valuer may be called upon to value progress payments payable to the
builder during the course of construction of the building. This is
because standard form building contracts require the payment of the
VALUE of work completed, not cost. Therefore, if progress payments
are determined by quantity surveyors or architects, they are in
breach of the valuers' licensing legislation.
current practice of paying the cost of work done instead of value
leaves the practitioner open to a professional negligence claim as
the value of a partly completed building is usually less than cost,
even if the building represents the highest and best use of the land.
If the building does not represent highest and best use, the
estimator using cost, leaves him/herself even more vulnerable to a
claim for professional negligence.
amount payable should be determined using the before and after method
of valuation of the building being constructed so that the difference
is the progress payment due. Materials delivered to the site pending
fitting and installation are not included in the progress payment as
they are not part of the building. That is, they are not fixtures.
The valuer's final certificate of payment is withheld until all
relevant authorities, and experts have issued certificates of
compliance and completion.
There are a number of methods by which a
builder can claim payment for work completed. With progress payments
the builder claims for the value of work completed. If the valuer
agrees he/she will issue a progress certificate certifying to the
client how much in his opinion should be paid. If the two amounts
reconcile the client pays the builder directly. Progress payments can
be paid either monthly, at definite stages of construction, or at
other intervals depending upon the terms of the building contract.
following is a typical breakup of progress payments for a single