Charges related to bank loans are expected to rise after the Kamra tal-Periti (KTP) issued a stiff warning to architects to stick to the tariffs established by law when asked by clients to establish the value of properties used as security for loans.
Architects were reminded of their duty to inspect properties that are used as security for loans, before establishing their value.
When valuing a property above €2,096, architects are legally bound to charge 30c for any additional €100 above that sum. Properties valued below €2,096 carry a cost of less than €15.
This means that they have to charge €359 (Lm152) for an average priced urban property valued at €116,500 (Lm70,000).
Valuations by architects are often required in order to assist a bank when granting a loan using the property being valued as a security.
MaltaToday is informed that it is common practice among some architects to impose very low nominal charges when they value the property. Some architects do not even inspect properties before establishing their value.
Contacted by MaltaToday, KTP president David Felice made it clear that architects who charge less than the amount due by law would be liable to disciplinary action. “The law is clear in this regard; architects would certainly be in breach of the Code of Professional Conduct, which forms part of the Subsidiary Legislation of the Laws of Malta and therefore they may be subjected to disciplinary action as established by the Periti Act.”
KTP has recently written to remind architects they are legally bound to charge fees established by law and to warn them that charging ad hoc fees is in breach of the Code of Professional conduct.
The KTP also reminded architects of the serious legal implications of a bank loan furnished on the basis of an incorrect or misleading valuation or one which is not based on a comprehensive inspection of the property.
“This can cast a very bad light upon the integrity of the profession.”
According to Felice the circular was issued after the chamber’s unanimous approval in an Extraordinary General Meeting: a major overhaul to the regulatory framework that governs the profession. This includes a revised Code of Conduct including new disciplinary measures, radical changes to the Periti Act, the introduction of mandatory Professional Indemnity Insurance cover and proposals to change the way that periti seek remuneration for their services.
According to Felice the circular is part of a process, across the range of services being provided by periti, “that demands that architects provide the highest level of service to consumers.”
“While the chamber appreciates the difficulties that periti face when operating in the market, there is a minimum level of quality of service below which a satisfactory standard of service cannot be provided and where they would therefore risk being unprofessional.”
The Chamber is also not satisfied with current banking procedures related to the provision of loans. “This includes the lack of clarity on who effectively is the client – is it the bank or is it person taking the bank facility?”
KTP recently requested meetings with banks.
“We intend proposing to the banks a common procedure for the compilation and provision of valuation reports, based on the guidelines already issued by the Kamra.”