Critical review of a valuation report (seconde lecture)

You receive a valuation report, from the opposing party, from the court-appointed expert or from a professional instructed by a bank, and its conclusion seems questionable. Before commissioning a full counter-valuation, a seconde lecture (critical review) tells you whether the report holds up: is the property correctly described, is the valuation date the right one, are the comparables relevant and properly adjusted, are the rates justified, are the assumptions consistent, is the method appropriate? The European standards call this service a “valuation review”: the assessment of another expert’s report, taking the form of a review report.

The EVS specify its purpose: to assess the compliance of the work examined with the standards, to check the documents used and their proper use, to identify non-compliances and their effect on the conclusions. And its limit: the aim is not to provide a new figure, which would require a new valuation.

Where the rule comes from

EVS 4, § 7 of the EVS 2025 governs the valuation review: the reviewer must be a qualified expert, independent of the author of the report; the review note states the client, the purpose, the reviewer’s independence requirements, whether there were exchanges with the original expert, the assumptions adopted, and flags the information the reviewer did not have. The Charte de l’expertise en évaluation immobilière (the French property valuation charter) does not use the term, but its chapter 10 describes what a report must contain, which provides the reading grid, and its Title I, § 4.2, requires professional courtesy: criticism addresses the reasoning, never the person. In court proceedings, the parties’ observations on the expert’s work take the form of dires (written observations to the expert), provided for by the French Code of Civil Procedure.

In a valuation report

The review note follows the report examined point by point: instruction and standards announced, dates, description of the property and floor areas, legal and tenancy situation, sources and relevance of the comparables, adjustments, choice and parameters of the methods, consistency of the figures with each other, presentation of the conclusion. For each point, it distinguishes what is compliant, what is debatable and what is wrong, and measures the probable effect on the value, as an order of magnitude, without substituting itself for a new valuation. It serves to prepare written observations or a settlement, or to decide whether a full valuation is needed. It mentions the documents the reviewer did not have and points out that the reviewer did not visit the property, unless instructed otherwise.

Example

In an inheritance partition, an heir disputes a report concluding at €420,000 for an investment building. The critical review notes that three of the five comparables are sales of vacant buildings whereas the property is fully let, that the 4.5 % capitalisation rate adopted is supported by no reference, and that the floor area was taken from an old descriptive statement. It considers that these points, if corrected, could lead to a materially lower value, without fixing the amount. The parties then agree to a joint private valuation, which concludes at €365,000.

Not to be confused with

A counter-valuation is a complete new valuation, with a visit. Litigation support accompanies a party throughout a court-ordered appraisal. A desktop valuation gives a figure without demonstration; the critical review examines a demonstration without giving a figure.