valuer-general victoria and municipal group of valuers web viewvaluer-general victoria and municipal...

Victorian Statutory Revaluation

Valuer-General Victoria and Municipal Group of Valuers

General Provisions for Specialist Guidelines

Introduction

This document is to be used when valuing specialist properties in accordance with the Valuation of Land Act 1960 (VLA) for rating and taxation purposes.

These provisions provide definitions, general requirements, legislation and procedures and should be read in conjunction with the following specialist guidelines:

Aged Care Caravan Parks Development Land Golf courses Hotels/motels Irrigation Major Vineyards and Wineries Marinas Outdoor Advertising Signs Petrol Stations Plant and Equipment Quarries Shopping Centres Telecommunications

Definition

Site value (SV) – site value of land means the sum which the land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge, might in ordinary circumstances be expected to realise at the time of the valuation if offered for sale on such reasonable terms and conditions as a genuine seller might be expected to require, and assuming that the improvements (if any) had not been made. 1

SV is commonly known as the market value of the land only.

Capital improved value (CIV) – capital improved value means the sum which land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge, might be expected to realize at the time of valuation if offered for sale on any reasonable terms and conditions which a genuine seller might in ordinary circumstances be expected to require.2

CIV is commonly known as the total market value of the land plus buildings and other improvements.

Estimated annual value (EAV) – estimated annual value of land means the rent the land might reasonably be expected to be let for from year to year (free of all usual tenants' rates and taxes) less:

the probable annual average cost of insurance and other expenses (if any) necessary to maintain the land in a state to command that rent (but not including the cost of rates and charges under the Local Government Act 1989); and

the land tax that would be payable if that land were the only land owned (single holding basis).

In accordance with Section (2A)(1) of the VLA, in determining estimated annual value no deduction is to be made for:1 Valuation of Land Act 1960 (Vic) s 22 Ibid.

General Provisions for Specialist Properties – August 2011 of 17


(a)any provision, allowance or notional contribution to a sinking fund for the renewal or replacement of any building, fitting, fixture or other improvement on that land; or

(b) any provision or allowance or setting aside of an amount for depreciation of any building, fitting, fixture or other improvement on that land.

Net annual value (NAV) – net annual value of any land means:a) except in the case of the land described in paragraphs (b) and (c) –

i. the estimated annual value of the land; orii. five per cent of the capital improved value of the land – (whichever is the

greater); or

b) in the case of any rateable land which is –i. farm land; orii. a house, flat or unit (other than an apartment house, lodging house or

boarding house) in the exclusive occupation of the owner and used for residential purposes; or

iii. a house or unit (other than an apartment house, lodging house or boarding house) in the exclusive occupation of a tenant and used for residential purposes; or

iv. a residential unit in respect of which a residence right in a retirement village (as defined in the Retirement Villages Act 1986) exists –

five per cent of the capital improved value of the land; or

c) in the case of parklands, reserves or other land owned by the Crown or any statutory authority, occupied (other than under any lease) for pastoral purposes only-the estimated annual value of it;.3

NAV is commonly known as the current value of a property’s net annual rent i.e. gross annual rental less all outgoings – such as land tax, building insurance and maintenance costs etc., (but excluding council rates). In accordance with the VLA, NAV must be at least five per cent of the CIV.

Improvements – for the purpose of ascertaining the site value of land, means all work actually done or material used on and for the benefit of the land, but in so far only as the effect of the work done or material used increases the value of the land and the benefit is unexhausted at the time of the valuation, but, except as provided in subsection (2AA), does not include –

a) work done or material used for the benefit of the land by the Crown or by any statutory public body; or

b) improvements comprising –i. the removal or destruction of vegetation or the removal of timber, rocks,

stone or earth; orii. the draining or filling of the land or any retaining walls or other works

appurtenant to the draining or filling; oriii. the arresting or elimination of erosion or the changing or improving of any

waterway on or through the land –unless those improvements can be shown by the owner or occupier of the land to have been made by that person or at that person's expense within the fifteen years before the valuation.4

Improvements are commonly referred to as works done to the land.

