Limitation of Liability Scheme
The Australian Property Institute Valuers Limited (APIV) is a company established by the Australian Property Institute (API) as a special purpose company. Membership is restricted to Members of API who undertake valuations of real property, as the Scheme was established to procure registration of the company for the benefit of its Members under the Limited Liability Scheme (the Scheme). Operated and approved by the Professional Standards Council (PSC), the APIV Scheme is pursuant to professional standards legislation in various jurisdictions across Australia under the Professional Standards Act 1994 (NSW).
Mutual recognition provisions in the legislation mean that the Scheme operates in all jurisdictions in the country with the exception of Tasmania. The PSC gave approval for the Scheme to commence from 1 September 2010 and the establishment of administrative structures meant that the Scheme was available to members from 1 December 2010.
The Scheme is administered through APIV, a company limited by guarantee, established by the API as an occupational association for members of the valuation profession.
About the Scheme
In essence, the Scheme will cap the occupational liability of participating APIV Members to an amount between $1 million and $10 million, depending on the Upper End Value of the property being valued, and to the extent that liability can be limited under the respective State or Territory legislation.
Participating in the Scheme
The Scheme applies to all members of the APIV Limited. A condition of membership of the APIV is that a person must also be a Member of API. Therefore, the following Members of API will be eligible for the scheme:
- Life Fellow Member (who holds the certification of Certified Practising Valuer)
- Fellow Member (who holds the certification of Certified Practising Valuer)
- Associate Member (who holds the certification of Certified Practising Valuer)
- Provisional Member (who holds the designation of Residential Property Valuer)
In addition, only Members of API who reside in Australia and undertake the valuation of real property will be members of the APIV Ltd. The API holds the view that only Provisional Members who hold the designation of Residential Property Valuer have the requisite knowledge and experience to undertake valuations of residential property in their own right. Further, the API holds the view that only Associate, Fellow and Life Fellow Members who hold the certification of Certified Practising Valuer (CPV) have the requisite knowledge and experience to undertake valuations of all classes of property/assets in their own right.
An Application Form regarding participation in the Scheme is available from the Resources section below under APIV Professional Standards Scheme Resources. The Application Form must be completed in full and returned, together with payment, in order for processing to be completed.
In brief and by way of example, for members of a firm which undertakes valuations of real property to gain the full benefit of the Scheme and the limitation of liability, all valuers (that is, any API Member who undertakes valuations and who is a Life Fellow, Fellow or Associate Member of the API who is also a CPV or who is a Provisional Member of the API who holds the Residential Property Valuer designation) within the firm would need to be Members of the APIV Ltd and have completed the notification form. Please note that this is crucial.
The Professional Standards Council (PSC) requires that each occupational association with a Limitation of Liability Scheme, such as the APIV Ltd, audits its members on each Scheme’s compliance requirements.
Exemptions from participation in the Scheme
The information in this section is subject to the disclaimer on the Important Notice page.
To obtain an exemption from participation in the Scheme, an application must be made to the APIV. As there is no Application Form available at this stage, an email application attaching the supporting evidence for the relevant exemption category is sufficient.
The APIV may, in its absolute discretion, grant exemptions (upon the applicant providing appropriate evidence), in the following categories:
- Non-practising valuer – A non-practising valuer for the purpose of the APIV Scheme is a member who does not undertake valuations of real property and does not receive any fee, retainer or income from valuations of real property;
- A valuer employed by an Authorised Deposit-taking Institution (within the meaning of the Banking Act 1959 ) (ADI) or an entity which carries on State banking (within the meaning of paragraph 51(xiii) of the Constitution);
- A valuer who is an employee of Commonwealth/State/ Local Government and who only provides valuation services for the Commonwealth/State/Local Government’s internal purposes;
- Sole trader/Firm who derives 100% of its income from Commonwealth/State/Local Government contracts on a non-recourse basis; and
- An Applicant is able to satisfy the APIV that it is necessary and/or desirable, for the Applicant to be exempted from participating in the Scheme.
Note: The 2010 – 2016 Scheme (which ended on 31 August 2016) also provided an exemption category of “Financial hardship’ applicable where a person would suffer financial hardship in obtaining PI insurance to the levels required by the Scheme. That exemption category ceased upon the expiration of the 2010 – 2016 Scheme.
Discretion of the APIV to grant / reject Exemption Applications
The APIV can grant or refuse an application for exemption in its absolute discretion.
Consequences of being granted an exemption from participation in the Scheme
If an exemption is granted under any of the above categories, the person will not be able to rely on the Scheme to limit their liability if a claim is brought against them.
Duration of Exemptions
Unless otherwise approved by the Board, all exemptions are granted on a twelve (12) month basis. Members need to reapply for exemption each year.
Exemptions granted to an individual valuer are only valid while the applicant remains employed by or contracted to the employer or principal stated in the Exemption Application. In the event that the valuer changes employers or commences to undertake work as a contractor to a new/additional firm:
- the exemption would not apply in respect of work undertaken on behalf of any other firm.
- if eligible, the applicant should apply for a new exemption in respect of the new employer or new/additional principal.
Change in circumstances during the Exemption period
Applicants whose circumstances change during the exemption period must immediately advise the APIV of such change in circumstances. A change in circumstances may result in the revocation of the exemption.
Consequences of failure of eligible members to join the Scheme or obtain an exemption
If a person is eligible to join the APIV Scheme, but does not do so, that person’s API membership status may be affected as they would be in breach of section 15 of the Membership Policy (formerly API By Laws).
Breaches will be dealt with via the API / APIV complaints process pursuant to the API Complaints Policy.
Resources for APIV Scheme Exemptions
- Statutory Declaration – ACT
- Statutory Declaration – NSW
- Statutory Declaration – QLD
- Statutory Declaration – NT
- Statutory Declaration – SA
- Statutory Declaration – TAS
- Statutory Declaration – VIC
- Statutory Declaration – WA
- APIV Exemption Application Letter Template