Valuer have to register in REGISTERED VALUER ORGANISATIONS (RVOs) that are listed in The Insolvency and Bankruptcy Board of India (IBBI) and have to pass Valuation Examination for Asset Class- Land and Building with minimum 60% marks.
IBBI was established on 1st October, 2016 under the Insolvency and Bankruptcy Code, 2016 (Code) . IBBI has approved following RVO for registration as valuer in India for Land and Building assets.
- Institution of Estate Managers and Appraisers
www.iesmarvo.net - IOV Registered Valuers Foundation
www.iovrvf.org - ICSI Registered Valuers Organisation
www.icsirvo.in - The Indian Institution of Valuers
www.iivrvo.org - ICMAI Registered Valuers Organisation
www.rvoicmai.in - PVAI Valuation Professional Organisation
- CVSRTA Registered Valuers Association
- CEV Integral Appraisers Foundation
- Divya Jyoti Foundation
Syllabus
Syllabus of Valuation Examination for Asset Class- Land and Building with
effect from 1st April, 2019
Principles of Economics
- Microeconomics
- Consumption: Indifference Curve, Consumer’s Surplus,
Elasticity - Price Mechanism: Determinants of Price Mechanism,
Individual and Market Demand Schedules, Law of Demand &
its Conditions, Exceptions and Limitations of Law of Demand,
Individual and Market Supply Schedules, Conditions and
Limitations, Highest, Lowest and Equilibrium Price,
Importance of Time Element - Pricing of Products under different market conditions: Perfect
and Imperfect Competition, Monopoly - Factors of Production and their pricing: Land, Labour, Capital,
Entrepreneur and other factors - Theory of Rent
- Capital and Interest: Types of Capital, Gross Interest, Net
Interest - Organisation and Profit: Functions of Entrepreneur, Meaning
of Profit and Theories of Profit
- Consumption: Indifference Curve, Consumer’s Surplus,
- Macroeconomics
- Functions & Role of Money
- Inflation: Types of Inflation, Causes, Effects, Inflationary Gap,
Control of Inflation, Monetary, Fiscal and Direct Measures - Deflation: Causes, Effects, Deflationary Gap, Measures to
Control Deflation, Deficit Financing - Savings and Investment: Savings and Types of Savings,
Determinants of Savings, Investment, Types of Investment,
Determinants of Investment, Relationship between Savings and
Investment - Components of Economy: Primary Sector, Secondary Sector,
Tertiary Sector, Informal Sector in Urban Economy, Parasitic
Components in Urban Economy - Concepts of GDP and GNP, Capital Formation
- Parallel Economy
- Definition of Parallel Economy, Causes and Effects of Parallel
Economy on use of Land and its Valuation - Its impact on Real Estate Market
- Construction Industry and Parallel Economy
- Definition of Parallel Economy, Causes and Effects of Parallel
Book Keeping and Accountancy
- Meaning and objects of Book Keeping, Double Entry Book
Keeping - Books of Prime Entry and Subsidiary Books: Cash Book, Bank
Book, Journal, Ledger, Purchase and Sale Books, Debit and
Credit Notes Register, Writing of Books, Posting and Closing
of Accounts - Trading Account, Profit and Loss Account, Income and
Expenditure Account - Preliminary Analysis of Financial Statements
- Cost, Costing and Elements of Cost, Fixed Expenses, Variable
Expenses, Break-Even Point
Law – General
- Indian Legal System: Salient Features of the Indian
Constitution, Fundamental Rights, Directive Principles of the
State Policy - Government: Executive, Legislature and Judiciary
- Laws of Contract: Formation of a Contract, Parties, Void,
Voidable and Unenforceable Contract, Contingent Contract,
Misrepresentation and Fraud and Effect thereof, Termination
of Contract, Remedies for Breach, Performance of Contract,
Indemnity and Guarantee, Law of Agency - Tort: General Principles of Tort, Tort affecting Valuation.