Land – includes buildings and other structures permanently affixed to land, land covered with water, and any estate, interest, easement, servitude, privilege or right in or over land.5

3 Ibid.4 Ibid.5 Interpretation of Legislation Act 1984, Part IV s38General Provisions for Specialist Properties – August 2011 of 17


Levels of value – In accordance with Section 13DC of the VLA, a council must cause a valuation of all rateable within its municipal district to be made as at 1 January in every even calendar year and returned to the council before 30 June in that year.6

Regard must be had to every circumstance affecting the land at the date the valuation is returned that, were it to occur or come into existence subsequently, would be a circumstance in which, under Section 13DF(2), a supplementary valuation could be made.7

Rateable land – In accordance with Section 154 of the Local Government Act 1989 (LGA), all land is rateable except land that complies with any of the provisions specified in Section 154, subsection 2 of the LGA.8

6 Ibid. s 13DC(3)7 Ibid. s 13DC(5)8 Local Government Act 1989, s 154General Provisions for Specialist Properties – August 2011 of 17


Other definitions and industry terms

Occupancy – For the purposes of the LGA, a separate valuation is required for each separate occupancy on rateable land. Rateable land is defined in the LGA as 'any land which is rateable under Section 154'.9

Section 154 of the LGA, under the heading 'What land is rateable?' provides that all land is rateable, with the exception of those classes of land which are set out at s 154(2). The circumstances which make land non-rateable relate either to ownership or use or both.Section 13DC(1) of the VLA states:

In every valuation for the purposes of the Local Government Act 1989, each separate occupancy on rateable land must be computed at its net annual value, its capital improved value and, if required by a rating authority, its site value.

This provision makes clear that rateable land is a broader concept than occupancy. In other words, there can be several occupancies on rateable land.

The occupancy itself should be assessed, as required by Section 13DC(1) of the VLA, as if it were held for an estate in fee simple in accordance with the definitions of CIV and SV. The definition of SV and CIV in Section 2(1) of the VLA posits land in a hypothetical estate in fee simple as the subject of the valuation exercise.

In circumstances where there is a commonality of operation, use or physicality such that individual occupancies are unable to be valued as if they were held in fee simple by themselves, then the apportionment exercise of Section 2(3) of the VLA should be undertaken.

Section 2(3) of the VLA states:

If it is necessary to determine the capital improved value or site value of any rateable land in respect of which any person is liable to be rated, but which forms part of a larger property, the capital improved value and site value of each part are as nearly as practicable the sum which bears the same proportion to the capital improved value and site value of the whole property as the estimated annual value of the portion bears to the estimated annual value of the whole property.

What constitutes occupancy will largely turn on the facts of each case. However, when considering what amounts to an occupancy for the purposes of a rating exercise under the LGA and VLA, a valuer should consider whether:

there is actual occupation; that occupation is exclusive for the particular purposes of the possessor; the possession is of some value or benefit to the possessor; and the possession is not too transient.10

Estate in Fee simple – The definition of SV and CIV in Section 2(1) of the VLA refers to ‘the sum which the land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge’.

Various authorities have dealt with the issue of estate in fee simple and unencumbered including the Shell case, the South Australia Trust Company cases and most recently the decision on the Jam Factory.

9 Ibid.10 Mayor Councillors and Citizens of the City of Heidelberg v Fawcett (unreported, Supreme Court of Victoria, Crockett J, O/R8500 of 1983, 1 June 1984), page 6.General Provisions for Specialist Properties – August 2011 of 17


What is emphasised by these cases is that the estate in fee simple is the interest to be valued, it being the highest estate known to law. The definition of SV and CIV in Section 2(1) of the VLA posits land in a hypothetical estate in fee simple as the subject of the valuation exercise. The estate is hypothetical because, as the use of the conditional if demonstrates, it is deemed not to be subject to certain interests which restricts the bundle of rights which accompany the highest estate know to law, regardless of whether the actual estate in fee simple in which the land is held is subject to a lease, mortgage or other charge.

