PROPERTY JOURNAL

How regulatory reviews help improve valuation practice

Dealing constructively with difficult feedback during a regulatory review can ensure compliance with Red Book Global Standards, improve practice and enhance reputation. A member of the RICS Regulation team provides practical guidance in that regard

Author:

  • Charlie Jackson FRICS

24 June 2024

Photograph of a building façade

RICS has around 16,000 members globally who are registered valuers and when they register, they agree to be reviewed by our Profession Support and Assurance teams. This article is by way of a reminder that being regulated by RICS places obligations on individuals and firms, and that we will ensure valuers comply with these.

If carrying out valuation work in one of the countries where registration is mandatory, chartered or associate members must join the RICS Valuer Registration Scheme (VRS), unless all the valuation work they do is listed in the exceptions in section PS 2, paragraph 5 of RICS Valuation – Global Standards (Red Book Global Standards).

The VRS aims to ensure high standards in property valuation practices by providing a consistent, accountable and transparent framework for valuers.

A key part of the scheme is the enhanced professional assurance to which its members are subject. VRS fosters public trust and confidence in valuations by ensuring that registered valuers meet stringent professional and ethical standards.

As VRS members, valuers may periodically be selected for a review to ensure compliance with relevant professional standards.

The reviewer, who will themselves be an RICS member and an experienced valuer, will check that the valuer has robust processes and procedures in place to ensure they comply with all stated mandatory professional standards and follow best practice guidelines.

Reviewers will have encountered a wide range of valuation scenarios during their careers, which provides them with practical knowledge to offer insightful and applicable guidance.

In addition, they undergo rigorous training to ensure they have a deep understanding of valuation principles and practices and are well-versed in Red Book Global Standards, which ensures that their advice and feedback are aligned with the highest industry standards.

Subsequently, the reviewer will provide verbal feedback and a written report tailored to the valuer's particular work, based on a sample of their valuation files. Together, the feedback and report will highlight any risks or areas for improvement.

For more detailed information on regulatory reviews, please refer to the RICS Profession Support and Assurance guide.

By following this guide, valuers can ensure a smooth and efficient review process, demonstrating their commitment to maintaining the highest standards of professional practice.

Critical insights help improve practice

Almost all valuers who have been subject to a regulatory review have found the experience helpful, supportive and beneficial to their business, as the advice provided was bespoke to their work and circumstances.

For example, speaking about the review process, Kenneth Ma MRICS said that it was 'incredibly enlightening in terms of identifying areas where I could refine my valuation practices', while João Fonseca MRICS commented that regulatory reviews 'should not be seen as a form of supervision and punishment of expert assessors. On the contrary, they are a help for expert appraisers and a guarantee for their clients.'

However, the reviewers recognise that more critical feedback can sometimes be difficult for valuers to hear.

Criticism can trigger feelings of frustration, disappointment or defensiveness; but it is important to remember that the reviewers provide this feedback objectively and constructively, with the intention of helping valuers become compliant with the requirements of Red Book Global Standards. 

This will help protect them against future criticism of their valuation work, including accusations of negligence. It will also ensure clients receive a high-quality, professional service and a valuation that is fit for purpose.

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How does RICS regulate and support valuer judgement?

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Attentiveness and reflection maximise value of feedback

While it can be challenging if valuers receive difficult feedback from a regulatory review, it is also a valuable opportunity for growth and improvement. By considering the following points, valuers can turn it into a learning opportunity – and an experience that will benefit themselves and their clients.

