Estimating The Reinstatement Or Replacement Cost In Valuation: A Case for the Estate Surveyor and Quantity Surveyor to Work in Tandem in Perfecting Valuation Briefs When Using the Contractor’s Method (Depreciated Replacement Cost Method) In Determining the Value of Properties (Published)
This paper seeks to highlight the need for Estate Surveyors and Valuers in Nigeria to improve on their current cost estimation techniques when valuing non-rent yielding and specialized properties using the DRC method of valuation and most importantly engage the services of Quantity Surveyors in ensuring that accurate cost estimates are provided for use in the valuation process. The research methodology adopted in actualizing the aim of this work made use of primary and secondary sources of data which included questionnaires and oral interviews. The measurement analysis of data made use of statistical tables and simple percentages. The postulated hypotheses on the other hand was tested and analyzed using the chi-square Statistic technique with a significance level of 5% (0.05). The findings showed that indeed there was a dearth of information on the part of Estate Surveyors and Valuers when it came to the knowledge and use of current cost estimating methods when valuing properties using the DRC method of valuation. These findings also highlighted the fact that the services of Quantity Surveyors most times are not commissioned when these cost estimates are to be determined for valuation, hence leading most times to properties being undervalued or overvalued. In a nutshell, the recommendations postulated dwelt on improving the cost estimating knowledge of Estate Surveyors and Valuers through seminars, symposiums and workshops organized by NIESV and NIQS, awareness of the need for Valuers to work with Quantity Surveyors to perfect valuation briefs involving the use of the DRC method and changes made to the curriculum of the study of the course Estate Management in tertiary institutions.
Keywords: Depreciated Replacement Cost, Estate Surveyors, Properties, Quantity Surveyors, Valuation