NIESV PPE cheat sheet

NIESV is the professional body for estate surveyors and valuers in Nigeria; its examining arm is the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON), which registers practitioners and issues the practising licence.

Core professional services comprise valuation, estate agency, property management, facilities management, feasibility and viability studies, land economics consultancy, and expert-witness testimony.

A firm's engagement letter should fix scope, basis of value, fee basis, timetable, limitation of liability, and the client's duty to supply title documents and information.

Professional indemnity insurance is a practical requirement for valuation and consultancy work; negligence claims in valuation are typically framed in tort or contract.

Records of instructions, inspection notes, comparables, and drafts should be retained for a defined period (commonly six years or more) to support defence of claims and professional audits.

A valuer must not act where a conflict of interest exists, or where the fee is contingent on the reported value; independence underpins the credibility of the report.

Fees may be ad valorem (percentage of value), time-based, or lump sum; ad valorem scales must be disclosed and agreed in writing before instruction.

Continuing professional development (CPD) is a condition of retaining professional membership and licence; records of CPD points should be kept.

Fundamental ethical principles: integrity, objectivity, competence, confidentiality, professional behaviour, and compliance with technical standards.

Conflict of interest arises where the practitioner has a personal, financial, or family interest in the property or the parties; it must be disclosed and, where material, the instruction declined.

Contingent fees (fee varying with the reported value) are prohibited for valuation work because they compromise objectivity.

Confidentiality extends to client information and unpublished comparables; disclosure is permitted only with consent or where legally compelled.

Advertising and marketing by practitioners must be truthful, not misleading, and must not disparage other practitioners.

Handling client money (rents, deposits, sale proceeds) requires separate client accounts, clear records, and prompt accounting to clients.

A practitioner should decline instructions outside their competence or obtain specialist input; accepting work beyond competence is a disciplinary matter.

Disciplinary processes typically involve complaint, investigation, hearing by a professional conduct committee, and sanctions ranging from caution to expulsion.

Five methods: comparison (market), investment (income), profits (receipts and expenditure), cost (contractor's), and residual (development) method.

Market comparison: value = adjusted price of comparable transactions; adjustments reflect time, location, size, condition, and tenure differences.

Investment method (freehold): capital value = net income × years' purchase (YP); YP in perpetuity = 100 / yield (%).

Investment method (leasehold): value = net income × YP for the term plus reversion × PV of reversion, using dual-rate or single-rate tables as appropriate.

Net income = gross rent less outgoings borne by the landlord (repairs, insurance, management, voids allowance).

Residual method: site value = gross development value less total development costs (construction, fees, finance, contingency) less developer's profit.

Cost method: value = current cost of replacement/reinstatement less depreciation (physical, functional, economic) plus land value where relevant.

Basis of value must be stated: market value, market rent, fair value, investment value, or forced-sale value; each has a defined meaning under IVS.

Land Use Act 1978 vests all land in each state in the Governor, held in trust for the people; individuals hold rights of occupancy, not absolute ownership.

Statutory right of occupancy is granted by the Governor (usually 99 years); customary right of occupancy is granted by local government and is not time-limited.

A Certificate of Occupancy (C of O) is evidence of a statutory right of occupancy; it is not conclusive proof of title and can be challenged.

Consent of the Governor is required for assignment, mortgage, or transfer of a statutory right of occupancy; failure renders the transaction voidable.

Deeds registration in the state Lands Registry and the Land Instruments Registration Law provide priority; registration is not the same as title investigation.

Tenancies: tenancy at will, periodic tenancy, fixed-term lease; the Recovery of Premises Act and state rent control laws govern notices to quit and recovery of possession.

Customary tenure recognises family land, communal land, and individual holdings; family land requires consent of the principal members and the family head for alienation.

Compulsory acquisition and revocation of rights of occupancy are governed by the Land Use Act and require public purpose and payment of compensation.

An agency relationship is created by express appointment, implied conduct, or ratification; the agent owes duties of loyalty, disclosure, obedience, and accounting.

Types of agency: sole agency, joint agency, multiple agency, and sub-agency; each carries different commission and liability implications.

Commission is typically earned on introduction of a ready, willing, and able purchaser or tenant, subject to the terms of the agency agreement.

Marketing tools include listing portals, signage, brochures, virtual tours, open-house inspections, and targeted digital advertising.

A property particulars sheet should state tenure, accommodation, services, asking price/rent, and any material defects known to the agent.

Anti-money-laundering obligations require client due diligence, source-of-funds checks, and suspicious-transaction reporting.

Estate agents should verify title and authority to sell or let; marketing a property without authority exposes the agent to liability.

Tenancy agreements should specify rent, deposit, term, break clauses, repairing obligations, and the mechanism for rent review.

Property management covers rent collection, service-charge administration, repairs, lease compliance, and tenant relations; facilities management adds hard and soft services delivery.

Service charges must be reasonable, transparent, and supported by budgets and audited accounts; sinking funds cover major repairs and replacements.

A service-charge budget should separate fixed costs (insurance, management fee) from variable costs (utilities, cleaning, security, repairs).

Rent review clauses commonly use open-market, index-linked, or fixed-increase mechanisms; the valuer determines the open-market rent.

Lease compliance monitoring includes use restrictions, alterations, subletting, insurance obligations, and repair covenants.

