With the launch of the new legislation, government architects will no longer be sent to verify the declared value of a purchased property, and instead government will accept valuations written by the client’s architects.
Property appraisal or land valuation is a process of valuing immovable property and is carried out according to established standards and practices. It may come as a surprise to many, but there is a science behind the appraisal of property.
Suffice it to say that one can apply many different values to the same property, based on the different scenarios for which it may be intended: ‘market value’ is just one type, which can be further subdivided into others.
With this knowledge, it is unfathomable how particular individuals with no specific training in the field can be allowed to manipulate the market to the detriment of clients.
Warranted architects are by definition qualified to give valuations of properties. Part of their academic studies contain credits specific to valuations and estimates in Malta, which included the respective examinations. When graduates apply for a warrant to practise their profession, part of their Warranting Board review explores the candidate’s knowledge of valuation standards. There are also architects who have furthered their studies on the subject, going on to obtain qualifications at Master and higher levels, specific to valuations.
The Kamra Tal-Periti, the local chamber that regulates the profession, recognises its role in keeping the profession abreast in this field. The latest publication on the subject – Valuation Standards for Accredited Valuers – was updated and published in 2012.
Since then, KTP has organised two sets of courses aimed at keeping architects updated on legislation and procedures in valuations. These form part of regular continuous professional development courses. In the near future, KTP aims to make such courses obligatory for warrant holders. This will help to continue to elevate the professional standing of the architect, and as a direct consequence the client will benefit from an improved service.
Why was the previous situation undesirable? There were situations where a purchaser would have appointed a private architect to value the property, only to be contested by a government appointed architect. This resulted in an undesirable disagreement between warrant holders, with the client being disadvantaged at all stages.
There were situations where a client would purchase a property in an unfinished or even derelict state but would hesitate before improving it in the event that the government architect would conduct his valuation on the new, improved condition of the structure. The client was not only expected to pay the difference in tax relating to the difference in valuations, but also applicable penalties.
Under the new legislation, an individual client can appoint a private architect he trusts to carry out a valuation in accordance with applicable standards, in the knowledge that the government will recognise that valuation as just and fair. In cases where an architect does not operate according to his professional standing, KTP has mechanisms in place to discipline and regulate should any abuse be flagged. With all the work KTP and the profession have invested in itself, we are therefore proud that the government has recognised the privately-appointed architect as an accredited valuer, and Kamra Tal-Periti as the body that issues such standards.
I cannot stress how important it is for a prospective buyer to engage an architect of his choosing early on in the negotiation process. An architect will bring with him a vast amount of experience that can guide a client professionally, highlighting certain issues that may later be a significant problem, making the property clash with its intended use. These could be structural, planning or legal issues. Such issues might even lead to the cancellation of the promise of sale.
An architect can also identify hidden potential a buyer would not be immediately aware of. The architect would have no vested interest in closing a sale or not; his role is to give professional and objective advice to his client.
While we see this announcement as an excellent step forward, we are still to be officially presented with a finalised copy of the Legal Notice, over which we can give our final verdict on the salient details of the legislation. These details could make or break the effectiveness of how well this legislation serves the client and the retail market.
Kamra Tal-Periti will continue offering its advice and experience in all fields related to it to government, should it be requested.
Chris Mintoff is vice-president of the Chamber of Architects.
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