John Hockey and Jeremy Moody 1 Framework and Content Determined by recognition extensive consultation feedback 2 Resolved to remain clearly focused on real estate provide additional guidance and technical ID: 555347
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EVS 2016
John Hockey and Jeremy Moody
1Slide2
Framework and Content
Determined by:
recognition; extensive consultation; feedback.
2Slide3
Resolved to:
remain clearly focused on real
estate;
provide
additional guidance and technical
information;
meet
the diverse needs of the 63 TEGoVA
TMA’s;
concentrate on high level principles.
3Slide4
Meeting the objectives:
follows the direction of previous editions;
informed
by existing and emerging European
regulation; yet
upholding
the scientific and professional obligation on the valuer.
4Slide5
EVS 2016 provides:
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harmonised European standards, guidance and technical
information;
d
esigned for
use by all sectors of the European valuation profession
;
c
orporate governance and ethical
considerations embedded within the standards.Slide6
Divided into four parts:
Part 1
European Valuation Standards and Guidance Notes
Part 2
European Codes
Part 3
European Union Legislation and Property Valuation
Part 4
Technical Documents
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European Valuation Standards
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EVS 1 Market ValueEVS 2 Valuation Bases Other than Market ValueEVS 3 The Qualified Valuer
EVS 4
The Valuation Process
EVS 5
Reporting the Valuationall have been refined and
reinforcedSlide8
EVS 1
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EVS 1 Market Value - expanded to include a definition of Market
Rent
“
The estimated amount of rent at which the property should be leased on the date of valuation between a willing lessor and a willing lessee on the terms of the actual or assumed tenancy agreement in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without
being under compulsion.”Slide9
EVS 2
EVS 2 Valuation Bases other than Market Value – Fair Value, Special Value, Investment Value, Mortgage Lending Value (MLV), Insurable Value
Fair Value: distinguishes general definition for valuation from specific accounting definition MLV: extends the commentary, informed by
Regulation
(EU) No 575/2013 (CRR
)
“the value of immoveable property as determined by a prudent assessment of the future marketability of the property taking into account long term sustainable aspects of the property, the normal and local market conditions, the current use and alternative appropriate uses of the property.”
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EVS 3
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EVS 3 The Qualified Valuer
,
expands the requirements
- not
only competent to act, but also independent and without any undisclosed potential conflicts of interest:“
Any
connection, other potential conflict of interest or other threat to the valuer’s independence and objectivity, should be disclosed in writing to the client and recorded in the valuation
report”. Slide11
EVS 4
EVS 4 The Valuation Process -incorporates and amends guidance published in 2013 relating to terms of engagement.
“Data retained following the submission of a valuation must be sufficient to enable verification that the analysis and evaluation undertaken in the approach, or approaches, to providing the opinion of value reported were sufficient for the type and scale of valuation”
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EVS 5
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EVS 5 Reporting the Valuation
-
provides commentary on
situations where opinions of “value in the longer term” are requested - “while such an approach may be useful ….. It will not be a measure of Market Value”Slide13
European Valuation Guidance Notes
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European Valuation Guidance Notes
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European Valuation Guidance Notes
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Part 2
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Part 3: European Union Legislation and Property Valuation
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Part 4: Technical Documents
18Slide19
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….
also in Part 4
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New Guidance Notes:
EMF + TEGoVA Commercial Loan SpecificationValuations: Compliance with EVS 21Slide22
New Technical Documents
Valuation Certainty and Market RiskAutomated Valuation Models (AVM)22Slide23
Status
ECB Recognition (May 2014)“Real estate should be valued in line with European Valuation Standards 2012 (Blue Book) and anther international standards … - where a conflict is seen EVS 2012 will apply for the avoidance of doubt …” (Asset Quality Review)
Mortgage Credit Directive (2014/17)“In order to be considered reliable, valuation standards should take into account internationally recognised valuation standards, in particular those developed by … the European Group of Valuers Associations ...” (Recital 26)
der
to be considered reliable, valuation standards should
take into account inter
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Where and when …
EVS 2016 is effective from 1 June 2016available to download from the TEGoVA website www.tegova.org Thank you for your attention.
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