BOVAEP Valuer TPC flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Market value

The estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller in an arm's-length transaction after proper marketing, without compulsion.

Investment value

The value of an asset to a particular owner or prospective owner for individual investment or operational objectives, reflecting the owner's requirements, risk profile, and expectations rather than general market evidence.

Capitalisation approach

A valuation method that converts a property's expected net operating income into capital value by dividing income by a market-derived capitalisation rate; value equals net income divided by rate.

Depreciated replacement cost

A cost-based method that estimates the current cost of replacing an asset with a modern equivalent, then deducts physical deterioration, functional obsolescence, and external obsolescence to reflect the asset's remaining service potential.

Going-concern value

The value of a business or operating property as a continuing entity, including goodwill, licences, workforce, and contracts, distinct from the sum of its individual tangible assets sold separately.

Specialised property

Property that is rarely sold in the market, apart from the business that occupies it, and whose value depends on continued use because a buyer could not readily adapt it for another purpose.

Profits method

A valuation approach for trading properties that estimates maintainable gross profit, deducts operating costs and a fair return for the operator's effort and risk, then capitalises the resulting surplus.

Plant and machinery

Tangible assets used in operations, such as equipment and installations, which may be valued separately from land and buildings and may carry different values depending on whether they remain in situ or are removed.

Torrens system

A land registration system in which title is recorded on a central register, and a registered proprietor's title is generally indefeasible except for fraud, misrepresentation, or statutory exceptions.

Strata title

A title for a parcel within a subdivided building or land, coupled with an undivided share in common property and membership of a management corporation responsible for shared areas.

Caveat

A statutory notice lodged against a registered title to protect an unregistered interest, preventing dealings that would defeat that interest until the caveat is removed or lapses.

Malay reserved land

Land declared under state law as reserved for ownership by ethnic Malays, with restrictions on transfer, lease, or charge to non-Malays, affecting marketability and valuation.

Rateable value

The annual value of a property used by a local authority as the base for rating, commonly assessed from estimated gross annual rent with allowances for repairs and maintenance.

RPGT

Real Property Gains Tax, a Malaysian tax on chargeable gains from disposing of real property or shares in real property companies, computed from disposal price less acquisition price and allowable costs.

Compulsory acquisition

The statutory power of government to take private land for a public purpose, triggering compensation assessed under legislation for market value, severance, injurious affection, and disturbance.

Pointe Gourde principle

A compensation rule that disregards increases or decreases in land value caused by the public scheme for which land is acquired, so compensation reflects value without the scheme.

Highest and best use

The most probable use of a property that is legally permissible, physically possible, financially feasible, and maximally productive, producing the highest value on the valuation date.

Plot ratio

The ratio of total gross floor area of a building or development to its site area; it is used in planning control to limit development bulk and density.

Residual land value

The value of development land calculated by subtracting all development costs, finance, fees, contingencies, and required developer's profit from the projected gross development value.

Development appraisal

A financial model of a development that estimates revenue, construction and professional costs, finance, timing, profit, and return, used to test feasibility and support land bids.

Capitalisation rate

A market-derived rate that expresses a property's net operating income as a percentage of capital value, reflecting risk, growth expectations, liquidity, and comparable transaction evidence.

Net present value

The sum of discounted future cash inflows minus outflows over an investment holding period; a positive result indicates value creation at the chosen discount rate.

Internal rate of return

The discount rate that makes the net present value of an investment's cash flows equal zero, representing the annual compound return expected from the investment.

Debt service cover ratio

A lender's test calculated as net operating income divided by annual debt service; a higher ratio indicates greater capacity to meet mortgage payments from property income.

BOVAEP

The Board of Valuers, Appraisers, Estate Agents and Property Managers, the Malaysian statutory regulator for these professions under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981.

Professional indemnity insurance

Insurance covering a valuer's legal liability for negligent acts, errors, or omissions in professional work, typically required for registration and maintained at a level matching instruction risk.

Conflict of interest

A situation in which a valuer's personal, financial, or other interest could improperly influence, or appear to influence, professional judgement, requiring disclosure or withdrawal from the instruction.

Contingent fee

A fee arrangement where payment depends on the value reported or a transaction outcome; for valuations it compromises independence and is generally prohibited or strictly controlled.

Valuation date

The specific point in time at which the value opinion applies, which may differ from the inspection date and report date and must be stated clearly.

Basis of value

The definition of the value being reported, such as market value or investment value, which determines the assumptions, evidence, and method used in the valuation.

Special assumption

A fact or condition assumed in a valuation that differs from the actual situation at the valuation date, such as vacant possession or planning consent, and must be disclosed.

Limiting condition

A statement in a valuation report that restricts the use, scope, or reliance of the valuation, such as prohibiting publication or limiting reliance to the named client.