A recent communiqué issued by the Property Practitioners Regulatory Authority alerts estate agents (as property practitioners) to the (obvious) responsibility that they may not perform services as professional valuers unless they hold the required qualifications that the South African Council for the Property Valuers Profession prescribes for professional valuers, and are registered with them.
The “real life” experience
One of the first questions that a property owner asks of the estate agent when he considers putting property on the market for sale or lease, is what the likely rental or sale price is. The property practitioner, exercising his professional skills and knowledge regarding the sale and lease of property, will then provide a considered estimation. The estimation is not a figure grabbed from the air: Estate agents take into account the values of comparative sales in the area, the activity or lack thereof in the sale or lease market at that time, the unique attributes of the relevant property and enhancements, amongst other things. In practice both the property owner and agent refer to this exercise as an “estimation”, “valuation” or otherwise.
In using such wording the estate agent does not mean to hold himself out as a professionally qualified valuer, but rather as a professional in his industry with experience in values that properties reach in the market. The estate agent knows that he is also strictly regulated in making such assessments: He may not make misrepresentations or false statements, whether willfully or negligent, and specifically may not misrepresent the market value or rental income in order to secure a mandate. He may also not use harmful or misleading marketing techniques.
The way forward
Be alert and take care that in assisting clients, you do not create an incorrect perception that you are acting as a professional valuer. A suggestion is to use the words “assessment performed by a qualified estate agent” or “estimated valuation” or words to that effect in reports and communication with your clients.
Contact STBB if you require assistance.
