FIG Commission 9 - Valuation and the Management of Real Estate

Work Plan 2015-2018

Original work plan in pdf-format

Terms of Reference

  • Valuation, being the estimating of value of all kinds of real estate by valuers and appraisers for various purposes, including market value, property taxation, eminent domain, investment, redevelopment and refurbishment, and for both public and private purposes;
  • Investment in real estate, investment planning and real estate investment vehicles;
  • Real estate finance, development finance, land use feasibility planning;
  • Real estate economics, markets and market analysis;
  • Real estate economics, markets and market analysis;
  • Management of all kinds of real estate at all levels;
  • Asset management for corporate private and public sectors;
  • Management of the use of buildings to ensure optimum benefits to occupiers.
  • Community perceptions and understanding about the surveying profession;
  • Participation in FIG Standards Network.

Mission Statement

The mission of Commission 9 is to:

  • To advance the professional practice of valuers and property managers working in all areas of real estate valuation and management;
  • To research and publish “best practice” for the benefit of valuers and property managers in different jurisdictions and sectors of the industry. This will benefit of the surveying community and improve our services to the wider public;
  • To facilitate and generate the exchange of information, knowledge and experience between surveyors for the benefit of the profession, our clients and the wider public;
  • §  To publicise and promote the work of surveyors to the public, particularly to young people, governments and non-government organisations and to enhance the value and perception of the value of surveyors and the services they can deliver, especially in support of the global sustainability agenda and the Millennium Development Goals;
  • To co-operate and work with fellow surveyors in all specializations of the profession to further the broader objectives of FIG.

General

This work plan focuses on three highly relevant themes, Property Taxation, Real Estate Market Policy Frameworks, and Valuation Methods and Standards.

Following on the successful previous four years of study, Commission 9’s Working Group 9.2 focuses on the efficient use of mass appraisal valuations. This continues to addresses international and pressing need in the use of property taxes for the benefit of local communities and demonstrates an important opportunity for FIG to continue to use the international experiences of its members to contribute to and inform the global debate on property taxation.

Working Group 9.1 will expand the debate surrounding the United Nations published the Policy Framework for Sustainable Real Estate Markets booklet. The aim of Working Group 9.1 is to discuss, analyse and expand upon the 10 principles within this text, to allow for greater understanding and applicability in their implementation. This should benefit all interested actors, government organizations, and non-government organizations.

Round Table Discussions 9.3 will identify the commonly used standards in different markets and study the valuation methodologies adopted. Local actors will share and discuss templates and techniques used so that the industry can broaden its base of knowledge, enhancing the ability of practitioners to support their local economies and professional organizations.

All of the Working Groups and Round Tables have the goal of expanding the knowledge bases and skill sets of our professional organizations, their individual members, national governments, non-government and international aid organizations, and by extension the global economy.

Working groups

Working Group 9.1 - Expanded Policy Framework for Sustainable Real Estate Markets  

Policy issues

In 2010, the United Nations published the Policy Framework for Sustainable Real Estate Markets booklet. This document provides a short discussion of 10 Principles and related guidance for the development of a country’s real estate sector. The aim of Working Group 9.1 is to discuss, analyse and expand upon these 10 principles, to allow for greater understanding and applicability in their implementation. In effect, this Working Group will broaden the discussion surrounding the individual 10 principles to include more specific details, as well as outline possible economic and social impacts. This should benefit all interested actors, government organizations, and non-government organizations as it relates to regulating, improving or developing a sustainable national real estate market.

An efficient, transparent, inclusive, just and economically integrated private real estate market is typically the second largest value sector in a nation (after human capital). If it is well functioning, the real estate sector is a core economic engine enhancing the efficient use of other capital and the labour markets. If it is poorly functioning, this creates drag on the growth of an economy and weakens the ability of the labour markets to produce to full potential.

