In brief
Attention valuers: supplementary reports are permissible, but stringent guidelines are now in place.
If a valuer is of the view that its rent determination report is deficient or requires elaboration, a valuer can issue a supplementary report to support their initial report. However, the supplementary report should be issued within a timely manner following the initial report, and there must be no evidence of any collusion with the landlord or tenant.
What you need to know
- Whilst a supplementary report may be issued by the valuer, it is highly recommended that the valuer obtain legal advice before doing so.
- It is recommended that a valuer avoid the scenario where supplementary reports are detrimental and result in valuations being set aside.
Background
The issue concerning a valuer providing a supplementary report arose in Epping Hotels Pty Ltd v Serene Hotels Pty Ltd (2015). In this case, Justice Croft of the Supreme Court determined that it was permissible for a valuer to issue a supplementary report, as there was nothing in the Retail Leases Act 2003 (Vic) that required that the valuation be contained in one report. However, Justice Croft suggested that the court will not have regard to a supplementary report if the report is provided so late that it may deprive a party of procedural fairness or if there was evidence of collusion or fraud.
Conclusion
The need for a supplementary report may arise where a landlord or tenant seeks clarification regarding matters specified in the original valuation. Whilst the law will permit a supplementary report to be issued, it must be done in a timely manner after the valuation has been issued and there is no suggestion of fraud or collusion. We strongly recommend that a valuer seeks legal advice before issuing a supplementary report to avoid invalidating the initial valuation report.
