9.1.4 Appraisers

All valuations of immovable property, including updated valuations, should be performed by an independent and qualified appraiser, internal or external, who possesses the necessary qualifications, ability and experience to execute a valuation, as specified in Article 208(3)(b) and Article 229 of Regulation (EU) No 575/2013.

For the purposes of external appraisals, credit institutions should establish a panel of independent and qualified appraisers, based on the criteria set out below. The appraisers’ performance should be assessed on an ongoing basis and a decision should be made about whether each appraiser should remain in the panel or not.

Credit institutions should ensure that external appraisers on the panel have adequate and valid professional indemnity insurance.

The credit institution should ensure that each qualified appraiser on the panel:

• a) is professionally competent and has at least the minimum educational level that meets any national requirements for carrying out such valuations;
• b) has appropriate technical skills and experience to perform the assignment;
• c) is familiar with, and able to demonstrate ability to comply with, any laws, regulations and property valuation standards that apply to the appraiser and the assignment;
• d) has the necessary knowledge of the subject of the valuation, the relevant property market and the purpose of the valuation.

A panel of appraisers should contain expertise in various areas of the property sector appropriate to the lending business of the credit institution and the location of lending.

In order to mitigate any conflict of interest sufficiently, credit institutions should ensure that all internal and external appraisers who are going to carry out the actual appraisal of a given property and their first-degree relatives meet the following requirements:

• a) They are not involved in the loan processing, loan decision or credit underwriting process.
• b) They are not guided or influenced by the borrower’s creditworthiness.
• c) They do not have an actual or potential, current or prospective conflict of interest regarding the result of the valuation.
• d) They do not have an interest in the property.
• e) They are not a connected person to either the buyer or the seller of the property.
• f) They provide an impartial, clear, transparent and objective valuation report.
• g) The fee they receive is not linked to the result of the valuation.

Credit institutions should ensure adequate rotation of appraisers, i.e. two sequential individual valuations of the immovable property by the same appraiser should result in the rotation of the appraiser, resulting in the appointment of either a different internal appraiser or a different external appraisal provider.