The recent global economic crisis has shown that weak financial and real estate regulatory frameworks surrounding the real estate markets exacerbated the problems and contributed to a longer and more costly recovery process.  This expanded analysis of the Policy Framework for Sustainable Real Estate Markets is intended to provide more detailed guidance, promoting sound real estate markets both inside and outside the UNECE region.

A more detailed discussion of the 10 Principles and their role in an efficient, transparent, inclusive, just and economically integrated private real estate market can help the primary actors to more appropriately regulate their real property. This can accelerate the economic recovery, promote long-term sustainable development, create enhanced productivity of labour and other capital, lower risk levels, and enhance international stability.

Chair:

Steven Nystrom, USA
E-mail: nystrom[at]newstreamcompanies.com

Co-chair

To be announed

Workshop(s)/Seminars

To be announced

Publication(s)

An FIG Companion Book to enhance the understanding of the broader issues surrounding the 10 Principles as discussed in the 2010 United Nations Policy Framework for Sustainable Real Estate Markets booklet.

Timetable

  • 2015 Outline Discussion topics
  • 2016 Roundtable discussions regarding Principles 1 to 5
    1.   Integrated Legal Framework
    2.   Efficient Land Register and Cadastre
    3.   Efficiency of Services
    4.   Prerequisites for Development of Sound Real Estate Markets
    5.   Good Governance  
  •  2017 Roundtable discussions regarding Principles 6 to 10
    6.   Sustainable Financing
    7.   Transparency and Advanced Financial Products
    8.   Property Valuation
    9.   Social Housing
    10. Training and Capacity-Building
  • 2018 Presentation of the Companion Book to the FIG and submission to the UN for further comment and study

Beneficiaries

  • Beneficiaries of this research will be central and local governments in established and emerging economies, the public at large, real estate investors, nongovernmental organizations, financial institutions and development banks. All FIG member organisations, UN and other professional international and national organisations, and agencies will also benefit.

Working Group 9.2 – Valuation and Real estate management through Fin-tech

(changed November 2016)

Valuation and Real estate management issues:

A modern and sustainable surveying profession in support of society, environment and economy requires innovative, reliable and best practice solutions to our rapidly changing and complex world. One such technology is the blockchain.  It brings three essential elements:  First, it will secure the data such that it is incorruptible. Then, it will give the possibility of a public audit in almost real time. The auditor may audit every 10 minutes, unlike a typical yearly audit. Finally, it will reduce the friction in the recording and cost of registration of property rights, as citizens can use the service on their smartphone. The blockchain can thus be used as a notary service. A key element of the registration of property sales and real estate management is the use of third party services to assess the sale process. The use of this futuristic ideology of creating these essential elements through block chain is one of the tenets that can lead to more efficient real estate markets.

This working group focuses on fourth generation technologies used by the World Bank’s approach to land engagement. Blockchain technology has been hailed by custodians as being the future of the real estate management industry with potential to streamline processes such as land and property registration, valuation of property and many more digital actions. This could increase efficiency throughout the operation of land markets, impacting both both public and private purposes. 

This Working Group has aimed to ‘define’ the technology in its applications in the real estate management and valuation arena. The group also plans to draft a list of open items, questions and concerns regarding the adoption of blockchain technology that will act as a reference guide. The working group also aims to organise sessions with financial institutions to illustrate the impact of blockchain on trade processes in order to capture the views of institutions rather than ‘convince’ them of blockchain implementations. As a result of these consultations, the working group also plans to launch a central repository of information on the technology towards investment planning and real estate investment vehicles through better and more efficient valuation tools in developing countries and informal markets.

