IDENTIFIERS

FORMAL (PRIMARY)

The formal identifiers are the legal description.

LEGAL AND CADASTRAL DESCRIPTION

The legal identifiers or legal description are the identifiers found on the Certificate of Title (CT). The information can be found by searching at the Land Titles Office (LTO). For example, a computer folio search or using secondary evidence such as a rate or land tax notice. The legal description consists of:

AREA

Statements of area should also be qualified as being approximate. For urban sites the area is expressed in square metres and for rural properties; in hectares (1 hectare =10 000 square metres). Do not use square feet, acres or squares as metric units have replaced them.

TITLE REFERENCE

The Torrens title identifier traditionally used by the Land Titles Office is the Volume and Folio number whereas that used under old system title is the Book and Number. Now use the lot/dp numbers. For example, lot49 of dp753228.

TYPE OF TENURE

The type of tenure should be stated. For example, Torrens, old system or a crown title. In the ACT, the tenure is usually stated as "Crown Leasehold" and the number of years left in the Crown Lease shown.

The Certificate of Title will reveal any registered encumbrance on the land. The two most important encumbrances (as they have a major impact on value) are easements and covenants. Some crown easements may not be registered for example, statutory drainage and sewerage easements by the water authority. However, they can usually be discovered on site by looking for inspection covers.

REGISTERED INTERESTS

The most important registered interest is a commercial lease. The Certificate may refer to a document number if the lease is lodged with the Land Titles Office and this will allow the valuer to search and find details of the lease. All data contained on the Certificate of Title or in lodged documents are public domain, so that information, which the parties to the agreement may wish to remain confidential, can be discovered. However, the valuer cannot release such data to a third party under the Privacy Act.

Short term residential leases are not usually registered on the title.

OTHER INFORMATION AT THE LAND TITLES OFFICE (LTO)

With the advent of database programs to establish Land Information Systems (LIS), a computer title search will also reveal other relevant information for example, a heritage listing or road widening affection. In NSW a s149 Certificate will reveal almost all the controls and restrictions on the site that affect value.

See example of a deposited plan

REGISTERED PLAN

The LTO will have a registered plan of the site or the plan on the Certificate of Title can be used instead. The plan will provide the following useful information:


The ACT has a very good system of Block and Section maps issued by ACTPLA. These show all released blocks and sections for each division (suburb). There is no need to search for a Deposited Plan as is the case in NSW.

On inspection physical features should be noted such as reserves or other local landmarks that can enable a more accurate and possible field identification of the location of the property. These are particularly important in new subdivisions where there are few ground or street markers available.

Upon inspection it may be found that the property is occupied. The valuer must ascertain the status of the occupants if an unqualified market value is required. If the client requires a valuation "subject to vacant possession" then it is not necessary to pursue the status of a tenancy. However, the rental being paid may be a useful indicator of value.

When a client provides information on the status of a tenancy and the valuer in the valuation report uses that information, it should be stated that the valuation has been determined on the information supplied. It is often a good idea to include a copy of the letter containing the information in the report.

This also applies to information supplied by authorities about the subject property. The most important is the certificate supplied by the local council concerning the zoning and other government controls and information on the property. In NSW the information is "certified" by the council under s149 of the Local Government Act and therefore, it can be safely used to value the property. Again a copy of the s149 certificate should be included in the valuation report.

Information provided verbally should be stated as such in the report which should also have a disclaimer to the effect that if the information supplied is shown to be wrong the valuer has the right to change the valuation. Often sales are used that have not yet been recorded by the relevant authorities. These should be noted as "reported".

Other information may be general public information and controls by way of legislation. A copy of the relevant parts of such controls should be included in the report.

Most of the above information is primary data and can be used with confidence by the valuer.

CONDUCT INSPECTION OF THE PROPERTY

The valuer should obtain legitimate access to the property to enable a physical inspection in accordance with industry standards and assignment requirements. This is usually by permission of the owner if the property is owner occupied or vacant. If the property is subject to a tenancy then the physical inspection is at the convenience of the tenant as he/she has the right of quiet enjoyment. It is usually left to the owner or property manager to arrange a suitable inspection time with the. tenant. On no account should the valuer inspect on his own volition as this may jeopardize the status of the tenancy.

The physical identification of the property is usually by way of address but should be checked against known features from the plan or map. For example, if it is a corner site. Very occasionally the address is incorrect.

Measurements, notes, and verifications of the physical aspects of the land, buildings, plant and equipment, and/or improvements are in accordance with the local authority's and government's requirements, regulations, and the relevant industry standards.

PLANS

A plan is an accurate and formal document usually prepared by a surveyor or survey draftsman. If plans are available of the house they should be incorporated in the report and thus making it easier to measure the building or the site.

SKETCH

A sketch on the other hand is an informal plan of the building, site or land and is the diagram most used by valuers.

It is not necessary for the valuer to make the sketch as accurate as that for a plan prepared by a surveyor. For example, approximate areas only are required for the valuation of a house. An informal sketch of a site or land is sometimes called a "mud sketch". All urban valuations should include at least site and building plans at a suitable scale to fit on an A4 page. A house sketch should be at a scale of about 1:100.

Scale 1:100.

LOCALITY SKETCH (MAP)

A locality sketch or map is most useful to aid the broader definition of locality and can be used to show the location of macrofactors such as a nearby shopping centre. The locality sketch is most useful for finding rural properties. The number of small scale maps and sketches used to locate the property will depend on the needs of the client. For example, an overseas client will require a map showing where the subject city or town is in Australia.

Typical locality map requirements are as follows:

OVERSEAS CLIENT AUSTRALIAN CLIENT
Location of country
Location of state
Location of city or town Location of city or town
Location of suburb Location of suburb
Location in street Location in street
Site plan Site plan


The scale of the site plan will vary according to the size of the subject property however, the scale for a typical suburban site plan is 1:500 or 1:1000. If a scale plan is reduced or enlarged on a photocopier so that the new scale is not known, a note to that effect should be shown on the altered plan and the old scale deleted.

The valuer should also identify the buildings within the boundaries looking particularly for signs of encroachment. Is there appears to be encroachment from either side, the valuer should make his/her report subject to a satisfactory identification survey report.

See extent of inspection

RECORD AND FILE OBSERVATIONS AND OTHER INFORMATION OBTAINED THROUGH INSPECTION

The proper taking, keeping and storage of field notes is most important particularly if litigation should occur over the valuation. The courts and opposing counsel are only concerned with your field notes. Each valuer has his/her own particular field note system but a typical system records the identifiers, physical description and an inventory of inclusions on one side and the building sketch on the reverse side.

Calculations and a list of sales are also often recorded on the reverse side.

It is often necessary to use codes and abbreviations to fit a reasonable description of the property on an A4 page. There are no valuation standards for abbreviations, but it is recommended that those used by real estate agents in real estate advertisements be used - see copy of standard abbreviations.

The attributes of the property are ascertained by way of physical inspection of the property but many can also be checked by other sources. This may include a previous valuation carried out by the valuer. A useful verification, if the property is on the market or has just been sold, are advertisements and sale brochures published by the agent.

An advantage of the sales brochure is that it emphasises those features that the agent and owner consider to be important and therefore, most likely by the market.

Field notes, transcripts, photographs, and other evidence (eg sale brochures or house plans) gathered through the inspection process are securely filed and retained by the valuer in accordance with his/her company's requirements and industry standards. Professional indemnity insurers and lending bodies may also have their own requirements on record keeping.

See inspections - questions

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