AN EFFORT to iron out issues between the valuers’ profession and the banking industry, largely brought about by new lending regulations, is underway between the Royal Institution of Chartered Surveyors (Rics) and the Cyprus Banking Association, it was announced on Thursday.
Speaking to reporters at a working lunch, Maarten Vermeulen, FRICS, regional managing director for Europe, Russia, and the Commonwealth of Independent States, recounted discovering that both banks and valuers were “unhappy” with the tense relationship between them, and setting about to get the two groups together to hammer out solutions.
“Bankers were unhappy with inconsistencies in valuations and methodology, valuers complained that bankers don’t know what they are talking about,” Vermeulen said.
“One group was financially-minded, the other were property experts; they might as well have been on different planets. So I said, ‘fine, let’s bring them together and see what we can do’.”
Discussion brought issues like consistency, terms of engagement, methodology, and quality of available data, to the surface, and a list of actions was agreed.
“Some are easily solved, where it’s just a matter of ticking the right boxes, others obviously will take longer to address, involving government and other departments,” Vermeulen said.
Rics country manager for Cyprus and Greece Liana Toumazou noted that the friction was primarily caused by the “new reality” that has emerged post-crisis.
“There are several new regulations that have changed the way valuations are being done, and everyone needs to adjust,” she said.
Such changes have increased demand for valuations “maybe two- or even three-fold” in recent years, Toumazou said, translating to a lack of capacity on both sides – meaning valuers and banks.
But the real problem, it emerged from the discussion, lies with unreliable or insufficient data.
“Some of the data comes from the Land Registry, but as a government department it’s not very transparent – they have their own way of doing things,” Vermeulen said.
“Other data is compiled by the Central Bank of Cyprus, which it is not quite ready to share openly.”
Toumazou chimed in to add that even property owners may make life difficult – and the data unreliable – for valuers.
“Oftentimes, property owners may be reluctant to share information regarding their property, which obviously makes an accurate valuation that much harder,” she said.
“Things like rent income levels, or things as simple as allowing a valuer to enter the property and inspect its condition – when you’re talking about a loan restructuring, owners seem to believe that withholding information can work to their advantage.”
Such issues were aired at a “good, open, and honest” discussion on Wednesday, between professional valuers and the banking association, Vermeulen said.
In addition to the list of actions decided to be undertaken, Rics also plans to launch a Valuers’ Registration Scheme, into which all Rics-accredited valuers must register.
Under this scheme, independent auditors from other countries will arrive to Cyprus to review standards and procedures employed by local valuers, and offer advice on how to improve.
On completion of the inspections, valuers will be issued compliance certifications, Toumazou said.