Chair

Manohar Velpuri, e-mail: manohar.velpuri[at]gmail.com 

Material:

Specific Projects

  1.  Does Fin-tech advance the professional practice of valuers and property managers working in most areas of real estate valuation and management;
  2. Research and publish “best practice use cases of Blockchain” for the benefit of surveyors in different jurisdictions and sectors of the industry. This will benefit the surveying community and improve our services to the wider public;
  3. Does Fin-tech’s third and fourth wave facilitate and generate the exchange of information, knowledge and experience between surveyors for the benefit of the profession, our clients and the wider public in relation to the World Bank’s fourth generation technologies on land engagements;
  4. Block-chain’s role in publicizing and promoting the work of surveyors to the public, particularly to young people, governments and non-government organizations. Additionally, to enhance the value and perception of surveyors and the services they can deliver, especially in support of the global sustainability agenda and the UN Millennium Development Goals;
  5. Does Fintech 3.0 and 4.0  lead to better alternative financing and sustainable real estate markets while also enabling better policy framework through reforms.

We will cooperate with Commission 7 as well as the Task force on Real Estate Market Study, as well as other Commissions as appropriate. The WG will also work in close co-operation with UN-Habitat and the World Bank. The results will be presented in a joint seminar with UN-Habitat and the World Bank, perhaps in connection to the World Bank conference in Washington DC 2017-2018.

Sessions

A seminar to tap the potential for relevant exchange of experience between countries and regions is being planned for the FIG working week in Helsinki May 2017 and other events of Commission 9. Real-life experience will be added to by future oriented crosscheck surveys and thematic analysis. Interaction between different groups of actors will be fostered both during the preparations and by the design of the seminar itself. The results will be presented at the World Bank conference in Washington DC 2018. In addition the subject will be discussed in each annual FIG Commission 9 meeting and working Week.
 
Publications

  • Technical papers presented in annual meetings.
  • Report on best practices results of using Blockchain in different countries.

Timetable

  • 2016-2018: research papers for Technical Sessions.
  • 2018: Final Report at FIG Congress.

Beneficiaries

All FIG member organizations, UN, other professional international and national organizations, agencies and governments.

Working Group  9.2 -  Mass Appraisal Systems - CLOSED

Policy issues

  • Property taxation recognises the social and economic value of real estate and provides revenue which (normally) funds public services, for the benefits of the wider community.  Valuers contribute to an efficient, effective and socially acceptable property tax in their role as assessors of the tax base. Technical valuation skills support appropriate methodologies, in particular, the use of Computer Assisted Mass Appraisal (CAMA) techniques, as well as ensuring improved access for the public to relevant information, advice and data.

  • However, the use of mass appraisals involves a degree of technical skill and knowledge which is beyond the understanding of the average taxpayer and which may involve a trade-off between efficiency and ‘justice’. This therefore imposes an additional responsibility on the valuation profession to ensure that the highest degrees of equity and ‘fairness’ are achieved within the limitations of the technology, and that acceptable levels of explanation and reassurance are available to all parties, particularly taxpayers.

  • This working group will investigate and publish appropriate guidelines for the development of mass appraisal techniques to support property tax assessments, including the appropriateness original data sources (property characteristics, sales, rents, yields, costs asking prices, or valuations) and of indices to monitor the property market, which will be particularly useful during the current economic climate.

  • Case studies will be explored showing where and when implementation was and was not successful so that key elements for a successful system can be identified. 

Chair

Varnavas Pashoulis, Cyprus
E-mail: var[at]cytanet.com.cy

Co-Chair

To be announced

Workshops/Seminars

To be announced

Publications

  • FIG reports, focusing on guidelines as to how best to develop, manage and implement mass appraisal techniques. Case studies will be used as explanatory examples.

