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Hot Topic Highlight - Changes to the Red Book Global 2020

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What is today's blog about?

This week, we look at the new edition of RICS Valuation – Global Standards (Red Book Global). This will take effect from 31 January 2020.

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Where can I find a copy of the new Red Book Global?

You can download a copy from the RICS website.

Here, you can also download a copy of the RICS guide to the changes, together with translations, national supplements and jurisdiction guides for geographic regions relevant to your career and experience.

Why has a new edition of the Red Book Global been published?

A new edition has been published to coincide with the publication of the latest version of the International Valuation Standards (IVS).

When do the changes take effect?

The changes take effect from 31 January 2020.

What are the key changes?

The key changes reflect amendments to the latest version of IVS, as well as feedback on the application of the Red Book stemming from extensive consultation carried out by RICS during 2019.

IVS is now revised on a rolling basis, rather than being updated in separate new editions. This means that valuers need to ensure that the latest versions of both, in addition to any relevant national guidance, are used for new instructions.

The changes to each section of the Red Book Global are summarised briefly below:

  • Change to reference to Red Book Global, rather than just the Red Book.

  • Introduction – updated to refer to the latest IVS.

  • PS1 – minor amendments to 1.3 and 1.4. These clarify a written valuation as being both paper and electronic formats, including Automated Valuation Model (AVM) outputs.

  • PS2 – introduces the concept of applying professional scepticism when considering evidence. This is defined ‘an attitude that includes a questioning mind, critically assessing evidence relied on in the valuation process and being alert to conditions which may cause information provided to be misleading’.

  • VPS 1 – reference to IVS 220 in relation to non-financial liabilities.

  • VPS 3 – minor amendments to the wording of 2.2 l) valuation approach and reasoning, which discusses the difference between approach and method and emphasises the importance of discussing sustainability and environmental matters when valuing interests in real estate.

  • VPS 5 – very minor amendments to the wording.

  • VPGA 1, 2, 7 and 8 – minor changes to cross-reference new IVS 220.

  • VPGA 1 – addition of 5. Performance Standards, discussing professionalism and professional competence, terms of engagement, sources and verification of information, documentation and reports.

  • VPGA 8 – in relation to the impact of sustainability on value, ‘only where existing market evidence would support this, or where in the valuer’s judgement market participants would expressly reflect such matters in their bids, should sustainability characteristics directly influence value(s) reported’.

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Stay tuned for our next blog post to help build a better you

N.b. Nothing in this article constitutes legal, professional or financial advice.