Preventive maintenance schedules reduce lifecycle costs; reactive maintenance addresses breakdowns and should be logged and analysed.

Health and safety duties for managed buildings include fire safety, lift inspection, electrical testing, and asbestos management.

Key performance indicators for FM contracts include response times, uptime, energy consumption, tenant satisfaction, and cost per square metre.

Bid-rent theory: land uses compete for sites; the highest and best use maximises the present value of the site.

Highest and best use must be legally permissible, physically possible, financially feasible, and maximally productive.

Development appraisal: residual land value = gross development value less construction cost, professional fees, finance, contingency, marketing, and developer's profit.

Development finance costs depend on the interest rate, drawdown profile, and construction period; cash-flow timing materially affects viability.

Planning gain and infrastructure levies reduce residual land value; they should be modelled explicitly in the appraisal.

Property markets are segmented by use (residential, commercial, industrial, hospitality) and by location; each segment has distinct demand drivers.

Rental growth, yield compression, and capitalisation rates link income performance to capital values.

Feasibility differs from viability: feasibility tests whether the scheme can be built; viability tests whether it is financially worthwhile.

Investment appraisal techniques: payback period, net present value (NPV), internal rate of return (IRR), profitability index, and discounted cash flow (DCF).

NPV = sum of discounted cash flows less initial outlay; accept projects with positive NPV at the required discount rate.

IRR is the discount rate at which NPV = 0; accept projects whose IRR exceeds the cost of capital.

Capitalisation rate = net operating income / capital value; it reflects risk, growth expectations, and market conditions.

Debt service coverage ratio (DSCR) = net operating income / annual debt service; lenders typically require a ratio above 1.2.

Loan-to-value (LTV) ratio = loan amount / property value; it constrains leverage and affects equity returns.

Real estate investment trusts (REITs) pool investor capital to hold income-producing property; they offer liquidity and diversification.

Sensitivity analysis tests how NPV or IRR changes when key variables (rent, yield, construction cost, interest rate) move.

Arbitration is consensual adjudication by a tribunal; the award is final and enforceable, subject to limited grounds for challenge.

Mediation is facilitated negotiation; the mediator does not decide the outcome; settlements are recorded in a binding agreement.

The Arbitration and Mediation Act 2023 governs arbitration in Nigeria and incorporates international best practice, including emergency arbitrator provisions.

An expert witness owes a paramount duty to the court or tribunal, not to the party instructing them; the report must be independent and objective.

Expert reports should state qualifications, instructions received, documents relied on, methodology, factual findings, assumptions, and conclusions.

The expert should distinguish facts observed from opinions expressed and should disclose any matters that undermine their conclusion.

Cross-examination tests the expert's methodology and assumptions; the expert must not advocate for the instructing party.

Valuation disputes commonly turn on basis of value, comparables selected, and adjustments made; the expert should justify each adjustment.

Compulsory acquisition under the Land Use Act requires a public purpose and payment of compensation for the revoked right of occupancy.

Compensation heads: value of the land, value of unexhausted improvements, and resettlement costs (disturbance, injurious affection, severance).

The Land Use Act prescribes that compensation for land is based on the value at the date of revocation, with improvements assessed at open-market value.

Injurious affection compensates for loss in value of retained land caused by the acquisition of part of the holding.

Severance compensates for the loss of value arising from dividing a single holding into separate parts.

Disturbance compensates for relocation costs, loss of profits, and incidental expenses; it must be reasonably incurred and evidenced.

Public sector valuers prepare asset registers, insurance valuations, and disposal valuations for government agencies, applying the same standards as private practice.

Statutory compensation disputes are usually resolved by the Land Use and Allocation Committee or by the courts, with expert valuation evidence.

Town planning controls land use through zoning, development control, and planning permission; the relevant law is the state Town and Country Planning Law.

A development permit is required before commencing building or changing use; unauthorised development attracts enforcement notices and demolition orders.

Environmental Impact Assessment (EIA) is required for projects likely to have significant environmental effects, under the EIA Act.

Sustainability in real estate includes energy efficiency, water conservation, waste management, and green building certification.

Environmental risk assessment informs valuation through contamination, flood risk, and subsidence; these can reduce market value.

Building regulations and planning conditions may impose design, density, setback, and parking requirements that affect site value.

Green building features can command rental and capital premiums; valuers should reflect them in comparables and yield analysis.

Climate risk (flooding, erosion, heat) is increasingly priced into property values; valuers should consider it in highest and best use analysis.

A valuation report should state the client, purpose, property description, tenure, basis of value, inspection date, valuation date, methodology, comparables, assumptions, and conclusion.

The valuation date differs from the report date; the valuation reflects market conditions at the valuation date.

Assumptions and limiting conditions must be clearly stated, including matters not verified (title, services, structural condition).

Comparables should be identified with source, date, price, and adjustments; confidentiality may require anonymising them.

The report should be signed by the valuer with qualifications stated and the firm's details; unsigned reports lack authority.

Practice administration includes engagement letters, fee notes, time records, client files, and professional indemnity insurance records.

Report language should be precise and free of ambiguity; avoid words such as 'approximately' where a stated figure is required.

A caveat or restriction on use of the report limits reliance to the named client and stated purpose.