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RICS Introduces Mandatory Rotation Rules for UK Valuation Professionals


RICS Introduces Mandatory Rotation Rules for UK Valuation Professionals

The Royal Institution of Chartered Surveyors (RICS) is set to bring significant changes to the UK's valuation profession with its updated UK supplement to the 'Red Book,' a global regulatory document governing the valuation industry. This revision addresses recommendations from the Independent Review of Real Estate Investment Valuations, published in January 2022, and introduces mandatory rotation rules for regulated purpose valuations, among other measures.


According to an article by Property Industry Eye, one of the major changes includes the implementation of time-limited, mandatory rotation cycles for regulated purpose valuations. This means that valuation firms will not be allowed to value an asset for regulated purposes for more than ten consecutive years, requiring a change or "rotation" to a different valuation firm. These changes aim to enhance transparency and serve the public interest by preventing conflicts of interest in the commissioning and receiving of valuation reports.


The updates were developed by RICS' Valuation Review Implementation Committee (VRIC) and its Knowledge and Practice Committee (KPC) following two rounds of consultations with stakeholders involved in valuations. The amended standards have been approved by the Standards and Regulation Board (SRB).


To provide firms and clients with adequate time to adapt to these changes, RICS has established a transition period for the implementation of the rotation requirements. These new regulations will officially come into effect on May 1, 2024, and RICS plans to conduct a series of briefings and an online webinar on November 6, 2023, to help the industry understand the requirements better.


Recognising the need for a tailored approach for valuations related to public sector investment properties, RICS will commission a workstream to monitor their implementation and work closely with key public sector stakeholders to ensure practicality and the public interest are at the forefront of its implementation.


Martin Samworth, RICS Board Chair, commented on this update, stating, "This update is a logical evolution for valuation practice. The new provisions on rotation are aligned with other similar requirements for audit. The amendment will help to enhance the integrity, transparency, and robustness of all valuations conducted in accordance with the RICS Red Book provisions, underpinning it as the global valuation standard. These changes are also appropriate for the continued good governance of our profession."


Nigel Clarke, Interim Chair of the RICS Standards and Regulation Board, added, "RICS is proud to lead on the regulation of the built environment, and these innovative changes to our standards serve the public good and will grow confidence in the sector. They will increase the trust clients have in the standards of the UK’s valuation profession, which sits among the most respected in the world."


These changes represent a significant step toward ensuring greater transparency and trust in the valuation profession while aligning with global standards, ultimately benefiting both industry professionals and the public interest.




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