The Saudi Authority of Accredited Valuers (Taqeem) is out with two proposed sets of regulations related to real estate appraisal services, including rules on the real estate appraisal process as well as guidelines on who can be accredited as an appraiser. The breakdown:

REAL ESTATE APPRAISAL-

Regulations (pdf) on real estate appraisal services set out the framework. They’ve been put up on the government’s survey platform, Istitlaa, for public consultation until Monday, 20 May.

A look at requirements for eligibility: Appraisers or relevant partners must obtain a fellowship certificate from Taqeem in real estate appraisal. They need 20k hours of experience registered on the authority’s electronic platforms and have no less than five of the authority’s members on board of the real estate appraisal entity. Their license should be valid for at least 120 days.

All applications for registration would be submitted online through the authority’s dedicated Qaym platform, and the relevant department must take a decision on the application for no more than 15 days. Taqeem will compile a list of qualified appraisal entities which will be updated periodically.

A specialized Taqeem department could suspend accredited appraisal entities from receiving requests through Qaym if they fail to meet these terms. Suspension of orders could also occur in case of accredited appraisers requesting the halt of orders or reaching the maximum allotted number of daily orders. Orders for entities could also be paused if they take too long to complete requests or respond to objections.

Appraisals are not set in stone, and financial institutions (think commercial banks and finance firms under Saudi Central Bank supervision) could reject an appraisal report if the appraising entity fails to submit it within three days after it was due or respond to comments by financial institutions on the report within two working days of their submission. They can also be rejected in case multiple reports of the same real estate asset show a 15% discrepancy in value between submitted reports.

Fines + penalties: Appraisers can face fee cuts of 10% of the agreed upon fee in the case of delays, which rises in increments of five percentage points each day to a maximum of 20% if the report is delayed by three days. Failure to submit reports after will see requests assigned to another appraisal entity within the platform who will be paid through the originally tasked appraiser’s financial dues from Taqeem. Multiple infractions by the same appraiser will result in its exclusion from the platform, and will only be able to re-apply after 180 days from the date of their exclusion.

An accredited appraiser will be permanently excluded from the platform in the event of:

  • Being found in violation of the provisions more than once in the same year by a committee tasked with considering irregularities;
  • Providing services to financial institutions outside of the platform;
  • Hiring people who aren’t cleared to execute appraisals through the platform;
  • Enlisting a beneficiary or property owner to inspect and photograph the real estate asset subject to appraisal;
  • Disclosing a client's information;
  • Appraising an asset in a situation where there is a conflict of interest;
  • Assigning assessment tasks to others off the books;
  • Being found guilty of fraud, manipulation, and other gross violations.

Financial institutions are responsible for submitting the necessary documents for each appraisal request through Qaym. They should also ensure that there is no influence on the appraiser that might compromise their independence or decision and are required to address remarks from the appraiser within a maximum period of five days and review reports within 10 days at most.

Minimum fees for appraisal services provided to financial institutions are determined by Taqeem’s CEO, the rules showed. The fees are set depending on appraisal entities fulfilling regulatory compliance and occupational requirements. Fees are disbursed to appraisal entities through Qaym on a monthly basis after they are paid by financial institutions. They will be paid out through Qaym within up to 15 days from the completion of payment.

PROFESSIONAL CERTIFICATES-

Taqeem is also seeking the public’s opinion on another set of rules (pdf) regulating obtaining professional certification for accredited appraisers. Applicants, who will be put through qualification programs by the authority, should be Saudi nationals and hold a minimum of a high school degree.

The rationale: The regulations aim to unify the policies and procedures for obtaining certificates for the appraisal of real estate, machinery, equipment and movable property, as well as vehicle damage inspection. They also target meeting market needs for specialized personnel in the industry. They are up for public consultations on Istitlaa until Thursday, 16 May.

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