What the hypothetical purchaser is buying is the bundle of rights to the land which comprise this hypothetical fee simple estate. In short, a valuer must assess the value of a bundle of rights in a physical thing, the subject land; in the state in which it existed at the relevant date having regard to market circumstances.

Real property – Real property and personal property are two of the main terms used in English common law. Real property comprises two distinct elements, corporeal hereditaments and incorporeal hereditaments.

Highest and best use – The highest and best use principle is fundamental to deriving value of land. It is a principle of valuation procedure to value land in accordance with its highest and best use.11

It has been described in the High Court as the most advantageous purpose for which [the land] was adapted: Spencer v The Commonwealth12.

When determining value of land , the following sections of the Valuation of Land Act 1960 should be taken into account:

Section 5A (3)(a) – the use to which such land is being put at the relevant time, the highest and best use to which the land might reasonably be expected to be put at the relevant time and to any potential use;

Section 5A (3)(f) – the actual and potential capacity of the land to yield a monetary return.

Comparable sales – are market transactions (sales) that have similarity to the land to which the value is being determined.

The VLA refers to the weight to be given to the evidence of sales of other lands when determining value.

Section 5A(2) of the VLA states:

In considering the weight to be given to the evidence of sales of other lands when determining such value, regard shall be given to the time at which such sales took place, the terms of such sales, the degree of comparability of the lands in question and any other relevant circumstances.

The following, an extract from the most recent Supreme Court Decision in the Jam Factory case, refers to comparable sales.

As is implicit in the provisions of s 5A of the Act, the essence of the valuation process is the assessment of comparable sales, making adjustments to the extent necessary so that the process is one which involves, as nearly as possible, comparing “like with like”. This process was helpfully discussed by Morris J (sitting as President of VCAT) in ISPT Pty Ltd v City of Melbourne:

“ 51 It is sometimes thought that sales are either comparable or not comparable: that is, a binary paradigm should be used to classify sales. In my opinion, this is a flawed approach. Rather there will be gradations of comparability: from identical to irrelevant. As this scale of comparability approaches the irrelevant end, there will be many sales that offer so little

11 Alan Hyam The Law Affecting Valuation of Land in Australia (Federation Press, 4th Ed 2009) 18412 ISPT Pty Ltd v Melbourne City Council & Anor [2008] VSCA 180 para 40General Provisions for Specialist Properties – August 2011 of 17


assistance that they ought be disregarded. Further, there will be circumstances where there is a sale or sales that are strongly comparable; in which case there will be no need to closely analyse other sales, even though these may be comparable in some way. ... 53 The comparable size, location and condition of land must also be taken into account in a similar way. Similarly, the use to which land might be put must be considered. This exercise might produce the result that a sale is so dissimilar that it should be disregarded; or it might produce the outcome that a sale needs to be adjusted before being applied; or it might produce the outcome where a sale is given more or less weight in the exercise of a valuation judgment.”13

13 Challenger Property Asset Management Pty Ltd & Anor v Stonnington City Council & Anor [2011] VSC 184 at 8-9General Provisions for Specialist Properties – August 2011 of 17


Victorian legislation and cases applicable to rating valuations

While the whole of the Valuation of Land Act 1960 is relevant to all rating valuations, the following sections refer to some of the fundamental aspects of rating valuations

