GUIDELINES FOR THE TRANSFER OF PROPERTY WITHIN THE SCOTTISH PUBLIC
SECTOR
Introduction
The transferee benefits from an off market transfer and the price of that benefit is the
transferee's undertaking to accept the value determined by the jointly appointed
independent valuer. These Guidelines provide a mechanism for the transfer of property
within the public sector that is economical, transparent and fair. It is designed to avoid
public bodies incurring unnecessary costs in relation to property that is already held within
the public sector.
Normally the parties cannot resile from the process following agreement to adhere to the
Guidelines. However, exceptionally, if there are major uncertainties in the process due to
structural, environmental or planning considerations or deficiencies in the title the parties
can agree beforehand in writing to allow one or both to resile, after making arrangements to
meet the other side’s abortive costs. Neither party may resile because they disagree with
the independent valuer's determination of value.
Transferors covered by the guidance in the Scottish Public Finance Manual are obliged to
accept the adoption of the Guidelines within the Final Notice internal advertising period. The
Guidelines may also be adopted by other public bodies at any other time by mutual
agreement. However, any surplus property that fails to secure the agreement of a
transferee to the adoption of the Guidelines should be placed on the open market.
The guidelines are also helpful where an acquiring body with compulsory purchase powers
would have used those powers but for the fact that the property (or part thereof) was
already in public ownership. The process results in the same outcome as a compulsory
purchase as the definition of market value in the transfer process is as defined by the
compulsory purchase code, but the parties save on professional costs as only one valuer is
appointed.
Principles
The procedure is a determination of value by a suitably qualified and experienced
independent valuer acting as an independent expert. The basis of the valuation shall be
market value as defined by the compulsory purchase code. The determination of value
made by the valuer under the procedures set out in these Guidelines is the price at which
the property would transfer. Any other valuation obtained by either party prior to entering
this process is to be viewed as indicative only.
The Valuer
The independent valuer used must be a professional member of an appropriate body, such
as the Royal Institution of Chartered Surveyors or the Institute of Revenues Rating and
Valuation, and suitably qualified with sufficient current local and national knowledge of the
particular market, and with the skills and understanding to undertake the valuation
competently.
The Guidelines are designed to avoid negotiation on price and associated delays and to
minimise administrative costs. The parties involved must therefore jointly appoint a valuer
and share the costs equally. The valuer must be independent of either of the parties to the
transaction.
If agreement on an appointment cannot be reached the Chief Surveyor at the Scottish
Government is willing to assist the parties reach agreement. All relevant procedures must
be followed in making the appointment. If the independent valuer's fee was likely to be in
excess of relevant limits the appointment would have to be put out to tender.
Additional Advice
In complex cases the valuer may require advice from experts such as building surveyors,
engineers, quantity surveyors or professional environmental adviser. Experts can be
appointed with the agreement of both parties and the fees shared equally between them.
The Procedure
The parties should appoint the independent valuer at the earliest opportunity. After
appointment the independent valuer will agree a timetable with the parties. The timetable
must include completion of the transfer within three months of the transferee agreeing to
adhere to the Guidelines, unless otherwise agreed by the transferor. The party held by the
independent valuer as being chiefly responsible for failure to meet the deadline will be liable
for all subsequent costs incurred by the other party in relation to the transfer or disposal of
the property. The independent valuer will invite both parties to submit any views on value or
matters affecting value in writing for his/her consideration. These views will not necessarily
include technical matters or the parties' own valuations. One of the purposes of using an
independent expert is to allow smaller public bodies who lack professional advice to enter
the process with confidence that the expert's expertise will cover any lack of professional
resources.
The independent valuer will present each side's written representations to the other to allow
any relevant comment on those representations/counter-representations. After due
consideration he/she will deliver his/her determination of value, with reasons, to both sides
and that value will form the basis of transfer.
In the event that the transferee has had a separate valuation prepared in order to assist in
their decision-making process, any such valuation must be viewed as indicative only and is
not to be regarded as the final valuation to be used for determining the transfer value. It is
the determination of value by the independent valuer that is used to establish the sale price.
Whilst the parties may have the opportunity to make submissions to the valuer during the
process, this determination is not negotiable.
The valuer will present his reasoned determination to both parties in writing.
Options
In simple cases where the value is low the parties may mutually agree with the independent
valuer to dispense with the representations and counter-representations to save costs. The
parties may also agree to dispense with the reasoned determination to reduce costs.
Planning Uncertainty
Normally the planning position will have been clearly established beforehand. However,
where there is planning uncertainty, or the potential for a windfall profit, the valuation shall
reflect the highest and best use that the local planning authority indicates it would be
prepared to approve.