Basics of Valuation and Eligibility to be a Real Estate Valuer

1. REAL ESTATE VALUATION –
A DIVERSIFIED CIVIL
ENGINEERING FIELD
GEET P. SHAH
B.E. Civil, M.Sc. (Real Estate Valuation),
C.E., A.M.I.E., A.M.I.V., F.G.I.C.E.A.
(M. No.)- +8141407055
(Email Id)- geetushah15@gmail.com
1

2. What is Valuation?
• Valuation is the determination of monetary value
at some specific date, of the property rights
encompassed in an ownership.
• Property rights means the exclusive right to
possess, enjoy & dispose.
• Valuation requires application of logical principles
and tested methods leading to estimate of value
under given circumstances. In short, valuation is
both science as well as art.
2

3. How to be a Valuer?
• A person can become a Govt. Regd. Valuer by
Two Ways:
1)By applying through Wealth Tax Act under
Rule 34-AB (Old) to Commissioner of Income
Tax
2)By applying through Companies Act 2013
under IBBI through Companies (Registered
Valuers And Valuation) Rules, 2017 (New)
3

4. Eligibility, Qualification & Experience
required under Wealth Tax Act
• Graduate in civil engineering, architecture or town planning of
a recognized university; or
• be a post-graduate in valuation of real estate from a
recognized university; or
• possess a qualification recognized by the Central Government
for recruitment to superior services or posts under the Central
Government in the field of civil engineering, architecture or
town planning;
(A) he must be a person formerly employed - in a post under
Government as a gazetted officer; or in a post under any other
employer carrying a remuneration of not less than Rs. 2,000
per month, and, in either case, must have retired or resigned
from such employment after having rendered service for not
less than 10 years as a valuer, architect or town planner, or in
the field of construction of buildings, designing of structures,
or development of land; or
4

5. Eligibility, Qualification & Experience
required under Wealth Tax Act
• as a professor, reader or lecturer in a university,
college or any other institution preparing students
for a degree in civil engineering, architecture or town
planning, or for any qualification referred to above
and must have retired or resigned from such
employment after having taught for not less than 10
years any of the subjects of valuation, quantity
surveying, building construction, architecture, or
town planning;
5

6. Eligibility, Qualification & Experience
required under Wealth Tax Act
B) he must have been in practice as a consulting engineer,
valuer of real estate, surveyor or architect for a period of
not less than ten years ( in case he possesses a post
graduate in valuation of real estate from a recognized
University - Two Years) and must have acquired
experience in any of the following four fields :-
• valuation of buildings and urban lands; or
• quantity surveying in building construction; or
• architectural or structural designing of buildings or town
planning; or
• construction of buildings or development of land
6

7. Eligibility, Qualification & Experience
required under Companies Act
• Eligibility. (1) No individual shall be eligible to be a registered
valuer if he- (a) has not passed the Valuation Examination in
the three years preceding the date of making an application
under Rule 7 (b) does not have the qualification and
experience specified in Rule 6 of Companies Act; (c) is a
minor; (d) has been declared to be of unsound mind; (e) is an
undercharged bankrupt, or has applied to be adjudicated as
an bankrupt; (f) is a person not resident in India; (g) has been
convicted by any competent court for an offence punishable
with imprisonment for a term exceeding six months or for an
offence involving moral turpitude, and a period of five years
has not elapsed from the date of expiry of the sentence; (h) is
not a valuer member of a valuation professional organization;
or (i) is not a fit and proper person:
7

8. Eligibility, Qualification & Experience
required under Companies Act
• An individual shall have the following qualifications to
be eligible for registration under Rule 5 of Companies
Act 2013
• (i) post-graduate degree, in the specified discipline,
from a University established, recognized or
incorporated by law in India and at least three years of
experience in the discipline thereafter; or
• (ii) a Bachelor’s degree, in the specified discipline, from
a university established, recognized or incorporated by
law in India and at least five years of experience in the
discipline thereafter; or
• (iii) membership of a professional institute set up
under an Act of Parliament and at least five years’
experience after such membership.
8

9. Registration as a Valuer under IBBI
through Companies Act
• After clearing all qualification & experience
mentioned above, one has to give a valuation
examination conducted by IBBI of 100 Marks
(Negative Marking Examination) after getting
50 Hours training by any Registered Valuation
Organization (RVO)
• After clearing Examination by 60 Marks, one
can be given a license of Government
Registered Valuer.
9

10. Work Activities related to Valuation in
Professional Life (Purposes of Valution)
 Sale or Purchase of the property by an
Individual, Trust or Company.
 Land Acquisition.
 Bank Loan / Mortgage / Security
 Liquidation / Insolvency / Auction
 Under Wealth Tax Act (Now Inactive)
 Under Income Tax Act (Capital Gain Tax)
 Stamp Duty Purpose
 Insurance Purpose
10

11. Work Activities related to Valuation in
Professional Life (Purposes of Valution)
Under Town Planning Act (Compensation and
Valuation of O.P & F.P.)
Litigation over property rights
Under Companies Act
Acquisition / Mergers / Amalgamations of
Companies
Lease / Rent / License Purpose of Properties
Family Partition
Visa
11

12. Who is a Valuer?
• Valuer has been defined as “ an individual,
group of individuals, or a firm possessing the
necessary quality, ability and experience to
undertake valuation in an objective, unbiased
and competent manner.”
• In some jurisdictions, licensing of valuer is
required before one can become a valuer.
12

13. Role of a Valuer
• Analyzing all the Factors and estimate value of
the property for a given purpose.
• The role of Valuer is “VALUE ESTIMATION” &
not “COST ESTIMATION”.
• Three Vital Questions to be asked by Valuer:
1. Value for Whom?
2. Value for what Purpose?
3. Value as on which Date?
13

14. Four Pillars of Value
• Utility
• Scarcity
• Demand
• Marketability / Transferability
14

15. 15

16. Factors affecting the Values
• Economic Factors
• Legal Factors
• Physical / Technical Factors
• Social / Socio-Economy Factors
16

17. 17

18. Procedure to follow for valuation:
1. Identification of the property.
2. Identification of the interest in real property.
3. Purpose of valuation.
4. Definition of the value to be estimated.
5. Referring Legal documents
6. Site Inspection
7. Data collection (Physical, Technical, Legal, Economic &
Social)
8. Valuation Approaches & Methods to be adopted.
9. Reconciliation
10. Final Estimate of Value
18

19. Future Outlook of Valuation Profession
• As on Today, Good & Experienced Real Estate
Valuers are few in numbers.
• Considering Economic Growth of India, in
future real estate valuer demand is going to
increase.
• Looking to NPA’s in Banking and NBFC Sector,
Experienced Valuers are strongly needed.
• Due to Infrastructure, Startups & Public Sector
Projects, role of valuer is going to be very
important.
19

20. Multi National Companies for
Valuation Sector
• Ernst & Young
• Price Waterhouse Coopers (PWC)
• Klynveld Peat Marwick Goerdeler (KPMG)
• Cushman & Wakefield
• Duff & Phelps
• Knight Frank
• CBRE South Asia Pvt. Ltd.
• Jones Lang LaSalle (JLL) …..etc
20

21. THANKING YOU
By: Bakul N. Desai
21
GEET P. SHAH
B.E. Civil, M.Sc. (Real Estate Valuation),
C.E., A.M.I.E., A.M.I.V., F.G.I.C.E.A.
(M. No.)- +8141407055
(Email Id)- geetushah15@gmail.com