Section 2(1) – Definition of site value Section 2(1) – Definition of ‘improvements’ for the purpose of ascertaining site

value Section 2AA – Works relating to a port, Section 2(1) – Definition of net annual value Section 2(1) – Definition of capital improved value Section 2(1) – Definition of estimated annual value Section 2(2) – Estimating value of improvements in ascertaining site value Section 2(3) – Apportionment by EAV Section 3A(1) – Access to lands and buildings Section 3A (2) – Powers to apply penalties if information is not returned or

accurate or access is not given Section 5A – Determining the value of land Section 13DC– Valuations generally Section 13DF – Circumstances for supplementary valuations. Section 16– Who may object? Section 17 – Grounds for objection Section 18 & 19 – Timing provisions for objections Section 20 – Exchange of Information on certain objections Section 21 Determination of objection Section 22 – Application to review for VCAT

The following Acts are relevant to statutory valuations: Local Government Act1989 Planning and Environment Act1987 Retail Leases Act 2003 Residential Tenancies Act1997 Subdivisions Act1988 Heritage Act1995 Victorian Conservation Trust Act1972 Conservation, Forests and Lands Act1987

Court cases

Precedent, authority or legal principle, are terms relating to the ‘rule’ created by courts or tribunals that guide judges/members in subsequent cases with similar issues or facts. The rules from a higher court are mandatory precedent on a lower court within that system and must be followed.

Supreme Court decisions are binding on the Victorian Civil and Administrative Tribunal (VCAT) in cases dealing with similar issues or facts, while a VCAT decision would only be persuasive in the Supreme Court (noting that lower decisions must be considered before they are departed from). The Court of Appeal (a division of the Supreme Court) is the highest court in Victoria, while the High Court of Australia is the superior court of the country.

One variation to this is when the VCAT president, who is also Supreme Court judge, presides over a matter at VCAT it has the standing of a Supreme Court decision.

The following cases are examples of the more commonly cited historic and recent cases in relation to the general concepts of valuation principles. Each case has the catchwords sourced from the cited case where available.

Spencer v Commonwealth [1907] HCA 82General Provisions for Specialist Properties – August 2011 of 17


Resumption, not by means of a forced sale, but by voluntary bargaining between the plaintiff and the purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business transaction.14

Brewarrana Pty Ltd v Commissioner of Highways (1973) 6 SASR 541Compensation – Role of Court – Expert Witness – Comparable Sales – In globo Lands – Price per lot method – Hypothetical Subdivision method – Allowance for Interest – Profit and Risk.15

Tooheys Limited (Appeal No. 86 of 1924) v The Valuer-General (New South Wales) [1924] UKPC 113 Hotel U.V [Unimproved Value] – value of a licence must not be considered part of the U.V.16

Royal Sydney Golf Club v Federal Commissioner of Taxation [1955] HCA 13Land Tax – Land – Golf course – Golf club – Facilities and amenities – Use by members – Unimproved value of land – Valuation – Regard to provisions and effect of County of Cumberland Planning Scheme – "Vacant land" – "Built-up land" – Restrictions – "Land upon and which there are no buildings"17

Sergius Alexander Tetzner (Appeal No. 6 of 1956) v The Colonial Sugar Refining Company Limited (Fiji) [1957] UKPC 15 U.V [Unimproved Value] determined on the basis that it was without buildings or physical improvements but was in the town of Lautoka and a sugar mill was operating in the town.18

Turner v Minister of Public Instruction [1956] HCA 7Valuation – Residential allotments – Land suitable for sale in sub-division – Resumption – Principles of valuation – Risk of realisation – Valuation of Land Act 1916-1951 (N.S.W.), ss. 5, 6, 68 – Public Works Act 1912 (N.S.W.), s. 124 – Land and Valuation Court Act 1921-1940 (N.S.W.), ss. 9 (1), 17.19

The Honourable William McCulloch Gollan and another (Appeal No. 7 of 1960) v The Randwick Municipal Council (New South Wales) [1960] UKPC 32 U.V [Unimproved Value] and I.V [Improved Value] – unencumbered fee simple – difference between a public law affecting the enjoyment of land and a restriction of title – fee simple thus unencumbered.20

