As of November 2013, a new property valuation procedure has been introduced in Ukraine. The mechanism was supposed to start functioning back in August, but the Cabinet decided to hold over the innovation for three months. As it turned out, there were not enough "certified" specialists- appraisers, who according to the new rules had to take courses, pass exams and get a certificate of competence.
According to the Justice Ministry, then there were only 161 individuals and 95 legal entities, permitted to carry out valuations by the new rules. Considering the country size, the figures are indeed poor. As of today, though, the number of experts, having the right to assess property, are more than 1500.
In this article ForUm reviews the new property valuation procedure, its peculiarities and possible risks.
Staff readiness
Training of specialists on property valuation started in June of this year, and for four months already 1758 individual appraisers and 1086 administrators of companies engaged into valuation activities have taken classes and got certificates of competence. Head of the State Property Fund Oleksandr Ryabchenko informs that as of October 30, 2013 the State Registry of individual appraisers and legal entities engaged into valuation activities numbered 1540 individual appraisers and 347 legal entities with 644 representative offices. "It means the population can apply to any of 991 offices to get the valuation services," he said. According to the official, the full list of appraisers can be found on the website of the Fund. Licensed appraisers work in all regions of Ukraine, though Kyiv and Odessa are the most concentrated markets.
As for specialists, who have been working on the market but have not completed the training by November 1, they no longer have the right to provide valuation services. To resume the activity they must take seven-day courses and pass exams. There is only one detail - the training is not free of charge. In total, such advanced training costs 4051 hryvnias. Moreover, according to the new rules, only university-educated individuals can become appraisers.
Citizens, who have recently obtained valuations of "uncertified" (by current standards) specialists, can take breath. The next three months - till February 2014 - have been given for a transition period, during which all valuations issued earlier will be considered valid.
Nuances of the system
The State Property Fund informs that the property valuation procedure itself has changed and now is based on a common technological program, availability of which is compulsory for obtaining the right to carry out valuation activities. "Now it is not an appraiser, who comes to your apartment and says it costs a certain sum, but a computer program, which makes calculations. Thus, an appraiser measures a property, inserts the data into the program, and the program estimates the cost," Ryabchenko says. Moreover, property valuation can be carried out remotely. A customer just need to fill in a special datasheet and send it to an appraiser through Internet. Then the parties agree on cost and payment for the service, and when the valuation is done the customer can get his documents. After the valuation procedure, the data will be entered into the national registry of valuation reports.
The State Property Fund also points out that while developing the new procedure the department aimed at minimizing the contact between customer and appraiser in order to minimize the risks of corrupt practices. "We've had a case when an apartment on Khreshchyatyk street was appraised at 20 thousand hryvnias," the official says.
Time and money
At the first stage the valuation procedure will last about two weeks. As Oleksandr Ryabchenko explains, the time is needed to get used to the system, but when it is proven, less time will be required. "We give two weeks to prove the system, but then the valuation procedure will take only a week, and when this market is settled, the term of service delivery will be reduced to three working days," he says.
As for the valuation service costs, there is no decisive answer. There are no state tariffs for this service, and there cannot be any, as it is a competitive market of non-state structures, Ryabchenko says. "In fact, I stand against any involvement of the state into the activities of business companies, otherwise it may become a leverage for corruptive practices. Let appraisers compete among them. The one who provides cheaper services will get more clients, as simple as that. As of today, the starting price for the property valuation service makes 200 hryvnias," he adds.
To keep in mind
It should be noted that the cost of an apartment, determined by an appraiser, may differ from the cost, stipulated in the agreement of sale and purchase. But in any case, Ukrainians will pay the tax from the price, established by the appraiser. Thus, if an expert valuates an apartment at 100 thousand hryvnias, but the owner sells it at 50, 150 or 500 thousand hryvnias, the tax will be calculated from 100 thousand hryvnias anyway.
Tetyana Matsur
According to the Justice Ministry, then there were only 161 individuals and 95 legal entities, permitted to carry out valuations by the new rules. Considering the country size, the figures are indeed poor. As of today, though, the number of experts, having the right to assess property, are more than 1500.
In this article ForUm reviews the new property valuation procedure, its peculiarities and possible risks.
Staff readiness
Training of specialists on property valuation started in June of this year, and for four months already 1758 individual appraisers and 1086 administrators of companies engaged into valuation activities have taken classes and got certificates of competence. Head of the State Property Fund Oleksandr Ryabchenko informs that as of October 30, 2013 the State Registry of individual appraisers and legal entities engaged into valuation activities numbered 1540 individual appraisers and 347 legal entities with 644 representative offices. "It means the population can apply to any of 991 offices to get the valuation services," he said. According to the official, the full list of appraisers can be found on the website of the Fund. Licensed appraisers work in all regions of Ukraine, though Kyiv and Odessa are the most concentrated markets.
As for specialists, who have been working on the market but have not completed the training by November 1, they no longer have the right to provide valuation services. To resume the activity they must take seven-day courses and pass exams. There is only one detail - the training is not free of charge. In total, such advanced training costs 4051 hryvnias. Moreover, according to the new rules, only university-educated individuals can become appraisers.
Citizens, who have recently obtained valuations of "uncertified" (by current standards) specialists, can take breath. The next three months - till February 2014 - have been given for a transition period, during which all valuations issued earlier will be considered valid.
Nuances of the system
The State Property Fund informs that the property valuation procedure itself has changed and now is based on a common technological program, availability of which is compulsory for obtaining the right to carry out valuation activities. "Now it is not an appraiser, who comes to your apartment and says it costs a certain sum, but a computer program, which makes calculations. Thus, an appraiser measures a property, inserts the data into the program, and the program estimates the cost," Ryabchenko says. Moreover, property valuation can be carried out remotely. A customer just need to fill in a special datasheet and send it to an appraiser through Internet. Then the parties agree on cost and payment for the service, and when the valuation is done the customer can get his documents. After the valuation procedure, the data will be entered into the national registry of valuation reports.
The State Property Fund also points out that while developing the new procedure the department aimed at minimizing the contact between customer and appraiser in order to minimize the risks of corrupt practices. "We've had a case when an apartment on Khreshchyatyk street was appraised at 20 thousand hryvnias," the official says.
Time and money
At the first stage the valuation procedure will last about two weeks. As Oleksandr Ryabchenko explains, the time is needed to get used to the system, but when it is proven, less time will be required. "We give two weeks to prove the system, but then the valuation procedure will take only a week, and when this market is settled, the term of service delivery will be reduced to three working days," he says.
As for the valuation service costs, there is no decisive answer. There are no state tariffs for this service, and there cannot be any, as it is a competitive market of non-state structures, Ryabchenko says. "In fact, I stand against any involvement of the state into the activities of business companies, otherwise it may become a leverage for corruptive practices. Let appraisers compete among them. The one who provides cheaper services will get more clients, as simple as that. As of today, the starting price for the property valuation service makes 200 hryvnias," he adds.
To keep in mind
It should be noted that the cost of an apartment, determined by an appraiser, may differ from the cost, stipulated in the agreement of sale and purchase. But in any case, Ukrainians will pay the tax from the price, established by the appraiser. Thus, if an expert valuates an apartment at 100 thousand hryvnias, but the owner sells it at 50, 150 or 500 thousand hryvnias, the tax will be calculated from 100 thousand hryvnias anyway.
Tetyana Matsur
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