Following a consultation process with the major users and providers of this product, the Australian Property Institute has issued a revised Restricted Assessment Supporting Memorandum (click here) and Proforma (click here) effective from 1 July 2014, although earlier adoption is encouraged.
The revision brings the document into line with current industry practices and the Australian Banking & Finance Industry Residential Valuation Standing Instructions for PropertyPRO, Restricted Valuation and Progress Inspection Reports.
- In line with PropertyPRO, the product is suitable for first mortgage purposes only.
- Greater clarity provided around the restrictions on the provision and use of a restricted assessment.
- Limitations and requirements of a restricted assessment – including the provision of a photograph of the front of the subject property as part of the report; recent comparable sales not only from existing records held within the office, and a minimum of three recent sales to be presented and retained on file for comparison purposes in the event of future audit. Details of these sales can be provided to the client on terms acceptable to the parties.
- The provision of a indicative market rental range estimate.
- General comments on location and amenity of the subject property.
- The provision of risk ratings in line with the PropertyPRO Supporting Memorandum methodology.
The Australian Valuation Standards Board agreed there should be no requirement for a supervising valuer to sign off on this product. However, while there shouldn't be a requirement for a supervising valuer to sign off, the Board believed it would be good practice to include some form of quality review consistent with the valuation firm's usual practices.
Should members be currently providing restricted assessments which do not include all the requirements of the revised Supporting Memorandum, appropriate fees and turnaround times will need to be adjusted to reflect the additional requirements. No valuation firm should provide any additional information over and above that already agreed unless a negotiated arrangement is in place between the valuation firm and their client.
The Board was of the opinion that the provision of any information outside the Supporting Memorandum should be a commercial arrangement between the parties.
All valuers should be aware that, under the Capped Liability Scheme, unless the Professional Indemnity Insurance Policy held by the valuation firm includes the following general endorsement; the benefits of the Scheme may be voided.
“The Professional Indemnity Insurance Policy will not indemnify the Member for any claim directly or indirectly related to, based upon or attributable to or in consequence of any kerbside assessment or restricted assessment, unless conducted in strict compliance with the API guidelines.”
Professional Standards Manager