Portfolio managers are generally expected to obtain at least three quotations for the body corporate prior to appointing a valuations service provider. While this practice favours the idea of good governance, it is time-consuming and complicates the portfolio manager’s job tremendously.
If you believe the municipal valuer has over-valued your property, you should contest this; if justified, the valuer will be amended. If an objection is not lodged during the advertised objection period there is little prospect of having the municipal valuation amended, barring special circumstances.
The properties are compared by erf size, number of bedrooms, number of bathrooms and quality class. Needless to say, this automated mass valuation method cannot take into account factors that require a keen (human) eye, such as state of repair, specific design, etc. This often leaves the accuracy of such valuations in doubt.
The trustees of a body corporate must present a Schedule of Replacement Values (SRV) at the AGM for approval. It should reflect the replacement cost of each section and its undivided share in the common property.
In valuing the contents, most asset management specialists will consult annual guide books to estimate the value of an item or similar item. To achieve a higher degree of accuracy, we (Mirfin) research the open market for the replacement cost of each exact item or its successor. In the case of unique items where we are unable to source a price, we will agree with the insured on a suitable value.