POINTS TO BE REMEMBERED BY A SARFAESI VALUER

KNOWLEDGE BANK FROM B KANAGA SABAPATHY

LET KNOWLEDGE SPREAD

Message from B. K. sir 14.03.2023

Points to be remembered by a SARFAESI valuer :

1. Value varies with purpose. The purpose of valuation under SARFAESI act is to certify the auction value.

2. Before undertaking the assignment, ascertain first whether the said property under valuation is SARFAESI compliant property.

3. The role played by the approved drawing is not very significant in SARFAESI valuation.

4. If the actual building area is more than the approved drawing area, then do the valuation of building for “as is where is” condition.

5. If the actual extent of land is more than the deed extent, then do the valuation for the deed extent only. If the available extent is less than the deed extent, do the valuation for the lesser extent only. But record the facts properly in your valuation report.

6. Obtain the engagement letter from the bank, verify the identification of the property, enclose the photographs along with the report. Take sufficient time to prepare the report and submit the report confidently.

7. Never proceed blindly based on the previous valuation report. Inspect the property physically again and take the fresh measurements. The responsibilities are more for a SARFAESI valuer than the panel valuer. Be prepared to defend your valuation.

8. Ascertain the present worth of the assets, discuss the negative factors affecting the auction, discount suitably and certify both the present worth as well as auction value.

9. Don’t do undervaluation thinking that you want to be conservative. Remember, the borrower may seek the legal remedy if his property is auctioned for a lesser value. You may be questioned in the court of law.

10. While preparing a report for SARFAESI, it should not be your aim to find fault unnecessarily with the previous panel valuer. Adopting a big brother attitude is not expected from a professional valuer like you.

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With best wishes,

B. KANAGA SABAPATHY
bkvaluer@gmail.com
www.bkanagasabapathy.com

About the Author:-

Mr. B. Kanaga Sabapathy born in 1951, is a Civil Engineer who belongs to the 1972 batch of Regional Engineering College, Tiruchirappalli in Tamilnadu.
He is a Registered valuer of the Central Board of Direct Taxes, a Professional Engineer and also a Chartered engineer. Valuation is his main profession..
He was the National Vice-President of the Institution of Valuers (India) for 11 terms.
He is a regular contributor of articles in the Indian Valuer Journal from the year 1985. His articles especially his regular column “Questions & Opinions” are very popular among the practising valuers in India.
His book “Guidelines on Valuation for Banks” (2002) is used to be referred by many banks. The valuation formats designed by him were accepted and adopted as the formats by many banks in the country.
His son K. Arun and daughter B.K. Aruna are also approved valuers and they also contribute articles to the Indian valuer journal.
His guru: Mr. C.H. Gopinatha Rao, Chennai.
His mentor: Mr. R.K. Gandhi, Mumbai.
His role model: Mr. S. Rajaratnam, Chennai.
His best students: Thousands of valuers in the country