Shell Co of Australia Ltd and Number One Spring Street Pty Ltd v City of Melbourne [1997] 2 VR 615 LOCAL GOVERNMENT – Rating of land – Under local government legislation – City of Melbourne – Whether return necessary – Valuation made before but rate declared after 1 October 1992 – What Act applicable to such valuation – "Returned to take effect" – Act no 178 s42; s43 – Local Government Act 1958 s254; s255; s258; s262 – Local Government Act 1989 s157(1) s160 – Valuation of Land Act 1960 s2(1) & Part II Div 3A – Valuation of Land (Amendment) Act 1989 s4(1)

PROPERTY LAW – Valuation of land – Statutory values – Net annual value – Estimated annual value – Whether land tax profit on services or allowance for depreciation deductible – Premium quality office tower – "Usual tenants rates and taxes" – "Probable average annual cost of .... expenses" – Land Tax Act 1958 s6; s8(1); s42 Valuation of Land Act 1960 s2(1)

14 J.P. Petherick, Digest of Court Decisions Specially Prepared for Valuers, Australian Institute of Valuers Inc, 2nd edn, 1974 at 2615 Court Decisions for Examination Study Valuers , Australian Institute of Valuers Inc, 2nd edn, 198416 Petherick p 2817 Royal Sydney Golf Club v Federal Commissioner of Taxation [1955] HCA 13 at 118 Ibid., p 27.19 Turner v Minister of Public Instruction [1956] HCA 7 at 120 Ibid., p 13.General Provisions for Specialist Properties – August 2011 of 17


PROPERTY LAW – Valuation of land – Statutory values – Capital improved value – "Unencumbered by any lease" – Valuation of Land Act 1960 s2(1)21

101 Collins Street v City of Melbourne (1995) 87 LGERA 207PROPERTY LAW – Valuation of land – For rating purposes – Misapprehension by judge of valuer's evidence – Whether finding made once misapprehension corrected open on evidence as a whole – Question of law – Valuation of Land Act 1960, s47(4)22

Maurici v Chief Commissioner of State Revenue [2003] HCA 8Land tax - Valuation of land – Improved residential property in Sydney – Assessment of unimproved value of land – Whether s 6A(1) Valuation of Land Act 1916 (NSW) includes use of improved land sales – Relevance of "scarcity" – Valuation by reference substantially or exclusively to sales of unimproved land invalid.23

Murdesk Investments v Roads Corporation [2006] VSC 363Compensation for compulsory acquisition of part of land – Before and after value – Pointe Gourde principle – Hypothetical zoning – Hypothetical availability of services – Highest and best use – Comparable sales – Enhancement – Severance – Expert evidence – Land Acquisition and Compensation Act 1986, ss.40, 41, 43. 24

Perpetual Trustee Company Ltd & Anor v Valuer-General, Trust Company of Australia Ltd & Anor v Valuer-General [2006] SASC 216 REAL PROPERTY – VALUATION OF LAND - STATUTORY VALUES – CAPITAL VALUEAppeal against assessment by Valuer-General of the capital value of land – definition of "capital value" – meaning of "unencumbered" – whether allowance must be made for a let-up period in determining "capital value".

ISPT Pty Ltd v Melbourne City Council & Anor [2008] VSCA 180VALUATION OF LAND – Application for leave to appeal decision of Victorian Civil and Administrative Tribunal – Role of the Tribunal – Whether expert tribunal – Whether Tribunal pieced together own valuation.VALUATION OF LAND – Highest and best use – Whether single precise use or combination of uses.VALUATION OF LAND – Comparable sales – Improved and unimproved sales – Vacant land sales – Weight to be given to valuer’s evidence. 25

Challenger Property Asset Management Pty Ltd & Anor v Stonnington City Council & Anor [2011] VSC 184VALUATION OF LAND – Meaning of “site value” – Meaning of “capital improved value” and whether “vacant to let” deduction required – “highest and best use” – Falconer principle – sales of other properties and their relevance as comparable sales or on other bases – Valuation of Land Act 1960 (Vic).

