By Deborah Miriam Leshinsky ( PHD Candidate – currently doing research at Monash University)- Melbourne Australia Certified practicing Valuer Australian Lawyer Masters in Banking and Finance

 Property valuations involves unavoidably the making of guesses as to the property worth  No two valuers come up with the same value – this may mean: ◦ Highly educated – we know instructing party, we know the purpose of the valuation ◦ Uncertainty– can only make certain enquires ◦ Not being familiar with certain issues

 All we want to do is earn a living as a property professional so what do we do……  We hire ourselves out, to lending institutions the Courts and to any one who wants a property valued and put ourselves under pressure for an  ACCIDENT WAITING TO HAPPEN -

 All these issues lead to Negligence  What is Negligence:  Why do we need as a professional person to be familiar with this word:  How can knowing about negligence protect the valuer

 What is a professional person legally obliged to do:  A person who is required to give a professional opinion – given there knowledge of the local market are paid a fee in which they provide a value.  HOWEVER

If a valuer is negligent by not taking into account certain aspects of a property – avoidable and non – avoidable He may find himself/herself involved in a court case……………… ALSOProperty professionals such as Architects not providing the correct designs to the clients may be latter involved in a court case – sued for millions – all for a small fee paid for a service

 The intent of this paper is to show that regardless of what they do professionals such as property valuers, architects are always going to act in a way that will cause negligence.  THE QUESTION IS THE DEGREE OF HARM……  And Who will be harmed and who has to pay ?

NEGLIGENCE  3 things need to be proved: Defendant owes a duty of care to the plaintiff Defendant has breached the duty of care Plaintiff suffered foreseeable damage as result of Breach of duty of care

 So what can we do to prevent Court Cases: AND REDUCE THE RISK EXPOSURE  Not entering a field you are not familiar with  Provide Contractual agreements as to the maximum exposure  Obtain sufficient insurance  Protect yourself against 3 rd parties by mentioning in reports – no legal obligations

 RESEARCH AREA  Case Study – asking valuers, lenders and property professionals about risks that are unavoidable  However there are Limitations: Generalizability, risk of bias,time consuming Case study may lack rigour – careful attention

 Type 1 – analytical approach This study is examined in order to try and understand what has happened and why – it is not necessary to identify problems or suggest solutions Type 2 – The problem oriented method The case study is analysed to identify the major problems that exist and to suggest solutions We will look at Type 2

Interviews Structured – Survey research,quantitative, Hypothesis testing Semi – structured Unstructured – Exploratory, Qualitative, Hypothesis generation

 Survey design  Pre determined list of questions  All asked the same questions and exactly as written in a questionnaire  Questions asked in the same sequence  Emphasis on close ended – questions that can be statistically analysed

 Limitations – of Interviews  Leading or loaded questions – suggesting the answer  Unfamiliar and technical terms  Respondents – not just executives answers but also valuers and admin support  Response options should match the questions AND  Lack of time frame

 Any suggestions would be most appreciated  Also presenting a paper to the  Asian Real Estate society – on the legal implications of and impact on  NON AUSTRALIANS PURCHASING PROPERTY IN AUSTRALIA and THE LEGAL IMPLICATIONS

THANK YOU QUESTIONS 18