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26 AUG 2018

RICS Valuer Registration, Firm Regulation, and Regulatory Reviews

This alert aims to support RICS professionals and firms to better understand their regulatory commitments and be prepared for an RICS Regulatory Review.

Through RICS Valuer Registration (VR) and Firm Regulation, we proactively monitor RICS professionals who provide valuation services, to deliver guidance that improves existing practices, mitigates risk, and enables high levels of compliance with RICS Valuation – Global Standards 2017. VR and Firm Regulation include the following mandatory requirements:

Red Book compliance

All valuations performed by RICS professionals or firms must fully comply with the RICS Valuation – Global Standards 2017 (the Red Book), unless within an exception (Red Book, PS1, paragraphs 1 and 5). 

  • Valuers cannot exempt valuations from Red Book and VR by not using their RICS credentials or by defining valuations as “non-Red Book” because they use another standard.
  • Valuers can readily conform to both another standard and to Red Book at the same time. Where use of another standard is required by a client, the Red Book provides how the valuer can properly document the departure (Red Book, PS1, paragraph 6).
  • Your Terms of Engagement must state that the valuation is subject to monitoring under RICS' conduct and disciplinary regulations (VPS1, para 3.1[q]).

Regulatory Reviews: On-site and off-site

All participants in VR and Firm Regulation are subject to Regulatory Reviews. These reviews are a key tool for RICS to ensure consistent practice compliant with RICS standards. Our Regulatory Reviewers conduct on-site and off-site regulatory reviews of the work conducted by RICS Registered Valuers and Regulated Firms.

What is involved?

Regulatory Reviews include a review of:

  • Valuation reports
  • Valuation files
  • Complaints Handling Procedure
  • Conflict of Interest checks
  • Internal processes

What is the purpose?

Regulatory Reviews are a compliance tool designed to educate and assist RICS professionals and firms in improving their valuation work and complying with Red Book requirements.

  • Immediately after an on-site Regulatory Review, the RICS Regulatory Reviewer will provide verbal feedback regarding the strengths and weaknesses of the work reviewed.
  • The RICS professional or firm will subsequently receive a written report containing detailed guidance on strengths and areas where improvements could be implemented.
  • Rarely, and only if a serious case of non-compliance is found, a Regulatory Review will result in an investigation and possibly disciplinary action.

How are valuers and firms selected?

Regulatory Reviews are scheduled using a risk-based approach.

Professionals and firms are selected for review based on information available from the market, responses to annual returns, areas of identified market concerns, how long it has been since they were previously reviewed, thematic risks and benchmarking considerations.

While a review could be triggered by a specific complaint about a professional or firm, most are not.

Governing rules for Regulatory Reviews:

What's next?

Over the next 24 months, most RICS valuers in Australia should expect that they or their firm (if regulated) will be contacted to schedule either an on-site Regulatory Review or an off-site Regulatory Review.

For valuers who conduct valuations of assets located in Queensland and/or Western Australia:

Please note that an RICS Regulatory Review has no connection to the statutory registration of valuers practising in Queensland, under the Valuer Registration Board of Queensland, or the licensing of Land Valuers in Western Australia. They have their own obligations, rules and regulations that we do not monitor. All RICS professionals have a duty to comply with the statutory requirements that may apply to them in the geographical location(s) in which they practise.

If you have any queries or seek clarifications, please email RICS Regulation or phone 02 9216 2312.