REAL PROPERTY – Meaning of fee simple in possession – “Whether lease an encumbrance”.26

21 Shell Co of Australia Ltd and Number One Spring Street Pty Ltd v City of Melbourne [1997] 2 VR 615 at 122 101 Collins Street v City of Melbourne (1995) 87 LGERA 207 at 123 Maurici v Chief Commissioner of State Revenue [2003] HCA 8 at 124 Murdesk Investments v Roads Corporation [2006] VSC 363 at 1

25 ISPT Pty Ltd v Melbourne City Council & Anor [2008] VSCA 180 at 126 Challenger Property Asset Management Pty Ltd & Anor v Stonnington City Council & Anor [2011] VSC 184 at 1



Property inspection

The following procedure and considerations are recommended when inspecting the property and discussing with the owner/agent.

1. Verbal introduction: Introduce yourself as a valuer and ascertain the contact details of the

owner-agent. Provide a brief explanation of the revaluation process (SV, CIV, NAV and

EAV) and forthcoming rental questionnaire. Offer a brief explanation of the relevant sections of the Valuation of Land

Act 1960, such as:o site improvements, apportionment of total CIV, for example if

there are multiple dwellings-occupancies on the property; o powers under the VLA that allow access to land and buildings,

inspection of books and documents and answering of questions written or verbally;

o penalties applicable if information is not provided or wilful omission or falsifying of information;

o that privacy legislation does not apply to requests made under the Valuation of Land Act 1960 when directed to companies or government, it only becomes an issue when directed to private individuals.

.2. Investigate documents to be sighted, if applicable:

Certificate of Title including plan of area. Lease(s) Schedule of outgoings Lease(s) – area plan 173 Agreements Planning permits Building plans Environmental audit reports Any documents referring to any restrictions to the use or further

development of the property.

3. Site attributes: Confirm land area, Determine title boundaries and number of parcels (if applicable) Access and frontage to property Orientation and topography Soil types (if relevant) and/or soil contamination issues Any climatic conditions that may affect the property (e.g. rainfall, frost etc)

4. Inspect and investigate what improvements are associated with the property.

The inspection of improvements on the property such as houses, other buildings, sheds, plant, equipment, crops and plantations etc need to include ascertaining the condition, renovations and suitability of the building(s).

5. Clarify any data if required with manager/owner.



Covering letter and rental questionnaire

Covering letter

State Government legislation requires Victorian councils to revalue all rateable properties within their respective municipal boundaries once every two years.

The relevant date for the next revaluation is 1 January 2012. Council will use the new values for rating purposes for the 2012–2013 and 2013–2014 financial years.

Each time a revaluation occurs, owners, managing agents and occupiers of commercial and industrial properties are required to provide information to their councils (and/or their representatives) that will help produce an accurate valuation for every property.

Section 3A of the Valuation of Land Act 1960 requires and provides that: (a) a valuer may enter at all reasonable hours in the daytime upon any land building

or premises;(b) a valuer may put either verbally or in writing any relevant questions to enable the

making of a true and correct valuation;(c) a valuer may inspect any books or documents and papers for the purpose of such

valuation and without charge take extracts there from;(d) council (and their representatives) must treat the information as confidential;(e) a penalty not exceeding two penalty units per assessment applies for failure to

allow such entry or inspection, refusal or wilful omission in answering questions or providing information or falsifying any information provided.

Under the legislation the valuer is required to assess the annual rental on a year-to-year basis. In accordance with that requirement the attached rental questionnaire is to be filled in and returned to council by the [xx date].

While it is preferred that documentation be returned in an electronic format, a hard copy is acceptable. Centre tenancy schedules may provide a substantial component of the information required.

If you have any questions please do not hesitate to contact council’s valuer [insert details of valuer].