- Law of Arbitration and Conciliation: Salient Features
- Auction: Authority of Auctioneer, Duties of Vendor, Purchaser
and Public, Mis-description and Misrepresentation,
Advertisements, Particulars and Catalogues, Statements on the
Rostrum, Conduct of Sale, Reservation of Price and Right to
Bid, Bidding Agreements. Memorandum of the Sale. The
Deposit, Rights of Auctioneer against Vendor and Purchaser - Laws of Evidence: Burden of Proof, Presumptions, Conclusive
Proof
10 - Salient Features of the Insolvency and Bankruptcy Code, 2016
concerning Valuation - Salient Features of the Companies (Registered Valuers and
Valuation) Rules, 2017 - Salient Features of the Securitization and Reconstruction of the
Financial Assets and Enforcement of Security Interest Act,
2002 (SARFAESI Act, 2002) concerning Valuation - Section 5(n) of the Banking Regulation Act, 1949 on “Secured
Loan or Advance” - The Companies Act 2013: Section 192(2), 230 (1), 230 (2), 230
(3), 231, 232, 247 and 281(1)
Introduction to Statistics
- Data Classifications and Processing, Graphical Representation
of Data, Frequency Distributions - Measures of Central Tendency, Dispersion and Skewness
- Elementary Theory of Probability and Probability
Distributions, Sampling and Sampling Distributions,
Estimation - Simple Test of Significance, Regression and Co-relation,
Multiple Correlation Coefficient - Time Series
- Index Numbers
Environmental Issues in Valuation
- Environment and Valuation – Differences between the Market
Price and the Negative Value Consequent on Environmental
Impact - Environmental Issues of Air Pollution, Water Pollution,
Environmental Factors and their effects, Measures to Restore
the Damage, Cost to Cure - Outlines of Environmental Legislations: The Indian Forest Act,
1927, The Water (Prevention and Control of Pollution) Act,
1974, The Air (Prevention and Control of Pollution) Act,1981,
The Environment (Protection) Act,1986 - Laws related to Industrial Health and Safety
Professional Ethics and Standards
- Model Code of Conduct as notified by MCA under the
Companies (Registered valuers and valuation) Rules 2017 - Ethical considerations under terms of engagements
Law-Real Estate
- Land Acquisition – The Right to Fair Compensation and
Transparency in the Land Acquisition, Rehabilitation and
Resettlement Act, 2013 - General Building Rules and Regulations
- Rent Control Laws: Sections pertaining to Occupancy Rights
of Tenants, Freezing of Rent and Protection against Eviction of
Tenant and its effect on value of property - Right of Way and Section 52 – Licenses under the Indian
Easements Act, 1882 - Salient features of the Real Estate (Regulation and
Development) Act, 2016 and Real Estate Regulating
Authorities established under the Act
• The Transfer of Property Act, 1882 - Transfer of Immovable Property: Sale, Mortgage, Gift,
Exchange, Assignment, Charge, Lien, Tenancies/SubTenancies - Lease of Immovable Property, Lease granted by Private and
Statutory Bodies – Impact of each on Valuation - Sections: 3, 5, 6, 7, 25, 53 and 53A of the Transfer of Property
Act, 1882
• Laws Relating to Inheritance/Succession - Mohammedan: Muslim Personal Law
- The Hindu Succession Act, 1956, the Hindu Succession
(Amendment) Act, 2005 (39 of 2005)
The Indian Succession Act, 1925: Law of succession for person
other than Hindu and Mohammedan
Will & Testament, Succession Certificate
Valuation of Real Estate
- Cost, Price and Value
- Types of Value
- Basic elements of Value – Marketability, Utility, Scarcity, and
Transferability - Factors affecting Value – Physical, Economic, Legal and Social
- Highest and Best Use, Value in Use, Value in Exchange
- Real Property: Rights and Interests in Real Estate, Types of
ownerships and Types of occupancy in Real Estate - Annuities, Capitalization, Rate of Capitalization, Years’
Purchase, Sinking Fund, Redemption of Capital, Reversionary
Value - Construction and use of Valuation Tables
- Urban Infrastructure and its influence on Value of Real Estate
- Real Estate Market and its characteristics, Investment in Real
Estate, Factors influencing Demand and Supply Schedule in
Real Estate - Concepts of Green Building
- Income Approach to Value
- Relation between Income and Value
- Valuation of Property affected by the Rent Control Act,
Licensed property under the Easement Act, 1882 and
Leasehold properties under the Transfer of Property Act, 1882 - Derivation of Yield Rate from Market Derived Data
- Remunerative Rate of Interest and Accumulative Rate of
Interest - Types of rent: Outgoings, Income, Yield, Years’ Purchase
- Determination of Market Rent and Standard Rent
- Lease: lessor and lessee: Types of Lease, Lease provisions and
Covenants - Valuation of Lessor’s Interest, Lessee’s Interest including SubLease in Leased Property. Premature Termination of Lease or