Timetable

To be announced

Beneficiaries

Increasingly, property tax systems around the world are developing, implementing, and refining mass appraisal techniques to support tax assessments with the overall scope to generate public income to provide public services for the benefit of the community.  By doing this, there is a multi benefit effect, due to the fact that these assessments can also be used as the basis to support single property valuations by private or public bodies for advisory purposes, for Capital Gains Tax Assessments, for Transfer Fee assessment, for compulsory purchase purposes, as well as to publish property indices in order for the property market to be more transparent and efficient. . Thus, the outcome of this working group will support such initiatives as well as providing local authorities/municipalities, valuation standards organisations and those international organisations with an interest in securing equitable, effective and efficient public services for increasingly sustainable communities. While focusing on the needs of property taxation, this investigation into mass appraisal techniques will also benefit mortgage lenders who use such techniques in their assessment of loans and in monitoring the fluctuations of the property values and where appropriate to take precautionary measures either at booming or recessionary times. Also benefiting will be FIG member organisations, UN and other professional international and national organisations, agencies and governments and local authorities.

Working Group 9.3 - Valuation Methods and Standards Worldwide

Policy issues

  • Valuers contribute to an efficient, effective, transparent and healthy national economy in their risk analysis role in the real estate industry. Various countries and organizations educate their valuers differently, and regulations for analysis vary across national and financial boundaries. Differing scale of properties as well as differing property types such as retail, office, hospitality, multi-family, industrial, vacant and residential require very different analysis techniques. As such, there are a very wide range of techniques and expected norms around the world for the analysis of any specific property type.
  • There is an abundance of valuation report templates and techniques for the analysis of differing property types. Some are more accurate or efficient than others. However, few valuation professionals have access to more than a handful of these templates, limiting their ability to creatively address a specific appraisal problem. This limits the ability of the industry to improve and weakens the reliability of appraisal results used to make financial decisions. As such, the national economy and the real estate industry are weaker for the lack of broad template and technique sharing.
  • These roundtable discussions will bring together real estate professionals (valuers, managers, brokers, state and private ownership organizations) to share templates and techniques used to value and analyse specific property types.

Specific projects

  • Identify the commonly used standards in different markets and study the valuation methodologies adopted. Gather local actors to share and discuss templates and techniques.
  • Present and discuss the findings at FIG Working Weeks and Congress with information posted on the web-site for member and public reference.

Chair
David Smejkal, Czech Republic,
E-mail: david.smejkal[at]a-consultplus.cz

Co-chair

To be announced

Workshops/Seminars

  • To be planned for each annual meeting.

Publication

  • Technical papers presented in annual meetings.
  • Report on results of work group investigations and reports at Congress 2018.

Timetable

  • 2015–17: research papers for Technical Sessions.
  • 2018: Final Report at FIG Congress.

Beneficiaries

  • All FIG member organizations, UN, other professional international and national organizations, agencies and governments.
Added July 2017

FIG Joint Working Group Commissions 9 and 7 – Development of a Valuation Component for the ISO 19152:2012 Land Administration Domain Model

Valuation and taxation of land and immovable property is related to the many processes of land management for achieving towards Sustainable Development Goals (Plimmer and McCluskey, 2016). The political aspects of these processes are critical, but this research addresses the information contents/ systems aspect. As indicated by Voluntary Guidelines on the Responsible Governance of Tenure, appropriate [information] systems are needed for fair and timely valuation of tenure rights for land and property taxation, and other public and private sector activities (e.g. expropriation, real estate financing, investment analysis) (FAO, 2012, 18.1). Habitat III New Urban Agenda promotes supporting of ‘local governments and relevant stakeholders, through a variety of mechanisms, in developing and using basic land inventory information, such as cadastres, valuation and risk maps, and land and housing price records, to generate the high-quality, timely and reliable data needed to assess changes in land values’. (UN, 2016, 104). This research focuses on development of an international data standard for the aforementioned valuation inventories or databases.

There are several international standards related to the procedural and measurements aspects of immovable property valuation issued by organizations such as International Valuation Standards Council (IVSC), The European Group of Valuers’ Associations (TEGoVA), and International Association of Assessing Officers (IAAO). In addition to these standards, the geospatial community has facilitated the development of a number of domain specific data standards that specify the 2D and 3D geographical aspects of property units, such as ISO 19152:2012 Land Administration Domain Model (LADM), OGC CityGML, IndoorGML and LandInfra/InfraGML. Despite the existence of the above-mentioned standards, there is no internationally accepted standard that defines the data content or semantics of valuation databases, such as the entities, attributes/properties, relationships, and constraints of the information model.

