By way of an introduction to the Online Insider community here is his brief overview of the history and value of aligning valuation with arbitration.
VALUATION AND ARBITRATION
Valuation and arbitration have long worked in parallel. This stems from the professional service provided by valuers, coupled with the now defunct Arbitration Act 1908 interpreting arbitrator as including valuer.
Many past valuation arbitrations involved simply a meeting of valuers for each party and a short award.
As commerce developed during the 20th century the process became more sophisticated, to the point of some arbitrations being conducted akin to full Court hearings and at quite considerable cost to parties.
The recent tight economy has had several outcomes, including:
- Increased levels of dispute over property matters, where the valuation profession can provide helpful input.
- Pressure for cost reductions in some quarters.
- The Kiwi do-it-yourself philosophy, where valuation assistance is often not sought until difficulties arise.
It is inevitable at least some of these aspects are a passing trend, partly driven by the property economic cycle of falling values on the back of the world economic crisis.
The challenge for valuers is to continue providing a service in keeping with accepted professional standards. This expands into the profession communicating it is a worthy information source in the early property transaction stages rather than deferral until parties have become entrenched in time-consuming and costly wrangling.
A positive outcome is a recent trend for lenders to revert to valuations when considering loan applications, with a goal of reducing debt exposure.
Several recent valuation practise mergers have occurred, with expectedly economies of scale. While on one hand that reduces the pool of competing practises it has the advantage of a wider market intelligence catchment within each enlarged group.
The reduction in the number of practises introduces a further challenge, the potential for conflict of interest when a number of professionals are grouped and have previously serviced competing clients. Conversely some previously conflicting client-bases are reducing through the likes of mergers. A good example is last year’s creation of the Auckland Supercity, where some seven previous territorial authorities serviced by a variety of valuation practises have merged into one.
About Bob Hawkes
Bob Hawkes is a valuer and property consultant who retired from private practice at the end of 2010 but remains available for dispute resolution roles, with past appointments including as sole arbitrator for a number of domestic arbitrations, adjudicator under the Construction Contracts Act 2002, mediator and third expert sole dispute resolution determiner. He has acted as expert witness, particularly in alternative dispute resolution. His property background is wide and varied, spread over 52 years, having been firstly a survey draughtsman, followed by central and local government public works property acquisition and compensation negotiator roles, property manager for a major local government authority and NZ national department store chain, government urban valuer and private practice property consultant and urban valuer. He is a Fellow of the Arbitrators’ and Mediators’ Institute of New Zealand and on the Institute’s panels of arbitrators, adjudicators and mediators. During his career he has maintained involvement in Institute affairs, both for AMINZ and for the New Zealand Institute of Valuers and Property Institute of New Zealand. This has included as a dispute resolution practice presenter/trainer for the latter two. For fuller personal detail see his website – www.hawkes.co.nz.
Bob’s specialist contribution to Green and Hunt on Arbitration Law and Practice, a chapter titled ‘Real Estate Valuation and Rent Review Arbitrations’, will be available on Brookers Online shortly in the Alternative Dispute Resolution database.
Explore Green and Hunt online. Click the link to take you to the Brookers Online page shown in the screen shot below. To find Green and Hunt open the Alternative Dispute Resolutions data base.
(For those of you with paper (looseleaf) only subscriptions the chapter will be available in your next update which goes to print early July.)
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