STUDY ON IMPROVEMENT OF VALUATION CONSISTENCY

Abstract

Consistency considered as one of the main governing principles of valuation profession where consistency issues in valuation were raised in several instances when the valuation furnished for lending institutions and assessing compensation for acquired lands. Cost base methods are more popular among the valuers in the event of assessing market value for the aforesaid purposes. The system of estimating land values were developed properly in Sri Lanka but the system of adopting rates for the improvements/constructions were not much systemized and this leads to arise consistency issues in the valuation. The study is forced to improve consistency in capital valuation when using cost base method. Literature review that there was no unique building classification and no proper market study on building rates apply for the valuation. The study proposed cost base building classification and Building Cost calculator to derive building rates as a guideline for the valuer.