This Q&As is about who should conduct or insurance valuation for a VIC strata building?
Question: Who should conduct our insurance valuation in Vic: A quantity surveyor or certified practising valuer?
Answer: Quantity surveyors and certified practising valuers can perform insurance valuations. Ensure they are engaged to provide a reinstatement and replacement valuation.
Both quantity surveyors and certified practising valuers can conduct insurance valuations, and it’s important to recognise each profession’s value. The act does specify that a valuer should be used, and the industry predominantly relies on certified practising valuers for these tasks. However, some firms may employ quantity surveyors instead. It’s essential not to discount either profession, as both can competently perform the required work.
When engaging a professional for an insurance valuation, the primary focus should be on ensuring that the scope of work is clearly defined and aligned with the requirements of the Owners Corporation Act 2006 and its subsequent amendments. This means requesting a valuation specifically for reinstatement and replacement costs rather than a market value or real estate report, which could lead to confusion.
The term “valuation” can be broad, encompassing retail value, market value, construction value, and more. For insurance purposes, the correct terminology should be “reinstatement and replacement valuation.” Misunderstandings often arise because owners may expect the valuation to reflect market value, leading to discrepancies when the report focuses solely on the cost to rebuild or replace the property.
Certified practising valuers are traditionally viewed as the standard for this type of work, given their specific training and experience in property valuation. On the other hand, quantity surveyors bring a detailed understanding of construction costs, which can be equally valuable in preparing accurate insurance valuations. This is why it’s not uncommon to find both professionals involved in the industry, and many firms use a combination of both to provide comprehensive services.
To avoid confusion and ensure compliance with legislative requirements, it is recommended that owners corporations engage certified practising valuers or quantity surveyors with clear instructions on the specific type of valuation needed. This approach ensures that the valuation will meet the necessary standards and be compliant with the Owners Corporation Act.
In summary, while quantity surveyors and certified practising valuers can perform insurance valuations, the key is ensuring they are engaged to provide a reinstatement and replacement valuation. Clear communication and understanding of the scope of work are crucial to obtaining an accurate and compliant valuation report.
Rawand Kaka MBCM Strata Specialists MORDIALLOC E: info@mordialloc.mbcm.com.au P: 03 9583 1555
This post appears in the July 2024 edition of The VIC Strata Magazine.
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