Real Estate Appraisal is the process of valuing real property. The Value usually sought is the property’s Market Value. (www.wikipedia.org)
No two properties are alike, thus this makes real estate appraisal important. And only qualified, Professional Appraisers are to render a written report and advice on the value of a property.
Therefore, in the Philippines, per Republic Act 9646, sec. 3 (a) defines that “Appraiser , also known as Valuer, refers to a PERSON who conducts valuation/appraisal; specifically , one who possesses the necessary qualifications, license, ability, and experience to execute or direct the valuation/appraisal of real property.”
In Section 3 of the Real Estate Service Act, the definition of terms is clear. The Act of Rendering an opinion of Value is the Person who shall be licensed under the Professional Regulation Commission and the Professional Board of Real Estate Service.
As further defined on sec. 3 (g) Real Estate Practitioners shall refer to and consist of the following:
Real Estate Consultant- a duly registered and licensed natural person who, for a professional fee, compensation or other valuable consideration, offers or renders professional advice and judgment on (i) the acquisition, enhancement, preservation, utilization or disposition of lands or improvements thereon; and (ii) the conception, planning, management and development of real estate projects.
Real Estate Appraiser- a duly registered and licensed NATURAL PERSON who, for a Professional fee compensation or other valuable consideration, performs or renders, or offers to perform services in estimating and arriving at an opinion of or acts as an expert on real estate values, such services of which shall be finally rendered by the preparation of the report in acceptable written form.
My Advocacy is the proper recognition, accreditation, acceptance, and due respect given to the privileged professional. Under the Sec. 2 of R.A. 9646, the Declaration of Policy states that the State recognizes the vital role of real estate practitioners in the social, political, economic development and progress of the country by promoting the real estate market, stimulating economic activity and enhancing government income from real property-based transactions.
It is therefore my concern and responsibility, as member of the Board of Real Estate Service to see to it that this law is properly followed. However, there is a dilemma whereby government agencies, corporations, including the Banko Sentral ng Pilipinas (BSP) and the Security and Exchange Commission (SEC) to accredit only Corporate Practice.
The SEC requirements for the accreditation of Real Estate Appraisers under SEC Memorandum No. 4, series of 2010, entitled, “Guidelines on Property Valuations, states that an appraisal company is defined as a corporation or partnership engaged in the appraisal business and employs a property valuer to conduct valuations of properties of its clients. The Circular also requires that for valuation of real properties relative to transaction of a REIT, the appraisal company or property valuer shall use the income capitalization approach, as provided for in paragraphs 5.12.2 to 5.12.6 of GN1-Real Property Valuations of the Property Valuations Standards.
For BSP, the following requirements are required for BSP Accreditation: SEC Accreditation, GIS (General Information Sheet), latest Audited Financial Statement, Mayor’s permit, BIR Certification, Tax Clearance/Registration, ITR, Business Permit, PARA (or maybe even IPREA whichever you are affiliated with) Certification of Good Standing, List of Officers and Technical Personnel including curriculum vitae and certifications, Company Profile, Scope of Services, List of Present Clientele, Minimum of 5 years existing company with licensed officer, and have rendered professional service to at least one commercial bank and two public companies.
These requirements and conditions are to my mind prejudice and in discrimination to the individual professional real estate appraiser.
Now, the law, R.A. 9646 Section 32, states the conditions for Corporate Practice of the Real Estate Service. As follows:
(a) No partnership or corporation shall engage in the business of real estate service unless it is duly registered with SEC and the persons authorized to act for the partnership or corporation are all duly registered and licensed real estate brokers, appraisers or consultants, as the case may be. The partnership or corporation shall regularly submit a list of its real estate service practitioners to the Commission and to the SEC as part of its annual reportorial requirements.
The idea therefore is to implement strict rules, directives and guidelines in the Corporate Practice of rendering Real Estate Appraisal Services.
Since this is a profession whose subject is the person, it is logical that these corporations and/ or partnerships be owned, managed and controlled by duly licensed real estate appraisers.
Just in the case of accountants, lawyers, medical doctors, it is the professional who owns, runs and manages the corporation. It is a professional service, not a trade or business.
The practice that is being done today is that corporations are formed, owned , managed, controlled by a majority of shareholders that are not professionals, nor do they have the appropriate license.
The appraisal practice due to the SEC regulations has made it almost impossible to reform valuations as an individual. Presently, there are about 3,000 licensed real estate appraisers but only ten corporations are accredited.
This situation allowed “investors” to use (or even abuse) the individual appraiser as mere employees. Yet, by using their license, these owners and shareholders of appraisal companies absolve themselves from any responsibility. If anything goes wrong, the Board of Directors and management will “wash their hands” and claim that they had nothing to do with the Appraisal Report and therefore defend themselves from litigation, legal cases, and complaints from clients.
We urge that our Appraisal Associations like the Institute of Real Estate Appraisers Inc. (IPREA) and the Philippine Association of Real Estate Appraisers Inc. (PARA), together with other Real Estate Associations and groups to join us in this advocacy in order to implement the Real Estate Service Act. It is not only for the interest of our professional real estate practitioners but for the good of our economy, society and nation. For the wealth of our country is measured by true, single, fair market valuation, rendered by the Filipino professional real estate appraiser that is globally competitive and with competence of International Standards. Mabuhay ang Filipino Professional!
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