Ten points to be remembered by a SARFAESI valuer

KNOWLEDGE BANK

LET KNOWLEDGE SPREAD

Message from B K Aruna 09.09.2023

Ten 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 property is a SARFAESI compliant property.

3. The role played by the approved drawing is not that 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 and 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 fresh measurements. The responsibilities are more for a SARFAESI valuer than the panel valuer. Be prepared to defend your valuation at any point of time.

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 under-valuation thinking that you want to be conservative. Remember, the borrower may seek 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.