Surrender of Lease - Real Estate as an Investment, Yield from Real Estate vis-à-vis
other forms of Investments- Sound Investment Comparison - Investment Decisions: Discounted Cash Flow Techniques,
Internal Rate of Return (IRR) and Net Present Value (NPV) - Profit Method: Valuation of Special Properties: Hotels,
Cinema, Mall, Petrol Pump, Hill resorts
- Market Approach to Value
- Types of Market, Demand and Supply Curve, Buyer’s and
Seller’s Bell Curve for Overall Sales Performance - Market Survey & Data Collection, Sources of Sale
Transactions - Comparison of Sale Instances – Factors of comparison and
weightages for adjustment in value - Hedonic Model and Adjustment Grid Model under Sales
- comparison Method
- Land characteristics and its effect on Land Values
- Hypothetical Plotting Scheme for value of large size land
- Residue Technique and other development methods
- Valuation for Joint Venture Development of property
- Types of Market, Demand and Supply Curve, Buyer’s and
- Cost Approach to Value
- Methods of Cost Estimates for Buildings
- Life of Building: Economic/Physical/Legal
- Factors affecting life of the building
- Total Life, Age, Estimating Future Life
- Various methods of Computation of Depreciation, Functional,
Technological and Economic Obsolescence - Reproduction Cost/Replacement cost, Depreciated
Replacement Cost (DRC) working, adopting DRC as Value
subject to Demand and Supply aspect - Land Value by Market Approach and Building Value by Cost
Estimation Method for Owner Occupied Bungalows, Factories,
Public Buildings
- Various purposes of Valuation
- Valuation of properties for purposes such as: Bank Finance,
Auction Reserve, Building Insurance, Sale, Purchase,
Valuation Disputes in Court, Probate, Partition, Rent Fixation,
Stamp Duty, Capital Gain Tax, Lease and Mortgage of
Property. Any other purposes not referred above - Study of Valuation Standards as per the provisions of the
Companies Act 2013 - Study of Indian Accounting Standards (Ind AS 16) as
applicable to Valuation - Valuer as an Expert witness in Court
- Valuers’ Functions & Responsibilities, Error of Judgement and
Professional Negligence
- Valuation of properties for purposes such as: Bank Finance,
- Important Case Laws on principles of valuation of Real
Estate:- K.P. Varghese Vs. Income Tax Officer and Another, (1981)
131 ITR 597 (SC) - Gold Coast Selection Trust Ltd. Vs. Humphrey (1948) 2 AllER 379 and (1949) 17 ITR 19
- R.C. Cooper Vs. Union of India, (1970) AIR SC 564
- Hays Will Trust Vs. Hays and Others (1971) 1WLR 758
- V. C. Ramachandran Vs. CWT (1979) 126 ITR 157 Karnataka
HC - Subhkaran Chowdhary Vs. I.A.C. (Acq), (1979) 118 ITR 777
Kolkata HC (Special Value/ FMV) - Wenger & Co. Vs. DVO (1978) 115 ITR 648 Delhi HC
(Combination of Methods) - Sorab D. Talati Vs. Joseph Michem, Appeal No. 101 0f 1949
in R.A. Application No. 805 of 1948 - CWT Vs. P.N. Sikand (1977) 107 ITR 922 (SC)
- SLAO (Eluru) Vs. Jasti Rohini (1995) 1SCC 717 SC
- Shubh Ram and Others Vs. State of Haryana (2010) 1SCC 444
- Jawajee Nagnathan Vs. Revenue Divisional Officer (1994)
- SCC (4) 595 (SC)
- Chimanlal Hargovinddas Vs. SLAO, AIR SC 1652
- Duncan Industries Ltd. Vs. State of U.P. and Other AIR 2000
SC 355 - CWT Vs. Purshottam N. Amersey and Anr., (1969) 71 ITR 180
(Bom) - Dr. K.R. Dhairawan and Others Vs. J.H. Thakur and Others
AIR 1958 SC 789
- K.P. Varghese Vs. Income Tax Officer and Another, (1981)
- Principles of Insurance and Loss Assessment
- Principles and legal concepts in relation to Insurance of
buildings. The Contract of Insurance. Insurable Interests and
Liability to Insure. Duties of the Insurer and the Insured - The types of Fire Policies -Reinstatement Value and Indemnity
Policies and policies for other perils, Terms and Conditions,
Perils, Beneficial and Restrictive Clauses - Value at Risk, Sum Insured and Condition of Average, Over
and Under Insurance, Inflation Provisions, other contents,
Depreciation, Obsolescence and Betterment - Preparation of Claim for Damages due to Insured Perils.
- Obligations and Rights of Insurer and Insured
- Principles and legal concepts in relation to Insurance of
- Report writing
- Reports-Quality, Structure, Style
- Report writing for various purposes of valuation-Sale,
Purchase, Purchase, Mortgage, Taxation, Insurance,
Liquidation etc - Contents of the report: Instruction of Clients, Date as on which
valuation is made, date of Report and Site Inspection, Location,
Ownership History, Data Collection and Analysis, Type of
Construction, Valuation Method, Value Estimation,
Assumptions and Limiting Conditions including Caveats and
Conclusion
- Case Study
This section will have a case study to test the ability to apply valuation techniques. There will be a comprehension narrating a transaction based on which questions will be asked.