Valuation companies can no longer mediate | Article published in the newspaper Sol, November 26, 2015
Valuation companies can no longer mediate
The new law that regulates the activity of expert property appraisers brings more transparency to the market, as well as more quality and accountability. It came into force on the 13th.
Last Friday, November 13, the new law that regulates the access and exercise of the activity of the real estate appraisers that provide services to entities in the financial system of the banking, securities, insurance and reinsurance sectors and of the funds entered into force of pensions.
Among the main changes in the legislation is the fact that the activity of expert property appraiser is now limited to those registered with the CMVM – Comissão do Mercado de Valores Mobiliários (Securities Market Commission).
SOL was to understand how the new law has consequences for the real estate market. According to the lawyer Nuno Sá Carvalho, responsible for the Real Estate and Construction area of the law firm Cuatrecasas, Gonçalves Pereira, with the approval of the new regime, the real estate appraisers became subject to a control procedure regarding access and the exercise of your activity. Within the scope of this control, several criteria and mechanisms were established, which will certainly benefit all consumers and players in the sector.
The official adds that, in addition to the measures related to the independence, qualification and experience of the experts, the responsibility of the experts for errors or omissions in the evaluation reports also stands out, as well as the joint and several liability of the contracting entities.
On the other hand, Nuno Sá Carvalho points out that requirements have also been established that provide greater security to market players, such as the case of professional indemnity insurance, contracted in favor of injured third parties, or the fact that the remuneration cannot depend directly or indirectly from the appraised value or value of the property.
“Finally, it should be noted that the new law establishes a sanctioning regime for breach of the duties provided for in the law, with fines of up to 300 thousand euros, which seems to be a deterrent to any harmful acts by consumers,” he admitted to SOL.
For João Fonseca, an expert property appraiser, this measure standardizes the legislation, which was previously dispersed among several documents. «Not formally, after all, it regulates all the activity of expert property appraisers. I recall that there are other entities that require appraisers to be registered with the CMVM. An example of this is the Order of Statutory Auditors and the Order of Certified Accountants,” he explained to SOL.
Greater transparency for the market
João Fonseca affirms that the new law brings greater transparency to the market and also more quality and accountability. The expert guarantees that the legislator had the courage to separate the valuation and mediation of real estate very clearly. «For example, from now on, property valuation companies for financial system entities will also not be allowed to mediate the sale of any properties owned by these entities. In this regard, national legislation is more demanding than some international institutions linked to the evaluation of real estate », he stressed.
On the other hand, it will also require that all appraisers are registered with the CMVM and have a link to the contracting entity. Subcontracting was also prohibited.
The expert ensures that, by defining very precise and very transversal rules of knowledge, with a minimum level of credits for access to the profession, it will clearly bring more rigor and more competence.
«There is, however, an aspect where the legislation could go further, which was the requirement for a minimum number of hours of accredited training annually, and also the requirement that all experts have the 45 credits required by the legislation», he underlined.
João Fonseca also assured that the new requirements, such as the mandatory existence of professional activity insurance for each appraiser and minimum training, will end up driving some technicians out of the market.