Conditions of exercise

GENERAL CONDITIONS FOR EXERCISING EXPERTISE IN REAL ESTATE APPRAISAL

Terms and conditions
The Expert is either a natural person or a legal person.
If the Expert is a legal person, its Technical Direction must be provided by one or more Natural Person Experts.
Conditiofinancial ns
- The Expert agrees his remuneration with his Principals.
- He undertakes to have his professional civil liability as well as that of his employees covered by an insurance company known to be solvent.
PROFESSIONAL ETHICS
The Expert undertakes to respect the main ethical rules recalled below.
Duties of the expert
The Expert can refuse a mission, but if he accepts it he must complete it completely.
During the execution of his mission, he must:
Carry out its operations with honor, dignity and correction,
Carry out their tasks impartially,
Maintain their independence by excluding any pressure or influence,
Conclude in good faith and in good faith,
Respect professional secrecy,
· File its conclusions within the agreed timeframe.
Relations with its constituents
The Expert is presumed to be independent when no personal interest, no family relationship of subordination is likely to influence his assessment. Otherwise, he must recuse himself.

He must also:
Implement all the means of investigation necessary for the accomplishment of its mission,
Be able to justify their conclusions,
· write a clear and precise report.

Relations with colleagues
The Expert must maintain courteous relations with his colleagues.
- In all confraternity, he can exchange with them non-confidential information and data useful for their work, without harming the interests of his principal.
Liability towards third parties
The principal is free to make such use of the Expert's report as it sees fit, provided that it respects its completeness and the agreed purpose.
- With regard to his principals and third parties, the professional responsibility of the Expert corresponds to his obligation of means and not of result.
Advertising
When recourse to advertising is not formally prohibited, such advertising must be exercised with restraint and in accordance with the law.
- A Charter Application Committee will set the conditions under which this Charter may be used for promotional purposes.

PRINCIPLES AND METHODS OF EVALUATION
The Expert remains free to choose the principles and methods suited to the conclusions he must produce.
However, there must be a consensus between the members of the Charter on the main evaluation principles, the basic methodology and the presentation of Expert Reports.
The methodological principles, in particular in terms of terminology, are developed below in the METHODOLOGICAL GUIDE RELATING TO THE VALUATION OF REAL ESTATE ASSETS.

Types of values
There are two categories of land and building values:
Market values (market value, rental value),
· Replacement values (gross or net replacement cost).

1 - THE S MARKET VALUES

Market value
This is the price at which a property right could reasonably be sold on the market amicably at the time of the Expertise, the following conditions being assumed to be met beforehand:
a) the free will of the seller and the buyer,
b) a reasonable period of time for negotiation, taking into account the nature of the good and the market situation,
c) that the value is at a substantially stable level during this period,
d) that the good has been offered for sale under market conditions, without reservations, with adequate publicity,
e) the absence of personal suitability factors.

Rental value
It is the annual financial consideration likely to be obtained on the market for the use of real estate within the framework of a rental contract.
It therefore corresponds to the market rent that must be obtainable from a property under the usual terms and conditions of leases for a category of property and in a given region.
The notion of market rental value implies that there is no, parallel to the conclusion of the lease, payment of a capital sum either to the previous tenant (right to the lease), or to the owner (no door, entrance fee).
The market rental value is expressed excluding lease rights or VAT, and excluding rental charges, or of any other nature, re-invoiced to the lessee.

2 - REPLACEMENT VALUES

Gross replacement cost
This is the cost of purchasing the land and the cost of constructing the buildings, identical or equivalent, therein, non-recoverable taxes, costs, taxes, fees included.
Net replacement cost
This is the gross replacement cost, from which the depreciation for obsolescence and obsolescence is deducted.

Assessment methods
There are four main families of real estate valuation methods.
Comparison methods direct (or market methods)
These consist in comparing the property which is the subject of the Expertise, with transactions carried out on goods equivalent in nature and location, at a date as close as possible to the date of the Expertise.
Income methods
These consist of capitalizing or discounting an annual income, whether it is recorded rent or rental value, gross income or net income, to arrive at a market value.
Replacement cost methods
These consist in reconstituting the cost price of the good, by deducting, if necessary, a depreciation.
This last category of methods is little used in terms of market value. It is more frequently used for very specialized real estate or to define utility or operating values.
The so-called "professional" methods
These apply to specific categories of real estate or of the monovalent type (clinics, hospitals, hotels, cinemas, theaters, etc.) when their assignment is maintained. These methods are in fact derivatives of the income or comparison methods.

We can assimilate the so-called "balance sheet-promoter" method sometimes called land recovery method or operator countdown. This method consists in determining the value of a piece of land, a land charge or a building to be reconstructed, renovated or rehabilitated, on the basis of the final sale price of a promotion, rehabilitation or renovation operation. development, and by deducting the cost of the work and the various costs related to the operation.

APPLICATION
1 - Any member organization is required to ensure that its members comply with the provisions of this Charter and its constituent texts: METHODOLOGICAL GUIDE RELATING TO THE VALUATION OF REAL ESTATE ASSETS, DILIGENCE GUIDE, COMMON ETHICAL PRINCIPLES.

2 - To ensure their application, the signatory Associations set up an Application Committee for the Charter of Expertise in property valuation.
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