The negligent valuation of contaminated land?
| Pages | 375-389 |
| Date | 01 August 2001 |
| Published date | 01 August 2001 |
| DOI | https://doi.org/10.1108/EUM0000000005791 |
| Author | Miles Keeping |
| Subject Matter | Property management & built environment |
Academic papers:
Negligent
valuation
375
Journal of Property Investment &
Finance, Vol. 19 No. 4, 2001,
pp. 375-389. #MCB University
Press, 1463-578X
ACADEMIC PAPERS
The negligent valuation of
contaminated land?
Miles Keeping
Oxford Centre for Real Estate Management, Oxford Brookes University,
Oxford, UK
Keywords Property valuation, Contamination, Liability, Negligence
Abstract There has been much discussion in the academic and practitioner press about the
valuation of contaminated land. Most of this discussion has centred upon the various techniques
that can be used to determine an ``appropriate figure'' and what the effect, if any, might be of
contamination ``stigma''. Despite a re-emergence in recent times of papers discussing professional
liabilities in other aspects of valuation practice (particularly concerning bank loan valuations),
there has been little discussion about the possibility of negligence being committed by valuers of
contaminated land. The professional body which represents most professional valuers in the UK,
the Royal Institution of Chartered Surveyors (RICS) has issued guidance for the benefit of its
members which attempts to clarify the complexities of law and valuation methodology which exist
in this area. It has been suggested that due to the complex nature of the valuation of
contaminated assets, as evidenced by the quantum of papers on this matter, many practising
valuers might still not be discharging the professional duty to an adequate degree. This paper
seeks to determine whether this is an accurate suggestion by verifying the existence and clarity of
the guidance and then investigating both whether professional practitioners are familiar with it
and implement it. Existing literature and case law are referred to in order to assist these tasks
and a questionnaire survey to 400 practitioners was administered. The paper concludes that
levels of valuers' competence in this area, as measured against an objective standard, is often very
low and that many valuers are possibly negligent when acting for clients with an interest in a
potentially or actually contaminated site. Assessment and monitoring of professional competence
in this area is recommended.
Introduction
Much has been written about contaminated land in terms of valuation
methodologies that can be followed by practitioners. In the USA, work on this
topic started to be published some time before that in the UK. Patchin (1988,
1991, 1994) was amongst the first authors to express views about methodology
in this respect and he was ably assisted by Mundy (1992), Chalmers and Roehr
(1993) and Wilson (1994). It is perhaps not surprising that the USA led the way
in the publication of articles concerning this topic; the market has had longer to
adapt to the effect of contaminated land, since the primary legislation there
which relates to the liability for hazardous sites (ComprehensiveEnvironmental
Response, Compensation, and Liability Act (CERCLA)) dates from 1980. The
fact that valuers in the USA have had a longer time in which to come to terms
with land contamination has resulted in ``greater academic debate and
theoretical discussion, as well as an emergence of a number of relevant
valuation cases'' (Dixon and Richards,1995). The flow of articles in UK journals
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