by The Landlord
It is proposing changes to the way the Valuers Registration Board (VRB), which regulates registered valuers and investigates complaints, operates.
In a discussion document, A Review of the Occupational Regulation of Valuers, LINZ says two-thirds of private valuations are for lending purposes and about 80% are sought by the borrower, which is unusual by international standards.
It is estimated that 273,000 private valuations are carried out each year.
“The key risk for consumers of valuation services is that they will make poor decisions when relying on valuations that are wrong or otherwise misleading… Valuation reports contain complex technical information which makes it difficult for some consumers to assess the accuracy and adequacy of the information for the intended purpose."
It cited examples including a commercial property in incorrectly valued for rental purposes resulted in a client undercharging rent by $842 per month. As the error only came to light 30 months after the valuation, the total loss was estimated at $25,260.
Another building that was being converted into apartments was over-valued by more than $5 million and a property valued at $505,000 was found by the VRB to be worth $670,000.
Land Information Minister Michael Woodhouse said: "The current occupational regulation scheme for valuers was established by the Valuers Act 1948, making it one of the oldest schemes in the country. While the scheme still works fundamentally well, there is room for improvement and for modernisation to better reflect the current environment - something that is recognised by both the government and the New Zealand Institute of Valuers (NZIV).’’
LINZ’s review said the board’s structure did not provide enough accountability, transparency or independence. It did not have to report to the government or make its reports available to the public.
It wants the board expanded to seven members, to require it to report annually and release reports on its disciplinary proceedings.
It said the current disciplinary process was slow, expensive and inefficient. It wants a new two-tiered approach and a broader range of sanctions, including a new maximum fine of $20,000, up from the current $10,000.
Submissions are due by August 26.
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