On 1st July the latest edition of the RICS "Red Book" came into effect. This contains rules that must be followed by RICS members undertaking most types of valuation in most parts of the world. Since it runs to 272 pages, most will struggle to find the time to spot the changes that may affect the way they undertake and report their valuations. Because standards are our business, we have taken the time to do this and have produced a single page guide to the changes we think are most significant.
The "Red Book" moniker is still how the RICS valuation standards are generally known, even though most no longer access it in book form. The formal name of the publication launched last month is the "RICS Valuation - Global Standards 2017", although the term Red Book is used throughout. In the UK, and certain other countries, the RICS issues national standards that are supplemental to the global standards. Confirmation that a valuation complies with the Red Book without further qualification means that it complies with the latest global and any applicable national RICS standard. So, although not always a book, the Red Book may simultaneously be one book or two books.
In case this venture into metaphysics was not sufficiently taxing, since 2014 RICS has also included another set of standards within the Red Book, the International Valuation Standards (IVSs). However, this may or may not be a third book. It exists separately as a book, but is also part of the Red Book unless the client doesn’t want it to be. If a member is required by their client to follow the IVSs rather than the Red Book, the Red Book stipulates that the valuer must specifically state that they have undertaken the valuation in accordance with the IVSs, not the Red Book. Erwin Schrodinger would have been proud of such a thought experiment.
Clearing up the existential nature of the Red Book is normally sufficiently exhausting for most practitioners. To assist, I have done my best to make a side by side comparison of the new global standards with the previous edition. There are some changes which I am sure most will see as positive, but others that may have unintended consequences. I will return to these and some potential issues arising from the juxtaposition of the various standards in future articles. In the meantime I have picked out ten changes of which I think will be of interest to the widest range of RICS valuers and fitted them on to a single page which you can read or download.
Ten things you need to know about the new RICS Red Book