I have seen reference to the view that failure to obtain a professional opinion of the value of uncertain consideration would be regarded as negligent by the purchaser leading to penalties and the extended discovery period. While this may be the case in some circumstances, would it also apply to ,say, a commercial lease with a market rate rent review in year 3 where the costs of such an opinion may be disproportionate.The opinion may not even be available given that it involves crystal ball gazing. Should we be advising clients to obtain a professional opinion in these circumstances?
The question of negligence would depend upon all the facts and an adviser would not automatically be negligent if he failed to obtain a valuation. It would be sensible however to advise the client in writing of the merit in obtaining a valuation. In cases where the amounts make a valuation difficult to justify, it may be sensible nonetheless to say to the client that ideally a valuation should be obtained but that the costs could be disproportionate. You could briefly explain the risks in not having one ie
makes it harder to justify the value later on if challenged, lose the protection of SP1/06 Langham v Veltema disclosure) and then ask the client for instructions. It is the client’s decision once advised of the risks and that way you will have protected your own position. It may be worth alerting the client also to the potential difficulties you allude to in actually getting a valuer to express an opinion.