APPEAL TO ALL BANKERS FROM APROFESSIONAL VALUER

APPEAL TO ALL BANKERS FROM A PROFESSIONAL VALUER

AUTHOR: Er. ALHAD DESHPANDE

Friends, We the valuers are working in the interest of bank as well as financial institution from so many years and doing assessments of various assets to be mortgaged by bank for lending finance. It is also well known fact that bankers make policy decision regarding sanction of loans based on security pledged by borrowers and same asset /security valued by panel valuer, with his expert technical and professional skills. Many times, we valuers are asked to submit valuation reports on top priority, with minimum documents provided as all the documents are either with the bank or advocate. In such situation, it is quite difficult to analyze any asset in short duration and in shortfall of documents. Also there is a common situation that valuer or his assistant has to collect the papers from bank, visit the site, get all the verifications done and submit the valuation report not only as technical expert but business associate too!

In view of bankers, valuer is a channel partner or business associate too, so they expect speedy persual and assistance from him at nominal charges kept in respect of their business policies! For general and common people valuation is just a game of multiplication i.e. multiplying rate (x) area, that’s all!, they literally feel, valuation report is just a multiplication report without any expertise or technical skill , many valuers give more importance to real estate agents, because of which general people feel that valuation is not only a multiplication report but also a written form in which valuer has just to fill up the information received from real estate agents which is given by them orally and valuer has to put it in report and just sign it. But conducting market inquiries is a formality in valuation procedure and not everything, as many important aspects of the property like social, economic, technical and legal along with udpcr rules, regulations, transactions evidences etc. have to be thoroughly studied before finalizing the valuation report.

This word “just sign it” is most important as if anything goes wrong person whose stamp, signature is being used is going to be questioned and not the real estate agents !

But when account goes bad or NPA , not only valuers report but his integrity is also going to get questioned , in today’s scenario , becoming valuer has certainly become a risky job featuring minimum earning with maximum legal risk , as banks has lodged FIR’s and complaints against many valuers recently , some of our valuers are facing court proceedings too !

Common problems faced by valuers;

1] Insufficient documents with insufficient assessment time;

This is a common situation everywhere, valuers get the documents from bank and immediate phone calls from bank officers, direct selling agents [D.S.A.] get started. The documents are many times not enough to furnish the valuation report correctly, so naturally there are typing and other manual mathematical errors often found in valuation reports, which valuer has to again compensate!

2] Many times, title investigation report or search report is not provided, so confirming ownership rights, primary title investigation becomes difficult, while assessing value of the property;

This is also happening due to pressure and limited time span allotted to advocates, so the entire documents file is with the advocate and bank just gets green signal about said property to be mortgaged from said panel advocate and ask valuer to do the valuation, without providing a copy of search report. Due to which primary ownership rights, title of the property, rights of borrower etc. remains untouched!

3] In case of housing loans, one agreement to sale copy is being provided to valuer to assess value of flat, which is yet to be constructed. In such case valuation report is merely an estimate of the value of flat, subjected to satisfactory completion of construction as well as project.

This fact is quite serious and many valuers are not aware of gravity of the situation. Many times there is open land on which some housing project is planned, with construction yet to start. If some customer books a flat on fourth floor, valuer has to check agreement to sale consideration fixed by builder and purchaser with technical review of compliance of the scheme documents and relevant permissions. In such case valuer should clearly write that “ this report is an estimate of proposed value of such flat as said flat is yet to be constructed, subjected to satisfactory completion of construction as well as project “. If this fact is not mentioned bankers use your report as “asset verification/identification report” in their loan proceedings and on one fine day valuer has to face the legal consequences if due to any reason said flat couldn’t get constructed fully.

It is worth to mention that any valuation is always of the “existing structure /unit “and not of the structure/units to be constructed in future, because in such case it merely becomes a projection and not more than that. If bank is making a policy decision , this fact and assumption of satisfactory project completion with due RERA , building completion compliance in accordance with drawings and approvals availed by builders so that there will be no discrepancy in numbering and carpet areas of flats/apartment units.The position, description on deed and at site, should be absolutely same with no ambiguity, any addition in balcony, projection must be regularized in building completion or occupancy certificate.

4] Most important fact is valuers job is to verify, assess and value the asset already identified by bank because valuer can only tally the position at site and on documents to report discrepancy if any.

It is often misunderstood that, it is valuer’s job to identify the asset to be valued, because identification of any asset is beyond valuer’s control, but he can certainly point out the discrepancies on document and in actual on field/site. In case of N.P.A. , when bank takes physical possession of any property , same has to be duly supported by making a copy of PANCHNAMA , as advised by Hon. D.R.T. and Court , then only valuer can value such asset !

So, verification of the already identified asset is the job of valuer during valuation!

5] In last 5 years, many banks have suddenly changed their policies and implementing “INDEMNITY BONDS”, “REDUCTION IN VALUATION FEES, MAKING IT NOMINAL ONE”, the fees being paid to valuers is not even 25 % of the fees paid earlier 15-20 years ago, where everything has become costly, cost of transportation, stationary, staff salaries, other overheads!

In addition to above bank is launching COMPLAINTS, F.I.R.’s against valuers in case of default of accounts, so the job which has been done in nominal professional fees has become part of appearing before HON. Court, appointing advocates etc., which has become costly affair for valuers.

In view of this situation, certainly valuers and profession of valuation is on “cross roads”

By making this appeal,I am making a humble request to reconsider the duties and responsibilities of valuers by studying above facts mentioned and restructure the bond of faith between bankers and valuers!

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