Ask The Experts - Surgery Valuations

Answer

I would surmise the vast difference in valuations could be due to one of two possibilities.  Firstly, it is essential to get a specialist valuer to undertake an appraisal of a medical centre, and it should not be undertaken by a general commercial valuer without the correct experience.  The specialist appointed needs to be able to assess quality in line with current NHS requirements and fully understand the workings of Notional Rent, rent abatement and PCT grants.  Secondly, a valuation can vary dramatically dependent upon the instruction given to a valuer.  For example, if one is looking at a converted residential dwelling and a valuer is instructed to assess the “Market Value”, one would have regard to the use of the property as a surgery (taking into account its quality, potential Notional Rent etc), but also its value to reconvert back to a residential house or, subject to planning enquiries, its redevelopment value.  In many GP Partnership Deeds, the valuer will however be instructed to have regard to its Market Value on the assumption that it is restricted to a use for GP surgery premises.  In such a scenario, the valuer would ignore any residential or redevelopment potential and it is often this that causes a substantial difference.

If, despite looking into the above, agreement cannot be reached, then most Partnership Deeds would contain a clause to determine a settlement either by the appointment of an Independent Expert or by the appointment of an Arbitrator.  If such Independent Expert or Arbitrator cannot be agreed between the parties, the majority of Partnership Deeds would allow for the appointment to be made by the President of the Royal Institution of Chartered Surveyors (RICS). 

The RICS operates a Dispute Resolution Service, and it is common to use this process (for example virtually all commercial leases have reference to arbitration via the RICS where rental values cannot be agreed).