Valuations Policy Change Update

Effective from 28 September 2015, there have been changes to the Australian Banking and Finance Industry Residential Valuations Standing Instructions.

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 requiring the valuer to set foot on the lot to make the valuation.

Valuers will potentially have to bear the additional time and cost burdens of undertaking the valuation in person on the lot, rather than from within proximity to it.

The RDC has expressed concerns that this will result in delays to development works, WH&S obligations, additional resourcing and conditionally around finance for developers.

The feedback from the RVI Group is that a common sense approach needs to apply, and where the valuer has difficulty identifying the lot then the valuer is required to locate and view the actual site on the ground and the surrounding area. This means the valuer is required to stand on; or immediately adjacent to; or at the front boundary of, a vacant allotment/proposed allotment in order to undertake a sufficiently comprehensive inspection of the vacant subject allotment.

Whilst it is not mandatory for the allotment to be pegged, the minimum requirements of an inspection should include having an appreciation of where the boundaries lie if not pegged, as well as an adequate appreciation of the aspect, outlook, topography/contour of the allotment and any nearby risks.

Developers have been looking into options using technology and ensuring that, where necessary, valuers are provided access during breaks in works on site. 

A working group comprised of industry and the RVI will meet in January 2016, to develop a resolution to this issue.