Need to know the market value of your property?

Property Valuation can be defined as the art or science of estimating the monetary worth of an interest in a particular property, for a specific purpose, at a given place and a particular moment in time.

Property Valuation is important because it helps in the following cases:

• to buy so that you do not pay more than you should;
• to sell so that you can set an optimal price and be clear on the lease amount that you should take;
• to let or take a lease or agree on a rent review;
• to assess tax or rates payable;
• for insurance;
• to obtain compensation for compulsory acquisition;
• to borrow money using the property as ‘security;
• to show the value of the property as a fixed asset on a company balance sheet;
• to develop or redevelop;
• Litigations e.g. compulsory acquisition proceeding, property divisions, environmental litigation;
• Financing and credit e.g. mortgage;
• Investment counseling and decision making;

Property valuation can only be undertaken by a valuer who is registered and licensed by Valuers Registration Board (VRB).

The cost of property valuation is guided by the Valuers Act cap 532 which describes the Valuers Scale of Fees.

It indicates as follows:

Urban rating and agriculture:

First Kshs. 2,000,000 at 1.0 per cent. Residue at 0.25 percent.

Compulsory acquisition:

First Kshs. 2,000,000 at 2.0 per cent. Residue at 0.5 percent

Rental:

First Kshs. 400,000 at 10 percent. Residue at 5 percent.

Plant, machinery, and automobile:

Fist Kshs. 5,000,000 at 1.5 per cent. Residue at 0.5 percent.

Furniture, fittings, equipment, trading `stock, and going concerns:

First Kshs. 1,000,000 at 5.0 per cent. Residue at 2.5 percent

Minimum valuation fees.•.

15,000 for any valuation.

Consultancy:

A minimum of Kshs. 5,000 per hour where such consultancy does not involve carrying out a valuation and compilation of a valuation report or advising on the value of the property.

Traveling expenses and disbursements:

These shall be based on the costs incurred in undertaking the valuation.

Yes, if the client is convinced that the property valuation does not reflect the actual market value, they are entitled to contest the valuation.

The process involves:

• receiving and confirming instructions from the client;
• obtaining all relevant documents i.e. search and map
• inspecting the property;
• researching and analyzing all relevant market information and comparables;
• carrying out all calculations to arrive at a valuation;

reporting the results of the research and providing the valuation and report;