have regard to all such factors in determining the
final value estimate.
The re-sale value of a house - particularly a previously
unoccupied new property can be adversely affected by incomplete
the property, whether the house itself or the site development.
Where the valuer considers that there is likely to be a
significant difference between the value of anew house and its
re-sale value in its same condition then this should be stated
clearly in the valuation report, showing both value as a previously
unoccupied new property and the re-sale value. The valuer should
always comment on any differential
the purchase price new where known, and the assessed market value as
a new house.
mortgage recommendations are provided the valuer should base such
recommendation on the re-sale value of the property.
Duty of Care
are reminded of the duty of care and responsibility they owe to their
client, mortgagees and third parties who may rely upon their