[Municipality] General Valuation 2012 Rental Questionnaire

Property address: [ ] Assessment number: [ ]

This request is made in accordance with Section 3A of the Valuation of Land Act 1960, which requires all information received to be treated as strictly confidential and used only for valuation purposes.

1. Occupancy detailsName of occupant/tenant:

Trading name of business:

Use of premise (i.e. shop, office, workshop):

Name of managing agent (if any):

Is the property currently: Leased If leased, please complete Sections, 2, 3, 4 and 5.

Vacant If vacant, date vacated ____/____/_____

Owner occupied

If vacant or owner occupied, go to Section 5.

Are any parts of the property occupied by separate tenants? Yes No

If yes, please complete a separate questionnaire form for each tenancy. If additional forms are required, please

contact, [valuer /contract valuer] on [phone no].

2. Land detailsLand area – Council’s records indicate that the total site area is :

Is the land area correct? Yes No (If No) specify correct land area ___________________________

Site works – please provide details of site works (including actual costs of works and date of completion of works) for the last 15 years (by line item): __________________________________________

______________________________________________________________________________

______________________________________ Other land details: Is there anything else considered to impact on the value of the site, such as disallowance of planning permits, covenants, specific requirements relating to development permits etc? _______________________________________________________________________________________

3. Property detailsConstruction material: Brick Concrete Steel Other __________________________

Year built: ____________ Year(s) extended: _____________

Building area occupied:

Description e.g. warehouse Square metres e.g. 500


Net lettable area, or Gross building area


General comments (any additional information you believe may affect the value of the property):

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

4. Lease detailsLease commencement date: ____/____/_____

Initial term: _______________ Lease options: ________________

Current rental: $______________ Per week Inclusive GST

Per calendar month Exclusive GST

Annual

Percentage rent: if applicable (please provide respective thresholds and actual/estimated turnover details to calculate percentage rent component) ____________________________________________

Base rental $______________ Per week Inclusive GST


Annual

Actual recovery $______________ Per week Inclusive GST


Annual

Date last reviewed: ____/____/_____

Frequency of rent review: _______________ (e.g. annual, two yearly)

Method of rent review: CPI To market

Fixed _______% Pre-determined $___________

Other___________

Onsite car parking: Is additional rent paid for car parks? Yes No

If yes, number of car parks: ___________

Current monthly rent: ___________

Incentives (any incentives/special lease conditions e.g. rent-free period, free fit-out etc.):

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________



Other details considered relevant – (please include all other details that you believe may affect the statutory values of the property(s) :

__________________________________________________________________________________________

__________________________________________________________________________________________

__________________________________________________________________________________________

5. OutgoingsWho is responsible for paying the following outgoings:

Amount Amount

Council rates: Tenant $ _______ Owner $ _______

Water rates: Tenant $ _______ Owner $ _______

Land tax: Tenant $ _______ Owner $ _______

Building insurance: Tenant $ _______ Owner $ _______

Repairs: Tenant $ _______ Owner $ _______

Scheduled maintenance: Tenant $ _______ Owner $ _______

Owners corporation fees: Tenant $ _______ Owner $ _______

Other: Tenant $ _______ Owner $ _______

If other applies, please describe:

__________________________________________________________

6. DeclarationI hereby declare that all information provided is true and correct.

Name (please PRINT): ______________________ I am the Tenant Owner Managing agent

Signature: ______________________ Date: ___________ Phone: ___________

Please return form by post in the reply paid envelope provided; by facsimile to [Valuer/contract valuer’s fax number]; or by email to [Valuer/contract valuer’s email].



Methodology

Site value methodology

Subsection 2(1) in the VLA sets out the definition of site value and the main considerations are:

estate in fee simple unencumbered by any lease, mortgage or other charge reasonable terms and conditions a vendor might expect; and assuming the improvement (if any) had not been made.