  • Stay calm and open-minded: when receiving difficult feedback, it's natural to feel somewhat defensive. However, valuers are advised to remain calm and open-minded. Even if it's hard to hear, feedback can offer valuable insights for improvement. It is part of the reviewer's job to make sure that valuers have the tools and knowledge that they need to become fully compliant with the requirements of Red Book Global Standards. The reviewers are there to help and support valuers, not to belittle or pick holes in their capabilities. 
  • Listen actively: valuers should pay close attention to the feedback being provided. They should listen carefully to understand the specific points being raised and the reasons behind them. They should avoid interrupting or immediately dismissing the feedback. Valuers will be given the opportunity to ask questions and explain their point of view: the reviewer will want the feedback to be fair and factually accurate, which will require the valuers' input. 
  • Seek clarification: if the feedback is unclear to the valuers, they should ask the reviewer for clarification. The reviewer will provide specific examples that illustrate their observations and concerns, but it is important for the valuers to bear in mind that the feedback session is a two-way conversation between one valuation professional and another. All points are open to discussion. 
  • Reflect on the feedback: after valuers have heard what the reviewer has to say and read their findings, they should take some time to reflect. This can help valuers gain deeper insights into areas for improvement and how to apply the feedback to their day-to-day work.
  • Identify insights to act on: valuers should look for specific areas where they can make improvements immediately based on the feedback received. They should break down the rest of the feedback into manageable actions or goals they can work towards.
  • Request guidance or support: if valuers are unsure about how to address the feedback or implement changes, they should seek guidance or support from the reviewer, who can still be contacted after the review. Valuers could also ask for help from other valuers in their network who they know have previously been reviewed. They may offer valuable advice or resources to help the valuers navigate the process of improvement. Useful templates for documents and files that comply with Red Book Global Standards are available to download free of charge from the RICS website.
  • Develop an action plan: valuers should create an action plan outlining the measures they will take to address the feedback and make improvements. They should set specific goals, timelines and strategies for achieving them. Depending on the scale and seriousness of non-compliance found by the reviewer, a follow-up review may be required, and may take place within a matter of months. RICS will assess all matters reported at any subsequent review and will therefore expect the valuers to have implemented the required improvements by then. If it is apparent at the next review that areas requiring attention have not been addressed, RICS reserves the right to refer to the previous findings when considering any further regulatory or disciplinary action. It is important for valuers to act on the feedback they receive as quickly as possible.
  • Monitor progress and adjust: valuers should regularly monitor their progress in addressing the feedback and achieving full compliance with the requirements of Red Book Global Standards. They should be willing to adjust their approach according to new insights or feedback received along the way.
  • Acknowledge growth and learning: implementing feedback received during the review process can enhance a valuer's skills and knowledge. Furthermore, demonstrating their commitment to upholding the highest professional standards and adhering to regulations will enhance their credibility and reputation within the profession and among clients.

Review process can enhance reputation

The bespoke feedback provided from regulatory reviews is beneficial to valuers for several other reasons.

  • Risk mitigation: regulatory reviews help valuers to identify and address any potential risks or discrepancies in their valuation practices early on. By proactively addressing any issues identified, they can mitigate the risk of errors or misconduct that could have financial or reputational implications.
  • Client confidence: clients often prefer to work with valuers who are regulated and subject to review by reputable organisations such as RICS. Participation in reviews can therefore help valuers to instil confidence in clients, demonstrating commitment to quality, integrity and professionalism.
  • Collaboration: regulatory reviews provide valuers with an opportunity to collaborate with experts in the field who can offer advice and share their expertise. This can enable knowledge and best practice to be shared, ultimately benefiting valuers and their clients alike.
  • Compliance with standards: regulatory reviews ensure that valuers adhere to Red Book Global Standards and best practice. Compliance with these standards is essential for maintaining consistency, transparency and reliability in valuation practice.

Regulatory reviews by RICS therefore offer valuers opportunities for professional development, enhancing their credibility and reputation, mitigating risks, instilling client confidence, encouraging collaboration and ensuring they comply with standards and regulations.

By approaching difficult feedback as a learning opportunity and taking proactive measures to address it, valuers can use it to enable professional growth for the benefit of themselves and their business.

'Regulatory reviews offer valuers opportunities for professional development, enhancing their credibility and reputation'

Charlie Jackson FRICS is profession support and assurance technical specialist (valuation) at RICS
Contact Charlie: Email

Related competencies include: Inspection, Legal/regulatory compliance, Valuation

Red Book Global Standards consultation

RICS is holding a consultation on the proposed updates to the Red Book Global Standards between 1 July and 2 August 2024, as part of our commitment to sustain public confidence and trust in valuation.

New International Valuation Standards (IVS) were published on 31 January of this year, featuring a revised structure with an emphasis on environmental, social and governance (ESG) factors, data utilisation, and valuation modelling. In response to these updates and the insights gathered from the RICS valuation member survey, RICS is now updating the Red Book Global Standards.

Making these changes will help us incorporate valuation review recommendations, emphasise ESG, data, and valuation modelling. In addition, along with undertaking technical updates to all of the VPGAs, we will also revise VPGA 1 Valuations for Financial Reporting and introduce an additional VPGA 11 Relationships with Auditors.

To ensure these changes are effective for the industry, we are holding a five-week consultation, and we invite all RICS members and stakeholders to share their views.

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Join us and engage with forward-looking insights into future industry trends and shifts, enabling you to prepare and position your business to capitalise on upcoming opportunities in CRE and FM.

Early bird offer available until 15 August.

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