Changes to ABFI Residential Valuations Standing Instructions
Effective from 28 September 2015, there have been changes to the Australian Banking and Finance Industry Residential Valuations Standing Instructions. These changes have been implemented without consultation with the broader industry, and have come as a surprise to many.
The Residential Valuation Industry Group (RVI) in co-operation with the API agreed to the inclusion of a new section titled ‘Vacant Residential Land’ within the ABFI Residential Valuation Standing Instructions. The new section is located on page 9 of Version 1.1.3 of the Standing Instructions.
The Vacant Residential Land section sets out clear inspection requirements for registered and unregistered vacant residential land. The requirements include that the Valuer “identify and physically inspect the subject allotment (this means a sufficiently comprehensive inspection of the subject allotment to enable the valuation to be completed in accordance with accepted valuation practice).“
Further, Valuers are instructed that “if you have not identified and physically inspected the subject allotment you should not submit the valuation and refer the request to the instructing party.” Under no circumstance is a Valuer to complete a valuation and indicate in the report that “identification was not possible”.
Identification of the land may be possible via various means, including pegs in the ground or measuring the distance from known points.
Valuers are advised that if they do not have sufficient means to identify the subject allotments to not proceed with the valuation and refer the request to the instructing party. Similarly, if access is not available (e.g. the development is fenced off) and they are not able to identify and physically inspect the subject allotment, they are not proceed as per the new instructions.
For further information on the requirements for the inspection of vacant residential land please view the revised ABFI Residential Valuation Standing Instructions, Version 1.1.3, effective from 28 September 2015.
Nick Proud, Executive Director, Residential Development Council (RDC) has discussed the new standing instructions with the RVI at its full meeting on 8 October. Further meetings between the RDC and the Australian Bankers Association, the RVI and the API will be held shortly with the aim of ensuring that unintended negative impacts on residential developers and builders are avoided.
There are a range of alternative solutions being considered currently, and RDC will continue to work with all stakeholders to ensure a workable, practical solution is realised, and updates will be provided by RDC in due course.
Members are encouraged to provide feedback on the impact the changes are having on their business to RDC Policy Manager, Katharina Surikow via email by Friday, November 13.