Given the volatility of markets in these turbulent times, investors in real estate and real estate funds naturally want to know that their advisors really are qualified to guide their choices and to manage their investments. Yet it is undeniable that, in the wake of the recent global property crisis, many people consider that valuers were part of the problem.
And, of course, in some cases, they were. It is not possible for any one valuer to specialise in every different asset type and commercial property market, and it is not always easy for real estate clients to establish whether the experience on offer is what is needed. As a result, governments have been forced to look into the question of whether the industry should be more closely regulated, whether by government itself or by independent bodies.
One organisation which has consistently provided a benchmark for the skills of property people is the Royal Institution of Chartered Surveyors (RICS). The RICS has expanded well beyond its original UK territory to be well-established in Europe and globally as an authoritative source for industry standards, training and qualifications.
This professional body already has high entry standards, and the RICS tag is rightfullly seen as an indication of superior quality of service, but to maintain its self-regulating status and to raise the credibility of the profession, the RICS has responded to the crisis by ramping up even further the commitment to ongoing professionalism required of its members.
In October 2010, RICS launched the RICS Valuer Registration Scheme, explained in their FAQ as follows:
RICS is a self-regulating organisation and is the provider of the world’s leading professional qualification in land, property, construction and associated environmental issues. The RICS Valuer Registration Scheme is being put in place to ensure that members adhere to, and can be monitored on, practising the standards contained in the RICS Valuation Standards (also known as the Red Book) when undertaking valuations.
Valuation is probably the highest public interest area within our remit and following a consultation process, RICS Governing Council decided to introduce the scheme in order to ensure we maintain and build public confidence in the profession.
The aim is to provide “reassurance, protection and expertise” to all who “occupy, own, develop or trade in assets in today’s sophisticated world markets,” by ensuring “openness and transparency, clear reporting, international valuation standards and world class regulation”. See the brochure Why use an RICS registered valuer? and this video in which Eve Salomon, Chair of the Regulatory Board, explains the value of regulation. The obligations of the registered valuer are detailed in the Rules for the Registration of Schemes.
This scheme is good for clients, who will be able to engage valuers recently vetted as complying with the standards of the scheme, knowing that anyone registered with the scheme is subject to monitoring by the RICS Regulatory Board. It is also good for registered service providers who can legitimately claim that they are the “best regulated, qualified and experienced professionals within the field”.
UK members who undertake valuations must register by 30 April 2011, whereas registration for members valuing in the rest of Europe and in Asia is voluntary, although it will become mandatory later. While it is not yet compulsory in Luxembourg, we at RealCorp encourage valuer registration so that clients can be absolutely confident that we offer the best available expertise.
What about you? Our experience suggests that the people we work with (investors, fund managers, auditors) really value the RICS name. We are convinced that as the market becomes even more competitive, they will also seek the additional reassurance provided by the RICS Valuer Registration Scheme. Do you think it makes a difference? Would that protection be important to you as a service provider or as a client?
How can RealCorp’s Chartered Surveyors help you?
Contact Michael Chidiac MRICS re Valuation and Advisory or Search and Selection.
Contact Erwan Varron MRICS re Asset Management.
Contact Laurent Pedrini MRICS re Acquisitions and Disposals, Landlord Rep., Tenant Rep..