Powered by MOMENTUM MEDIA
the adviser logo
Growth

Inspection requirements for vacant land unchanged: API

by James Mitchell5 minute read

The Australian Property Institute (API) has clarified that the inspection requirements for vacant residential land have not changed.

The clarification comes after industry confusion over the matter, which was reported by The Adviser earlier this week.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

The API confirmed that it has not removed its advice to members in relation to the identification and physical inspection of unregistered and registered vacant land.

However, on 8 October, the API advised its members that member alerts on ‘pre-purchase’ valuations, sent out on 17 and 24 September, have been withdrawn effective immediately.

Advertisement
Advertisement

“While the intention behind these member alerts was to eliminate the use of valuations on the PropertyPRO product for ‘pre-purchase’ purposes, the unintended consequence has been that legitimate mortgage security valuations have been detrimentally affected by the previous alerts,” the API said in a statement.

The API wishes to clarify that the ‘pre-purchase’ announcement is a completely separate issue to the inspection requirements for vacant residential land.

Speaking to The Adviser, the API’s national manager of professional standards, Kevin Thompson, said that the API sent out an alert to members regarding a change to the inspection requirements for vacant land that became effective on 28 September.

“Purchasers buy off-the-plan, and quite often it is site unseen. But the industry can’t allow valuers to value off-the-plan site unseen. So the latest instruction has made it clear that the valuer must physically identify and inspect the land,” he said. “That has always been the case.”

Mr Thompson said that in the past there has been some ‘professional judgement’ exercised by valuers because of time pressures to complete a valuation quickly.

“They may have then said in their report that, possibly because of construction works or other obstacles, they could not access the site, but made a valuation anyway,” he said. “The lender would then make a decision based on that.”

However, Mr Thompson said there have been some instances where valuers have missed things like transmission lines or a feature of the surrounding land that had an effect on value when identification and physical inspection hasn’t been undertaken.

“A few lenders decided they weren’t willing to take that risk anymore,” he said. "As a result, valuers are still required to physically inspect vacant residential land.”

 

Inspection requirements for vacant land unchanged: API
land  x
TheAdviser logo
land  x

James Mitchell

James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

mark lewis fast ta llosc4

In Memoriam: Mark Lewis, 1963–2022

Mark Lewis passed away on Saturday (13 August). Mr Lewis was a well-known identity in the third-party broker...

READ MORE
anthony waldron mortgage choice ta ithtxm

Broker expertise key for securing right loan: Mortgage Choice

The data, which is derived from a June survey of 1,002 broker customers and conducted by Honeycomb Strategy,...

READ MORE
Mark Bouris new ifa

Brokers need to focus on the ‘value-add’: Mark Bouris

With competition among brokers increasing as the number of brokers rises – coupled with the fact that fewer...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more