After the rains: water’s impact for valuation practices

Abstract

Purpose – The purpose of this paper is to reduce the potential for litigation by improving valuers’ awareness of water risks. As part of a valuer’s due diligence, the paper provides guidance as to how to identify such risks by explaining the different types and examining how online search tools can be used in conjunction with more traditional methods to evaluate the probability of these risks occurring. Design/methodology/approach – The paper builds on prior research, which examined the impact of water to and for valuations. By means of legal/doctrinal analysis, this paper considers relevant issues from the perspective of managing client expectations and needs. In so doing it identifies online tools available to assist in identifying at risk properties and better informing clients. Findings – While the internet provides a variety of tools to gain access to relevant information, this information most commonly is only provided subject to disclaimer. Valuers need to ensure that blind reliance is not given to use of these tools but that the tools are used in conjunction with individual property inspections. Research limitations/implications – Although the examples considered primarily are Australian, increasing water risks generally make the issues considered relevant for any jurisdiction. The research will be of particular interests to practitioners in coastal or riverine areas. Practical implications – Valuation reports are sought for a variety of purposes from a variety of clients. These range from the experienced, knowledgeable developer looking to maximise available equity to the inexperienced, uneducated individual looking to acquire their home and thinking more often than not with their heart not their head. More informed practices by valuers will lead to valuation reports being more easily understood by clients, thus lessening the likelihood of litigation against the valuer for negligence. Originality/value – The paper highlights the issue of water risks; the need for valuers to properly address potential and actual risks in their reports; and the corresponding need to undertake all appropriate searches and enquiries of the property to be valued. It reinforces the importance of access to the internet as a tool in the valuation process.

A methodology for identifying critical factors influencing land value in urban areas: a case study of Kerala, India

“…The second variable selected from this subcategory is “waterlogging possibilities of the plot” and is ranked 12 with RII value of 0.89. The properties situated in flood plains and other sensitive areas having a higher possibility of floods reduce its market value (Cradduck, 2016; Hirsch and Hahn, 2018). The third variable selected from this group is “surface type and condition of access road” ranked 22 with an RII value of 0.86.…”

“…Results indicate that the most crucial parameter in this subcategory is the disaster history, which can easily alter the fortunes of property owners. There is a consensus among researchers that the property price will fall if the location has a disaster-prone history (Cradduck, 2016; Staupe-Delgado and Kruke, 2017; Hirsch and Hahn, 2018; Shr and Zipp, 2019; Singh, 2019). The RII ranking analysis selected one variable from the list of seven variables in the subcategory “topographic parameters.” The surveyed professionals ranked “history of floods, landslides and other disasters” as the most significant factor in this subcategory with an RII value and rank of 0.94 and 5, respectively.…”

Goodwill hunting

“…These, where they exist, usually impact saleability and value positively. Matters that may adversely impact saleability and value include proximity to power lines (Jackson and Pitts, 2010; Elliott and Wadley, 2002), or wind farms (Sunak and Madelener, 2016) and/or natural disasters such as flooding (Cradduck, 2016). As will be considered below, negative effect is also experienced where there exists a dispute between neighbours.…”

A Conceptual Framework of Determining the Property Value Using Economic Valuation Method Towards Floods Disaster

“…The issues for the professional valuer is how to correctly identify the impact of flood and how to include these into valuation report [10]. The literature indicates the difficulties in assessing flood damages because of the lack of knowledge amongst valuer [25].…”

“…During the inspection and preparing the valuation report, the valuer need to have the information regarding the flood events in the early stage as Figure 3. Handling the valuation task related to flood is more challenging to the valuer in determining the water risks and address the potential and actual risks in the valuation report [10].…”