The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Real Estate Association’s (BREA) president yesterday expressed hope Royal Bank of Canada (RBC) had pressed “the reset button”, after it postponed plans to impose an appraisal management company on the industry.

Speaking after a positive meeting between top RBC executives and BREA’s appraisal committee, Franon Wilson told Tribune Business that the two parties had seemingly “stepped back from the edge”.

He disclosed that Royal Bank had indefinitely postponed plans for NAS Appraisal Services, another Canadian company, to take over the management of appraisals for all properties it plans to hold as collateral for mortgage loans.

Tribune Business exclusively revealed yesterday how the dispute between Bahamian realtors/appraisers and RBC and Scotiabank, over the latter’s plans to impose NAS and its system on them, was coming to a head.

Royal Bank had wanted all appraisers to sign up to the NAS contractual agreement by today, but Mr Wilson confirmed that the bank had agreed to waive this deadline.

Disclosing that the appraisal committee met with Royal Bank’s top Bahamas-based executives prior to BREA’s planned full Board meeting, Mr Wilson told this newspaper: “As a result of that meeting, NAS Appraisal Services will not start operations tomorrow [today].

“Royal Bank listened to the concerns the appraisal committee had about it, they committed to review those concerns, and continue the dialogue with BREA.

“The bank reaffirmed the fact it views BREA as a partner, not as an adversary. From everything that transpired so far, it looks like the reset button has been pushed.”

One realtor source, speaking on condition of anonymity, told Tribune Business that while Royal Bank of Canada had backed off its NAS plan for the moment, it had not abandoned it.

“In a nutshell, everything’s postponed,” the source said. “The crunch, if there is a crunch, will come down the line.”

Mr Wilson said BREA’s Board would now wait to hear from Royal Bank, and anticipated further discussions on the issue.

“The next step for the appraisal committee is to look to have similar conversations with Scotiabank to ensure it knows the concerns of the appraisal committee as well,” the BREA president told Tribune Business.

Despite repeated efforts, Tribune Business was unable to obtain a response from Scotiabank (Bahamas) prior to press time last night.

And Jan Knowles, Royal Bank of Canada’s spokesperson, said simply: “I wish to advise that we are in discussions with representatives of BREA, and regrettably we are not in a position to comment further at this time.”

Still, Mr Wilson said: “We seemed to be at the edge and have taken a step back.”

He added that yesterday’s meeting was “truly needed” to help both sides - realtors and banks - understand each other’s concerns before getting into the appraiser agreement proposed by NAS, and what it contained.

BREA members, he explained, needed to understand why the banks felt NAS’s services and system were necessary, but also be given the opportunity to offer alternatives.

“There was no time set for when the bank would get back to BREA, and from BREA’s standpoint, there’s no pressure to rush,” Mr Wilson added. “We want the banks to understand what we’re saying.”

Tribune Business revealed earlier this weeks how realtors were complaining that RBC and Scotiabank were both employing ‘strong arm’ tactics to force appraisers to sign up with NAS.

This newspaper was informed that Royal Bank had orally warned BREA members that unless appraisers sign the NAS contract by today, they will no longer receive any work from the bank.

While that demand has now been dropped, it is unclear what changes - if any - will be made to the terms of the NAS contract that realtors were being asked to sign.

The contracts were said to be heavily slanted in NAS’s favour, as these completely “indemnify” NAS Valuations Inc against claims and lawsuits initiated by both realtors and appraisal clients.

Real estate sources said other objectionable clauses in the contract included those that required the Bahamian realtor/appraiser to pay all its legal costs should homeowners (any third parties) file a lawsuit against it.

This newspaper’s sources also previously expressed concern about whether Bahamian law and regulations allowed NAS to even operate in this nation, given that the Real Estate Act says only Bahamian nationals and foreign permanent residents with a right to work can be licensed as realtors.

Tribune Business was told that when NAS first applied for a Business Licence in the Bahamas, it held itself out as a computer software/services company, rather than an appraisal management firm.

If the NAS system had been implemented, rather than Bahamian appraisers dealing directly with Scotiabank and Royal Bank of Canada on property appraisals, they would interface with NAS, who would collect their work, submit it to the bank and be responsible for paying them.

In addition, Tribune Business was told NAS would also have sought to ‘categorise’ Bahamian appraisers according to their expertise and specialisation, dividing them into those who will do high, mid and low-end residential valuations respectively.

Robin Brownrigg, Bahamas Realty’s president and a leading appraiser, told Tribune Business previously that NAS and its system were a ‘game changer’ for the way Bahamian appraisers did business.

He said: “At this stage of the game, our professions are in jeopardy and our livelihoods, to a great degree, are in jeopardy.

“If I lose the appraisal base for Bahamas Realty, we may as well close up and call it a day. We can’t take any more in this economic climate. It’s got us hugely, hugely concerned.”