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Realistic Controls of Valuers
AREA Press Release No. 166/2016: May 12, 2016

Dr.Sopon Pornchokchai, Ph.D. Dip.FIABCI, MRICS
President, Agency for Real Estate Affairs (AREA)

In order to build the reliable brands of valuers and to compete with international companies, there should be realistic and practical controls of valuers.  Better controls of valuers means that they will have equal right.  It is not good to have "big brother" to have negative influence on others.  For the sake of public and valuers' benefits, valuers of all lands units.

In general, there should be measures to help prevent corruption of and by valuers and/or companies such as paying fine 20 - 50 times of the fee charged.  Likewise, there should be a certain amount of Indemnity insurance / risk premium (funds), e.g. 5% of the fee of each assignment.  This will help prevent corruption among valuers.

 

Valuers must be made independent (financially and intellectually) so that they will not be dominated by any of the parties involved.  In practice, there should be a labour union among valuers to protect themselves from their possibly corrupted employers. 

In terms of valuation associations, there can be more than one association, e.g. for valuers in general, or for those valuing real estate, business, machinery and the like. They can be associations of individual valuers (professional association), corporate valuers (trade association) and the like.  Associations must really represent practising professionals and the majority with no monopoly.  There must be strong commitment of the president (with certain term, 1-2 years) to devote to the associations for a certain percentage of their time, e.g. 50% during the position.  The roles of the associations: protecting the profession and members, uniting them and encouraging exchanging of their knowledge and experience and news.

In considering the role of the government, a valuation council should be established to monitor valuation profession not the SRO (self-regulatory organization) because of the infancy of valuation firms in developing countries.  The situation in most ASEAN countries is different from those with strong connections to the British system - such as Singapore, Malaysia, and Australia where the profession and the professionals at large are strong.

The valuation council should be led by the government, but would represent or work for the people as public servants.  Council members would be from the industries (professionals, associations, academics and other acceptable persons).  In addition, the council should conduct examinations, solve disputes, and possibly undertake negotiations in respect of re-valuation, business arbitration, court, and the like.

To Materialize the Valuation Council.  In Thailand, for example, there are national professional associations of architects, engineers, accountants, etc.  For the sake of the benefit of the public, however, a council was then established.  In the case of the association of accountants, they even abandoned their national association to be replaced by a council.

Recently a council was established to regulate most established professional associations in Thailand,.  The roles of the associations are mainly for activities for the benefit of their members.  For physicians, architects, engineers and the like, there are several associations such

as associations for mechanical, civil, computer engineers.  Therefore the Consultant proposes to have several associations.

This organization will be a semi-public one.  In most typical boards, it consists of:
•    A chairman from the head of a directly-related government organization at the department level or a ministry level.  The hypothesis is that the Government represents its people.  Therefore, this man should be the president on behalf of the public;
•    Appointed board members of some ten people;
•    Representatives from other related government organizations;
•    Representatives from other related professional associations such as planners, financiers, lawyers and developers;
•    Knowledgeable persons in the field;
•    Elected board members of some five people of currently practicing valuers who are directly elected by valuers on individual basis; and,
•    An executive director hired as a permanent employee will be in charge of the operation.

A Valuation Council would be operated on the basis of a subsidy from the Government for the public good.  The budget must be adequate for running its necessary operations.  Qualified staff members should also be adequate and ample.

In addition, a nation should try to promote individual valuers or small and medium valuation enterprises (SMEs) instead of the favour of large firms or international firms.  SMEs valuation firms should be in collaboration to conduct cross-border valuation assignment together for the benefits of all.