Proactive compliance visits - Land valuers

This publication is for: 
Commercial tenancyProperty industry

Consumer Protection staff organise regular proactive compliance visits to licensed or registered people throughout the state.  The visits aim to ensure the laws are followed, help educate what the laws means on a practical level and provide information about changes.  

If you would like more information please contact the Consumer Protection Advice Line team on 1300 304 054 or by email.

Preparing yourself

Objectives of the programme

The Department of Commerce has an initiative to “conduct and promote education and provide advisory services for persons who are licensed or registered” under the authority provided by the Fair Trading Act 2010.

The Department’s proactive compliance programme aims to encourage high levels of compliance with the requirements of the Fair Trading Act 2010Land Valuers Licensing Act 1978, Land Valuers Regulations 1979 and Land Valuers Code of Conduct resulting in:

  • greater understanding by licensed valuers of the laws which govern their activities;
  • the achievement of consistently high ethical and professional standards in the industry;
  • fair and open competition because all valuers compete on the same “level playing field”;
  • enhanced consumer protection because of high ethical and professional standards; and
  • the delivery to valuers of compliance tools including checklists, references, manuals and compliance systems.

How the visit is conducted

A proactive compliance visit includes:

  • meeting with the licensed valuer;
  • review of supervision of unlicensed personnel, including students and assistants;
  • review of risk management programme;
  • review of compliance with remuneration notice;  
  • review of a sample of a valuation:
    • check client instructions;
    • competency: knowledge of the locality/subject matter;
    • check details in valuation; relevant facts ascertained and verified;
    • procedures for proposed; developments "as if complete";
    • review assumptions / conditions / limitations;
    • valuation report is signed by LV and includes licence number.

What you will need

To ensure the visit is conducted with the minimum of disruption to your business operations we would be pleased if you would have the following available at the appointed time of our visit:

  • The Business Name Registration Certificate displayed (s.20 Business Names Act) (if applicable);
  • Your risk management programme / policy;
  • Certificate for risk management module attendance;
  • A printed copy of a sample of a recent valuation report.

It is suggested you review the following prior to the visit:

Proactive visit checklist

A copy of the official checklist form can be emailed to you on request when the visit booking is made. The checklist covers the following items:

Land valuers (LV) proactive visit checklist
Description Legislation
Licensing / records 
Prior to the visit check complaint  database to ascertain any current complaints  or deficiencies  in operations. BP
Check CALS to ensure that the valuer has a current LV
licence.
LV Act s.23(1)
On site, check for any changes in particulars  contained  on the Register LV Regs
R.7
General
Obtain a copy of LV assistants report. What system is in place to provide adequate supervision of students and assistants who are carrying out work, and how do valuers & assistants ensure they have complete knowledge of the Acts? (SLP) LV Act s.23(3)
Code rules 4 and 14
What system is in place to ensure that every person employed in or engaged by the business whether paid or unpaid complies with - (a) the provisions of the Act, the Regulations and the Code as are applicable; and (b) any other law applicable to the business and the person? Code rule 14(2) and rule 14(3)

Risk management

Obtain a copy of the Risk Management certificate and or course content to ensure it includes the following —
(a) appropriate professional indemnity insurance;
(b) documented compliance procedures including an
internal disputes resolution process;
(c) training systems for any employee(s);
(d) participation in continuing professional development.

Code rule 23
What quality assurance system is in place to ensure advertising of LV skills and services are accurate, and valuations conducted do not contain anything that is likely to mislead? E.g. comparable sales for value of the property. Code rule 12
Remuneration
19 - Costs disclosure 
Obtain a copy of a completed file & view - Instructions were in writing, check quotations and invoices to ensure that there is a cost disclosure provided to clients before being appointed. Does the service amount disclosed include disbursements?

Code subrules 19(1), 19(2) and (3)   

