European Valuation Standards (EVS)

TEGoVA has published valuation standards for real estate since the early 1980s.

A singularity of EVS has always been to highlight the origins in EU law of concepts as basic to the profession as 'market value' and 'mortgage lending value', or the EU definition of 'asset valuer' for state aid rules, or again, under the EU Capital Requirements Directive, the concepts of 'independent valuer' and valuation reporting for the purposes of monitoring and reporting the values of property used as collateral. But EVS 2012 takes coverage and understanding of the EU's influence on property and valuation to another level.
Besides the inevitable updating and associated rewriting, this edition goes beyond the provision of standards and their application. Divided into three parts, this book contains European Valuation Standards and their application in Part I, European Union legislation pertinent to property valuation in Part II and a series of technical documents in Part III.

The Seventh Edition

Substantive changes have been made to the Standards (EVS1 - EVS5). The definition of "Market Value" in EVS1 is the same as that used in both EVS 2009 and the EU's Capital Requirements Directive of 2006 save that it now refers more broadly to the "asset" rather than the "property" and uses the phrase "valuation date" rather than "date of valuation" as the latter has proved to cause some international confusion. These changes do not affect its interpretation for property. The definition of "Market Rent" continues to refer to a "property" as it concerns the rent for a leasehold interest. Some "Assumptions" and "Special Assumptions" that may be made in forming an opinion of Market Value are set out. Clarification of the concept of "highest and best use" is provided in a considerable commentary. As the application of "Fair Value" is used in two particular but distinct contexts, two separate definitions are provided in EVS2. In EVS3 all "Qualified Valuers" and their representative professional or technical organisations are now required to adhere to the TEGoVA Code of Ethics and Conduct, as provided within Part III of this book. EVS4 considers the procedural steps to be followed in preparing a valuation report, including a requirement that detailed terms of engagement that must be agreed in writing with the client prior to submission of any valuation report. EVS5 now states that these terms should virtually mirror the headings of the report, and provides additional requirements, including provision of a description of the valuation methodology and analysis utilised in forming the opinion of value.

Part II "European Union Legislation and Property Valuation", provides a comprehensive overview of EU legislation as it applies to property. Specific EU Internal Market provisions on the valuation of property are examined including valuation of property for company accounts, financial institutions and state aid rules as well as an overview of Internal Market taxation legislation including VAT and property. This is followed by a review of property and valuation aspects of EU health and safety policy, energy policy, environment policy including such property and valuation-relevant fields as environmental and strategic impact assessments, water, and environmental liability for contaminated land, pollution, asbestos, biodiversity and conservation. The Common Agricultural Policy is also reviewed, as access to and limitations on CAP payments are relevant to both capital values and rents of relevant property.

Part III: Technical Document consists of 11 separate chapters. TEGoVA codes relating to ethics and conduct and measurement of distance, area and volume are included, together with summaries of TEGoVA's "Minimum Education Requirements" and "Recognised European Valuer Scheme". Three Information Papers relating to sustainability and valuation, the apportionment of value between land and buildings and certification of valuers are also set out. The final chapters provide a "Classification of TEGoVA's Technical Documents", an updated valuers guide to "Property and Market Rating" that enables a standardised and objective risk assessment of properties; a copy of the European Mortgage Federation's "Profile for Risk Related Criteria for Valuations" and, finally, a glossary.

EVS 2012 does not address any country specific issues. Country chapters are published on this website setting out details of national legislation and valuation practice that are relevant to that country.

This, the seventh edition of European Valuation Standards replaces the previous edition with effect from 1 June 2012.

The Structure

The book is divided into three parts and is set out as follows:

Part 1 - EUROPEAN VALUATION STANDARDS AND APPLICATIONS

1A - EUROPEAN VALUATION STANDARDS

EVS1 Market Value
EVS2 Valuation Bases Other than Market Value
EVS3 The Qualified Valuer
EVS4 The Valuation Process
EVS5 Reporting the Valuation

1B - EUROPEAN VALUATION APPLICATIONS

EVA1 Valuation for the Purpose of Financial Reporting
EVA2 Valuation for Lending Purposes
EVA3 Property Valuation for Securitisation Purposes
EVA4 Assessment of Insurable Value
EVA5 Application of Investment Value (Worth) for Individual Investors
EVA6 Cros-border Valuation
EVA7 Property Valuation in the Context of the Alternative Investment Fund Managers Directive
EVA8 Property Valuation and Energy Efficiency

Part 2 - EUROPEAN UNION LEGISLATION AND PROPERTY VALUATION

Part 3 - OTHER TECHNICAL DOCUMENTS

Download the Blue Book

EVS 2012 can be downloaded free of charge from this site.

Please click the link.

How to buy the hard copy of the Blue Book

Hard copy of EVS 2012 can be ordered from this site.

Please click the link.

The Country Chapters illustrate differences that currently exist across Europe. They are not intended to provide definitive advice. The text has been provided by TEGoVA Member Associations (TMAs) to outline country-specific legislation and practice.

The EVS Board provides recommendations to the Board and the General Assembly of TEGoVA in respect of amendments required to European Valuation Standards.