VALUATION OF…
Restraint of Trade Servitudes
Servitudes restricting the use of a property for competing trade purposes, valued on the commercial benefit conferred to the protected party.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
A restraint of trade servitude is valued by quantifying the commercial benefit it confers on the protected (dominant) property — typically the reduction in competitive risk or the premium a trading business is willing to pay to exclude a competing use from a burdened property — rather than by reference to open-market rental or sale evidence of the burdened land itself.
The Big Five framework does not translate to this category; instead, the valuer should assess the restraint’s registered duration, geographic scope and the specific trade or use restricted, and estimate its value using the incremental trading benefit (turnover or profit protection) it provides to the dominant tenement, discounted over the servitude’s remaining term.
Because open-market sales of restraint of trade servitudes are rare, the valuation should be cross-checked against comparable negotiated restraint payments in similar retail or trade contexts, and against the diminution in value of the burdened property, where quantifiable.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Restraint of Trade Servitudes — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.