1. Defvas Project In Partnership with TEGoVA and the IRRV EUROPEAN VALUATION APPLICATION - 2 VALUATION FOR LENDING PURPOSES

2. Defvas Project In Partnership with TEGoVA and the IRRV INTRODUCTION Applies to all circumstances Applies to valuations prepared prior to, and in contemplation of, a new loan, a renewal or an additional loan Lending institutions rely on sound valuations It must take account of, among other factors: -The purpose of valuation -The basis required by the client -The objective assessment of risk linked to the structure of the loan - The duration of the proposed loan facility

3. Defvas Project In Partnership with TEGoVA and the IRRV COMMENTARY ON LAND AND PROPERTY CATEGORIES Investment properties; Owner occupied properties; Development properties; Properties normally valued on the basis of trading potential; Wasting assets, mineral assets, etc

4. Defvas Project In Partnership with TEGoVA and the IRRV USUAL BASIS OF VALUE Market Value (MV), as the paramount basis of valuation Mortgage Lending Value (MLV) as defined in EU Legislation

5. Defvas Project In Partnership with TEGoVA and the IRRV APPLICATION OF MORTGAGE LENDING VALUE Mortgage lending value is distinguished between Market Value Differences between Market Value and Mortgage Lending Value Very stable markets Can be used as a risk management measure The assessment of Mortgage Lending Value

6. Defvas Project In Partnership with TEGoVA and the IRRV RESPONSIBILITIES AND OBLIGATIONS OF THE VALUER Valuers advising on matters relating to secured property lending must not undertake suck work unless, as a minimum, they can comply with the educational and experience requirements set out in EVS3. The valuer must be competent to give advice on comparative property and sector-related risks if this is required As far as the valuation is concerned, these matters relate to, and depend on, the type of property, property’s geographical or sector context, client bias and, particularly, on the effects of liquidation procedures in the country

7. Defvas Project In Partnership with TEGoVA and the IRRV FORCED SALES AND LIQUIDATION SALES Lending institutions may request valuations on a forced, or liquidation, sale basis or impose a time limit for disposal of the security It should be noted that, as sated in EVS2, such valuations do not meet the definition of Market Value Any circumstances where a valuer is requested to provide valuations on a basis other than Market Value, the valuer should proceed only if that valuation is not in breach of local laws or regulations.