The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The appraisal management system being pushed by two Canadian-owned banks has “far reaching implications” that should make all Bahamian property owners “very concerned”, a well-known realtor warned yesterday.

Morley Realty’s Christopher Armaly told Tribune Business that the key issue for consumers, under the system desired by Royal Bank of Canada (RBC) and Scotiabank, was that ownership of their appraisals would no longer be restricted to just themselves, the appraiser and their bank.

“There are far-reaching implications not only for the Bahamas Real Estate Association and the appraisers, but for the public,” Mr Armaly told Tribune Business.

“If I was a Bahamian that owned property, I’d be very concerned about having my information available on an electronic system that could be accessed by clients of NAS.”

As reported extensively by Tribune Business over the past weeks, the two Canadian-owned banks have wanted to impose NAS Valuation Services, another Canadian-owned firm, as an appraisal management intermediary in the Bahamas.

Under the terms of the proposed contract between NAS and Bahamian appraisers, which BREA members have vehemently objected to, all appraisals conducted for the Canadian firm will become its property - not that of the appraiser or the property owner.

As a result, all appraisals conducted for NAS and its bank clients would be available - and accessible - on its electronic system to other realtors and appraisers.

“It actually is the property of NAS, and they can choose whatever it is they want to do with it,” Mr Armaly told Tribune Business.

“People are looking at the now, but I look three-four steps down the road, and where it’s going to end up. If this happens to go through, I would find any which way to not have an appraisal done, as my appraisal is my business - between myself, my realtor and my banker.”

Royal Bank subsequently pulled back from its deadline for Bahamian appraisers to sign the NAS contract, after BREA expressed concerns.

And Scotiabank, in a statement, added: “We are in touch with BREA directly with a view to addressing their concerns.

“Scotiabank has not given the appraisers a deadline by which to sign the proposed agreement, as we are aware that they had concerns and have been awaiting their formal communication to us on them.”

Mr Armaly said that personally he would refuse to sign the NAS agreement, and would give up appraisal work if he had to.

“I will not be subject to this and have it come back in my face, with my clients blaming me for x, y and z,” he added.

The Morley Realty appraiser/realtor said another issue was NAS’s foreign ownership, given that the law reserved the industry for Bahamian nationals and permanent residents with the right to work.

“Right now, we’re protecting the Real Estate Broker’s and Salesman’s Act, because we’re being regulated by a foreign entity,” Mr Armaly said.

Pointing out that BREA was the real estate industry regulator, he added: “Who’s going to regulate NAS? NAS can’t be regulated under the Broker’s and Salesman’s Act because it is not Bahamian.

“We are the organisation that regulates real estate in the Bahamas. It seems that law went out the window. If the Bahamas is supposed to be for Bahamians, this clearly isn’t the case.”

Mr Armaly acknowledged that “some of us in this profession have no one but to blame but ourselves” for NAS’s arrival on the scene, given the problems caused for banks by distressed properties that had been substantially overvalued.

“I’ve seen some ridiculous valuations, ridiculous appraisals,” he added, citing a two-bedroom, one bathroom home in Sir Lynden Pindling Estates that had been appraised at $500,000.

However, Mr Armaly said the valuation, and location, should have been an immediate “red flag” to any loan/mortgage officer.

And he said too many bankers simply “flip” to the valuation, rather than read the appraisal fully - something that would enable them to detect this.

“This was being done with little consultation,” Mr Armaly added of the banks’ NAS plan. “We want to work with a system that is streamlined and where everyone’s accountable, but I don’t see why we have to bring in a foreign-owned entity to do so.”

He said NAS’s proposal for appraisers to accept work in bulk would leave realtors with less time to spend on each, and result in a drop in quality.