New standards for South African property valuation
Valuation is one of the key areas of practice for Royal Institution of Chartered Surveyors (RICS) qualified professionals. In response to the last global financial crisis, RICS developed a regulatory monitoring initiative, known as Valuer Registration (VR).
“The Valuer Registration scheme sets out an approach to raise confidence in the delivery of valuation advice and reinforce the highest professional standards in property valuation, a key component underpinning most economic activity,” says TC Chetty, country manager for RICS South Africa.
“RICS’s main objective with this initiative is to reinforce the quality and accuracy of valuations, while raising consumer confidence in the profession and, through effective regulation, minimising the risk associated with property valuations.”
Chetty says in order to ensure globally consistent standards in valuation, the institution publishes RICS Valuation Standards. Also known as the “Red Book”, these standards are mandatory for RICS professionals and RICS regulated firms, and apply the requirements of international valuation standards.
Implemented as a mandatory scheme for all RICS members undertaking valuations in, amongst others, the UK, Netherlands, France, United Arab Emirates, Caiman Islands and Hong Kong, RICS Valuer Registration was launched in June 2016, and on a voluntary basis for any RICS valuer practicing in South Africa.
Following consideration by the RICS governance structures and the RICS Regulatory Board, RICS Valuer Registration will become mandatory for all member valuers working in the field in South Africa from 1 February 2017.
“Valuer Registration provides regulators, lenders, asset managers and investors in the market with a clearly identifiable designation for the best regulated and qualified valuation professionals, as RICS members welcome open scrutiny and comparison with industry best practice,” says Chetty.
“It follows that making this mandatory in South Africa from 1 February next year will reinforce transparency and enhance market confidence.”
In an increasingly global and competitive business environment, Chetty says international property valuation standards are essential to facilitate greater transparency, and through effective monitoring, the Valuer Registration scheme will demonstrate compliance with existing international standards.
While RICS members are regulated, registered valuers are subject to a specific monitoring that begins as soon as members sign up to Valuer Registration. An automatic risk score is established for the individual member, and should any risks come to light, RICS will conduct further enquiry, including checking information against Red Book requirements, processes and audit trails that the Registered Valuer has in place.
“The South African valuation industry has made good progress in the implementation of global valuation standards in recent years, but, as valuers, we are more accountable than ever,” says Claire Everatt, head of Valuations at Eris Property Group.
“The additional transparency that VR seeks to offer is vital in ensuring that we continue on this trajectory towards international best practice.”
In line with valuer registration being made mandatory for South African valuation professionals, RICS South Africa plans to provide additional information webinars and half-day technical workshops during October and November of this year (2016). These will be open to South African valuation professionals and RICS members.
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