Valuation reliance letter

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-06

// THE SHORT ANSWER

A valuation reliance letter is the valuer's written agreement that a named bank may rely on a valuation prepared for someone else, usually the borrower. A valuer generally owes its duty to whoever instructed it and is named in the report, so without reliance a bank lending on that figure may have no claim if it proves negligent. Many banks require a valuation from their own panel, addressed to the bank, or a reliance letter, before a loan is drawn.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.