COVID-19 VALUATION PROTOCOLS
PROPERTYPRO 2020 LAUNCH PUSHED BACK TO 10 MAY 2020
Given the evolving COVID-19 Crisis, the API continues to work with our industry stakeholders to develop and further refine the API Valuation Protocols issued March 30th 2020.
As you are aware, the intent of this suite of documents was to adapt and innovate to agree on a framework to address situations where a full physical inspection is unable to be undertaken due to both health and government restrictions at this time. Whilst there is rarely a 100% perfect design at Day 1, we remain flexible to working through each matter as it arises, developing further communications, education and information tools and are very grateful for the feedback to assist us as an important part of the broader sector to address the Health, Economic and Employment crisis facing Australia. We will continue to share information with you as it comes to hand. It is our goal to have as many of our members survive this Crisis as is humanly possible.
The Addendum to the ABFI Standing Instructions dated March 30th 2020 is attached for information and can be found on our Website. The Addendum covers the steps that should be taken and the hierarchy applicable when undertaking a non-physical valuation.
For absolute clarity:
- This protocol intends that all existing standards, risk management and quality assurance procedures remain in place to ensure the integrity of the Valuation being carried out;
- All due diligence, research and analysis requirements for BOTH EXTERNAL AND INTERNAL ASSESSMENT that would ordinarily form part of a full valuation is expected, with the exception of the formal full physical or personal inspection;
- FOR RESIDENTIAL PROPERTY – An INSPECTION HIERARCHY is now acceptable in relation to the carrying out of Valuations, Where Full Physical Inspection of the property is not possible, EXTERNAL INSPECTION may comprise:
- A full external onsite inspection of the property, including but not limited to a complete walk-around of the main building and ancillary improvements.
- A partial external inspection of the property for areas that are assessable but at a minimum from the road frontage. This may be conducted from the vehicle to avoid face to face contact and/or maintain social distancing stipulations.
- Virtual external inspection of the property utilising satellite imagery and/or video conferencing technology. Note, in these instances the technology must include geo-positioning capabilities or similar that enables confirmation the correct property has been identified. Valuers must at all times comply with relevant regulatory and local laws (for eg. CASA) in respect of Drones and other tools.For the avoidance of doubt, the valuer should attempt each of the above alternate practices in order of hierarchy 1 to 3. If none of the above is possible the Valuer should not continue and the instruction should be referred back to the Instructing Party/Client.The valuer must clearly identify within Section 8 “Additional Comments” the extent of external inspection conducted and alternate resources that have been relied upon.
- The valuer should undertake best efforts to identify the INTERNAL layout, specifications and condition of the property. In the first instance, the valuer should identify the availability of any of the following sources:
- Prior valuation reports conducted by the valuer firm.
- Photos from real estate portals
- Photos from sales databases and/or similar subscriptions
- Discussion with the homeowner/occupant or real estate agents
- Photos and/or videos captured by the home occupant through a technology platform that enables verification of location (e.g. live virtual inspection).The valuer must clearly identify within Section 8 “Additional Comments” what alternate resources have been relied uponIn the instance where there are no alternate resources available, the valuer should exercise professional judgement and assume a standard commensurate with the age, condition and market of the property. This assumption should be clearly stated within Section 8 “Additional Comments”.
- In relation to Commercial and other Reports, where full physical inspection of the property is not possible the use of the wording “Restricted or Indicative Access Inspection” – DO NOT IMPLY anything additional or new, nor do they require any additional report, assessment or inspection type. Where a Valuer cannot physically inspect or access the property due to denied, restricted or limited access, the valuer should include qualifying statements to that effect in the Valuation Report. All due diligence, research and analysis requirements that would ordinarily form part of a full valuation is expected. Nothing in these Special Instructions intends to change Minimum Valuation expectations or reduce the standards by which valuers must carry out their valuations.
It is also critical that members adhere to the following principles when conducting valuations under the Valuation Protocol:
- Do not undertake the non-physical inspection without written agreement from the client;
- The Disclaimer outlined on our Valuation Protocol – Significant Valuation Uncertainty must be included in ALL VALUATION REPORTS during this time.It is also important to note that The Addendum Instructions only override the ABFI RVSI to the extent of any inconsistency. All other provisions and stipulations in the ABFI RVSI remain in force. PropertyPro reports must still comply with, and be read subject to, the PropertyPro Supporting Memorandum, as amended by this Addendum and the API’s Valuation Protocol – Guidelines for times of crisis and/or State of Emergency impacting physical inspection of real property.
For those members who are Woodina clients, we have worked closely with Michael Wood of Woodina to achieve agreed policy wording endorsement clauses that he is passing through London overnight. These relate to the terms of our Valuation Protocol in their entirety in respect of the recommended Client prior agreement/instruction and the Uncertainty Disclaimer. We will have confirmation of this out to you tomorrow morning.
We have created a new COVID-19 Standards and protocol hub which houses all relevant information relating to the practice of valuation and provides any technical updates to practice as a result of the COVID-19 crisis.
Tomorrow, 1 April, we have scheduled a free member webinar API Member Support To Navigate the Impacts of COVID 19 which will include a discussion on the new COVID-19 Valuation Protocol and applicable API Standards.
PropertyPRO 2020 Postponement
The API advises that due to recent issues surrounding the COVID-19 crisis and feedback received from valuation firms and industry stakeholders the decision has been made to postpone the ‘go live’ date for the release ‘new’ PropertyPRO Supporting Memorandum until Sunday 10 May 2020.
I, like many of you, am concerned for what the future holds. However, after seeing the willingness to innovate and the support from around the industry I am proud of what we have achieved as a sector. Valuation will be increasingly critical to the ongoing economic recovery and long term sustainability of Australia, so it is imperative that we continue to find new ways of delivering our services to the community.
I hope you and your families stay safe during this time and encourage you to reach out to your local Member Services Manager should you need.
Posted on May 6, 2020