Property Industry Crisis… Call for Action “Before it is too Late”

The national president of the Australian Property Institute, Philip Western (pictured), said it was time for the market to act in a fair and equitable manner before the livelihood of many of the institute’s members were destroyed.

“There is a need for lending institutions, mortgage insurers and professional indemnity insurers to sit down with the profession and agree on a way forward before it is too late,” said Mr Western.

“We have a market where:

•There is a very limited number of underwriters prepared to write cover to protect the valuation profession and those that are prepared to insure valuers continue to look to placing severely limiting clauses in such policies;

•Such clauses reflect the reaction of the professional indemnity insurers to the risk associated with aggressive action by lender mortgage insurers and or unacceptable wording in valuation service agreements;

•Small valuation firms are disappearing because they either cannot get cover or the cover includes these clauses that effectively makes the policy prohibitive;

•Whilst the LMI limiting clauses are in place, in accordance with the insurance policy the banks have an explicit ability to take action against a valuer for losses suffered but instead hide behind the fact that the policy does not cover the LMI and therefore the valuation firm is removed from the panel

•Banks that pass on their valuation risk to the mortgage insurer, pay no compensation to the valuer

•Fees and turnaround times continue to compromise professional standards; and

•Valuation service agreements continue to be weighted in favour of the lending institutions

“Enough damage has already been done to the profession with very few seeming to care that small operators are losing their business”, said Mr Western.

The Australian Property Institute represents the interests of more than 8500 property professionals throughout Australia.