1. When establishing benchmark land values, RICS members are required to report a site’s current use value, alternative use value, the landowner premium, market evidence, and all supporting considerations, assumptions and justifications. Reflecting recently revised Planning Practice Guidance (PPG) on viability, members are advised that "price paid is not allowable evidence for the assessment of benchmark land value and cannot be used to justify failing to comply with policy".
2. RICS requires members to maintain a "clear distinction" between the preparation of viability assessments and any subsequent negotiations over planning obligations. "This distinction is to retain the objectivity and impartiality of the origination and review of a financial viability assessment and to clarify where respective parties, or their practitioners, are seeking to resolve differences of opinion by comparison with subsequent negotiations," it says.
3. Viability assessments must be accompanied by non-technical summaries "so that non-specialists can better understand them". Summaries must include "key figures and issues that support the conclusions drawn from the assessment" and should be consistent with the PPG.
4. When preparing viability assessments, RICS members are advised they must prepare a statement confirming that "no performance-related or contingent fees have been agreed" and confirm that no conflicts of interest exist. Before accepting instructions, members are required to declare whether they are advising, or have previously advised, the applicant or planning authority on a planning application or are providing ongoing advice on area-wide financial viability assessments.
5. The statement advises that viability assessments should be published in full, except "where information may compromise delivery of the proposed application scheme or infringe other statutory and regulatory requirements". Any exceptions "must be discussed and agreed with the local planning authority and documented early in the process". The requirement is a departure from previous RICS guidance on viability assessments which advised these were often "required to be classified as confidential in part or as a whole".
Last year, a north London council and the capital's deputy mayor for housing wrote an open letter to RICS urging it to rewrite its separate Financial Viability in Planning (2012) guidance note in the wake of a High Court ruling on viability. RICS has committed to do this.
Speaking to Planning, RICS associate director, Tony Mulhall, said: "We hope to go to consultation [on the revised guidance note] at the end of June. Given the holiday period, realistic publication date is likely to be September."
The professional statement document can be found here.