The ISO LADM presents a conceptual schema for the specification of property units and their legal and geometric characteristics recorded at cadastre and land register, and relates these datasets with other property related datasets (e.g. addresses, utility networks, building (units), valuation, taxation, land use, land cover) recorded at external registrations. It defines semantics of land administration systems mainly focusing on legal requirements, but also provides a formalism, which allows for an extension that responds to fiscal requirements.

The aim of this Joint Working Group is to define the semantics of valuation information maintained by public authorities especially for recurrent taxes on immovable property, and to extend the scope of LADM from a fiscal perspective to provide an information model that could be used to construct information systems for property valuation. The expected outcome is to provide a common basis for governments to direct the development of local and national databases, and for the private sector to develop information technology products. The LADM Valuation Module is foreseen as input to ISO TC211 for the revision of ISO 19152:2012, which starts in 2017 and should result in LADM 2.0.

Chair:

Volkan Çağdaş

Co-Chair(s):

Peter van Oosterom, Christiaan Lemmen, Erik Stubkjær

Workshops/Seminars:

  • 2017. A special session or meeting in FIG Working Week 2017, Helsinki.
  • 2018. A workshop in FIG General Congress 2018, Istanbul.

Timetable:

  •  2017 Activities
    •  Providing input to the preparatory ISO 19152 Meeting on the Second Edition of the Land Administration Domain Model (ISO TC211, FIG, OGC UN-GLTN), 16-17 march 2017, Delft, The Netherlands.
    • Presenting and discussing the first version of Valuation Extension Module in FIG WW 2017, Helsinki with a group of invited experts from FIG Comm. 7, Comm. 9, and FIG Standards Network, ISO TC 211, OGC Land Administration DWG, IVSC, TEGoVA, IAAO and other relevant bodies; and finalizing research plan, objectives and further activities.
    • Evaluating and reporting results of ‘Questionnaire for the development of ISO 19152:2012 LADM Valuation Module’, publish all completed questionnaires on http://isoladm.org/.
    • Reviewing the standardisation of valuation in ISO 19152 by ISO TC 211.
    • Developing the second version of Valuation Extension Module, based on outcomes derived from previous activities.
  • 2018 Activities
    •  Organizing a Workshop in FIG General Congress 2018, Istanbul to present and discuss on outputs of WG.
    • Develop one or more country profiles of the LADM 2.0 valuation package.
    • Implement prototype system (database), populate this with real cadastral and valuation data (including time-series).
    • Demonstrating outcomes of WG research activities through scientific papers.

Beneficiaries:

Beneficiaries of this research will be national valuation and taxation administrations at central and local levels; international organizations working on property valuation, taxation and land administration in broader context, such as International Association of Assessing Officers (IAAO), International Property Tax Institute, United Nations (UN) Global Land Tool Network

Co-operation with Other Commissions and organisations

Commission 9 will support and contribute to FIG task forces, and, in particular, to the Property Markets Task Force, the Young Surveyors Network, the United Nations organizations, UNECE, WPLA, REAG, FAO, UNHABITAT, GLTN, and the World Bank. It is envisaged that such international organisations will be particularly interested in the work of the Working Group 9.1 and 9.2. The possibility of joint events will be investigated.

Co-operation with United Nation Organisations, Sister Associations and other Partners

Commission 9 is co-operating with FAO, UNECE, GLTN and UN-HABITAT on Commission 9 related issues.

Commission 9 will investigate co-operation opportunities with a range of relevant international organisation, including the Internal Property Taxation Institute (IPTI), International Association of Assessing Officers (IAAO) and the Lincoln Institute of Land Policy.


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