Code rule 20(1), rule 20(2)(a),(b),(c), (d), rule 22  

Client's instructions 
Retaining documents and information
What procedures are in place to ensure the following are retained for at least 6 years from the date a valuation report is issued  — 
 (a) a copy of the valuation report;
 (b) all instructions received from the client or the client’s representative relating to the valuation report; 
 (c) all other records and information on which the valuation report was based.
Code rule 24
Confidential information
How does the LV treat information obtained while performing work for a client that —
(1) (a) is by its nature confidential; or
 (b) was specified as confidential by the person who  supplied it; or
 (c) is known by the licensed valuer to be confidential.
(2) A licensed valuer must also treat as confidential a valuation prepared for a client that has not been made public. 
 (3) Any information or valuation to be treated as confidential under subrule (1) or (2), must not, directly or indirectly, be disclosed by a licensed valuer to another person, unless — 
 (a) the disclosure of the information or valuation is required by law; or
 (b) the client is fully informed of the proposed disclosure and agrees to it in writing.
Code rules 9 (1), (2) &(3)
Valuation
Competency 
What type of valuation work is the LV trained in, are there any other valuations undertaken, if so what type of training is provided or systems in place to ensure a licensed valuer must not perform valuation work for a client beyond the licensed valuer’s competency. 
Code rule 13 (1),(2) & (3)
Valuation methodology
View valuation report to determine if the licensed valuer has taken all reasonable steps to gather sufficient relevant data in forming an opinion (due care, skill and diligence) or in the absence or deficiency of data explain the basis on which the opinion of value was formed. (Highest and best use)
Code rule 26(1)
Valuation methodology
View the valuation report to ensure the licensed valuer has ascertained and verified 
all relevant facts and information that a 
prudent licensed valuer would ascertain or 
verify in order to provide a professional 
valuation of land for a client e.g. obtained a Certificate of Title search.
Code rule 26(2)
FOR DESKTOP OR CURBSIDE INSPECTIONS 
Obtain instructions to ensure LV has a written agreement from the client to not personally inspect the property and has made written disclosure if not inspected or partially inspected, and stated the effect that the failure to conduct an inspection or a complete inspection has on the valuation provided
Code rule 25(1),(2)(a)(b) and (c)
Valuation methodology View valuation report to ensure the licensed valuer has not produced a valuation report that purports to predict a future value or future values. Code rule 26(4) and (5)
View the valuation report for a proposed development, to ensure the licensed valuer has included — (a) in the valuation report the definitions of as if complete valuation and as is valuation as set out in rule 3(1); and (b) an as is valuation immediately following the as if complete valuation in — (i) the valuation report; and (ii) any certificate of valuation or other valuation summary in the report or attached to it.  Code rule 25 (5)(a) and (b)
(Long Form reporting) Include in the valuation report an Executive Summary in the form of Schedule 1 of the Code Code rule 25(3)(a)
Check long form valuation report for the following details to ensure included within the report:  
The date of inspection(s), the interest to be valued e.g. freehold, leasehold etc., valuation date, date report issued. Valuer has signed the report and recorded his/her license number Code rules 25(3)(a), (b), (c), (d,)(e) and (f)
A statement under the heading of "Assumptions, Conditions and Limitations", of all assumptions made in arriving at an opinion of value. All conditions, requirements or limitations re instructions or any other reason Code rule 25(3)(g)
Where the valuer has an interest of any kind, directly or indirectly in the property to be valued, a statement describing the nature and extent of interest Code rule 25(3)(h)
Particulars of any conflict of interest that are provided to a client or prospective client Code rule 16(2)(a), 16(4)(a) and 17(a)
Accurate description of property improvements and condition Code rule 7(1)  and (2)
Information from other sources quoted correctly Code rule 7(1)  and (2)
Valuation method used (i.e. Valuation and Property Standards of API) Code rule 7(1)and (2)
Includes adequate comparables sales evidence, prior sale of the property etc Code rule 7(1) and (2)
Includes risk analysis Code rule 7(1) and (2)
Conflicts of interest
What system is in place to ensure the business checks instructions from clients to be aware if a conflict between an interest of the client and an interest of another client of the LV does not exist? Are clients fully informed in writing if there is a conflict, and does the client agree in writing to the valuer performing the work? Code rule 16(1), (2), (3), (4) and (5)
What system or training is in place to ensure a licensed valuer is acting with impartiality and independence. Without limiting the generality of subrule (1) — (a) a licensed valuer must not be influenced by a client, or any other person with an interest in the valuation work, when determining the content or methodology of a valuation; and a licensed valuer must act with impartiality and independence when acting as an expert witness in a litigious matter.  Code rule 18(1) and (2)
View instructions and the date of when the valuation report was issued to the client as a licensed valuer must perform valuation work for a client - (a) within a reasonable time after receiving the client's instructions:and (b) in accordance with the client's reasonable instructions Code rule 11(a) and (b)
Does the LV recommend a third party service provider to their client? Is a written disclosure of relationship provided? Has the client been referred by a third party? Has LV disclosed commission or fee for referral accepted or paid? Code rule 21(1) and (2)

 

 

Consumer Protection
Checklist
Last updated 08 Sep 2017

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