ADVOKS GLOBAL · KENYA
The Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations
111. Appointment of a valuer
Edition: 2023-10-06 · In force
111. Appointment of a valuer
(1)The trustee shall, in consultation with the REIT manager—(a)prior to making an application to the Authority for authorization of a scheme, appoint a valuer to value the real estate assets which have been vested in the trust or acquired or are proposed to be acquired by trustee;(b)ensure that, where necessary, an additional, alternative or substitute valuer is appointed on a timely basis in the event of—(i)the retirement, removal or the valuer otherwise ceasing to act;(ii)the valuer not being qualified to act; or(iii)an additional valuation report being required; and(c)where the real estate investment trust has assets which are not real estate assets and which are not in the form of cash, bank deposits or listed securities,appoint a suitably qualified specialist independent professional valuer to undertake the valuation of those assets.(2)The valuer shall be appointed for a term of not more than three years and, except with the prior approval of the Authority, shall not be reappointed as valuer of the scheme at the conclusion of such term or until the lapse of three years from the date of expiry of any prior term.(3)The trustee shall, in consultation with the REITManager and where—(a)for any reason, or in respect of any acquisition or disposal or a specific transaction, the valuer ceases to be independent; or(b)the trustee is of the opinion that, given the nature of the asset the valuer does not have the required skills,appoint another valuer for the specific purpose of conducting the required valuation.(4)A person qualifies to be appointed as a valuer of real estate assets if that person—(a)is registered and licensed as a valuer under the Valuers Act (Cap. 532);(b)is independent and does not have a conflict of interest;(c)provides real estate and other property valuation services on a regular basis;(d)carries on business of valuation of real estate in Kenya;(e)has been a member of the Institution of Surveyors, in good standing, for a period of at least of five years; and(f)has in place and maintains professional liability insurance to cover its obligations.(5)Where a specialist valuer is appointed in respect of assets other than real estate, only the provisions of paragraph (4)(a) and (f) shall apply to that valuer.(6)A valuation report prepared by a valuer under these Regulations shall be addressed to the trustee and expressed to be for the benefit of the trustee as trustee of the real estate investment trust and the REIT securities holders as beneficiaries of the real estate investment trust.(7)A trustee shall not appoint a valuer in respect of more than one scheme that is managed by the same REIT manager.(8)A valuer shall not be considered to be independent under paragraph (4)(b) if—(a)that valuer falls within the definition of a connected person;(b)the valuer or its partners, directors, officers or key personnel hold REIT securities in the scheme;(c)the valuer has financial, professional or other interests that could affect the ability of the valuer to render unbiased professional services to the trustee in relation to the scheme or its assets including any assets that it consider acquiring; or(d)in the case of a valuation that is conducted in connection with the disposition, acquisition or proposed disposition or acquisition of an asset, the valuer has, within the two years immediately prior to the date of the valuation, undertaken or been retained to provide a valuation for the counterparty or proposed counterparty to the disposal or acquisition.(9)A valuer shall—(a)include in any valuation undertaken by that valuer, a declaration as to its independence and evidence of its up to-date professional liability insurance; and(b)on request, submit to the trustee a declaration and evidence of the up to-date of insurance for inclusion in any periodic report that the trustee is required to prepare.(10)A valuer shall inform the trustee immediately if the valuer becomes aware of any potential conflict or event that would cause the valuer to cease being independent, or cease to satisfy the requirements of this Regulation generally or in respect of a particular or proposed valuation, disposition or acquisition.(11)Where any valuer appointed under this regulation—(a)ceases to be independent or qualified for appointment, the valuer shall retire and the trustee shall, in consultation with the REIT manager, within a period of thirty days, appoint a new valuer; or(b)ceases to be independent in respect of a particular or proposed disposition or acquisition or notifies the trustee that it does not satisfy the requirements of these Regulations, the trustee shall, in consultation with the REIT manager, appoint an alternative valuer to act in respect of that particular transaction and any subsequent valuations required in relation to that particular asset.