Tetzner’s case and more recently the Maurici case(s) have confirmed that the valuer should consider all surrounding improvements to the land such as roads, services and infrastructure, but excludes the value of improvements on the land (as defined in the VLA).

The usual factors in assessing site value such as land area, frontage, topography, shape, location, accessibility, exposure, proximity to public transport and amenities etc. should be taken into consideration.

Highest and best use

The site value of a parcel with or without a planning permit should be assessed having regard to highest and best use. The valuer should consider the:

current use assuming a permit would be granted, the potential use given the underlying zoning of the land.

Highest and best use refers to the potential use in general terms and is based on the likely permitted use(s) under the existing planning scheme provisions.

The market value based on the highest and best use should be determined from sales of similar zoned land with similar development potential.

Site improvements

Site improvements as defined under Section 2 (b) of the VLA are improvements included in the site value unless those improvements can be shown by the owner or occupier of the land to have been made by the person or at that persons expense within fifteen years before the valuation.

If these improvements have been carried out within the 15 years the valuer must ascertain the added value of these works (if any) and assume they have not been made.

Apportionment

If the site value or capital improved value for individual occupancies is required to be apportioned then this should be undertaken in accordance with Section 2(3) of the VLA. (Refer to ‘Occupancy’ definition on page 3).

Surplus land

Surplus undeveloped land is considered a separate occupancy and can be valued as a separate rateable assessment, even when a separate title does not exist. Each parcel must be assessed as an estate in fee simple. Refer to definition of Occupancy.

The valuer is required to determine what is surplus land by having regard to whether: the land is not required to be occupied under the existing use and/or is set aside for future redevelopment.



Sales analysis

When carrying out a sales analysis the following need to be considered:

verify the sale price and establish the terms and conditions of sale;

verify if the sale price is inclusive or exclusive of GST. The agent and/or solicitor are the points of contact to determine this information;

determine if the sale is an ‘arms length’ transaction and in accordance with the principles outlined in Spencer v Commonwealth;

the valuer should ascertain if stock, plant and equipment and/or business/goodwill component is included in the sale price, i.e. “walk in, walk out” price or “bare” price;

ensure that the sale price is analysed to a cash equivalent under ordinary circumstances;

sales need to be analysed to a common unit of comparison having regard to the property type;

sales on a “walk in, walk out” basis should be scrutinised as the apportionment of the sale price for each component may be negotiated by each party based on their specific financial circumstances rather than any indication of market value;

if it is established that the sale is of a leasehold interest the valuer will need to establish the lease terms and identify the sale as a partial interest.



Industry and additional information

Valuation Best Practice Guidelines

The Valuation Best Practice Specifications Guidelines (VBP guidelines) assist councils to prepare documents for biennial revaluations. The VBP guidelines provide templates and information for councils to:

o prepare a contract for valuation and related services; o manage the contract; o improve the quality of valuations and property databases; and o better define the relationship between council, the valuer and Valuer-General

Victoria.

The VBP guidelines are updated for each revaluation based on feedback from councils and contract valuers.

Australian Property Institute (API) standards

The valuation profession in Victoria operates according to a code of conduct for valuers published by the API. This code is based upon the code of ethics, rules of conduct, concepts, principles and definitions, practice standards, guidance notes etc..

Australian Valuation Property Classification Codes

The Australian Valuation Property Classification Codes (AVPCC) assist valuers providing rating authority and government asset valuations.

The codes, originally approved by the national meeting of Valuers-General in March 2007, were updated in January 2009. The codes are being used by Victoria for the 2012 council revaluation.


http://www.dse.vic.gov.au/property-titles-and-maps/valuation-home-page/the-valuation-profession/resources-for-valuers/valuation-property-classification-codes

http://www.dse.vic.gov.au/DSE/nrenptm.nsf/LinkView/6A10C3DB5D334039CA25750C0004D343400E19387637ECA8CA2575160014C713

valuer-general victoria and municipal group of valuers web viewvaluer-general victoria and municipal...

Documents