A BRIEF GUIDE ABOUT REAL ESTATE APPRAISAL FIRMS
The appraisal companies (AC) are professional institutions which employ appraisers to determine the values of real estates, components of the real estates and real estate projects by gathering and analysing the relevant information with respect to the generally accepted international valuation standards.
The establishment requirements for the AC's that will operate under the capital market regulations are as follows;
- It should be established in the form of a joint stock corporation.
- Its shares must be issued in return for cash.
- Its paid in capital must be minimum TL 1.000.000 (This figure is valid for 2019 and it is increased in accordance with inflation rate every year.)
- Minimum 51% of its paid-in capital must belong to at least two responsible appraisers.
- Including the responsible appraisers at least 10 appraisers must be employed.
- It must have adequate office, equipment and employees.
Requirements for Partners, Managers, Appraisers and Internal Auditors
The partners, managers, appraisers and internal auditors of the AC's:
- Must not be convicted of crimes like embezzlement, misappropriation, corruption, bribery, breach of confidence, forgery, stealing, defraud, smuggling or breach of the Capital Markets Law, the Banking Law and the Anti Money Laundering Law.
- Must not be insolvent.
- Should not be among responsible persons; for the termination of operation licenses of capital market institutions, or for the annulment of stock exchange membership of institutions.
- Should not be barred from transactions in the stock exchange.
The main operational principles of the AC's are as follows:
- The AC's and their appraisers are responsible for the losses inflicted on their customers or third persons due to the deficiencies in the appraisal reports they prepared.
- The AC's and their appraisers must be objective, neutral and away from conflicts of interest.
- AC's may not operate in other fields than appraisal.
a) May not be employed by more than one AC.
b) May not work as a real estate broker.
c) May not accept works beyond their expertise.
d) May not be employed by a customer they have served until at least two years passed.
- Appraisers, managers or internal auditors may not use or make public the secret information they access due to their works except for the cases of an open consent of the customer, a demand by public institutions with regard to relevant regulations or a demand by the Turkish Appraisers Association for professional purposes.
- The AC's must sign an appraisal contract with their customers which should include the essential conditions.
- The appraisal fee may be decided freely by the AC and its customer, but the fee may not be based on a pre-determined appraisal value and may not be decided after the appraisal, or the payment of the fee may not be conditional.
- The appraisal reports of the AC's must include the standard information laid down in the regulations.
- The AC's should take out a professional liability insurance policy.
Turkish Appraisers Association
The Turkish Appraisers Association is a self-regulatory professional association established as a public legal entity according to the Capital Markets Law. The AC’s and the licenced appraisers should apply to the Association for membership. Detailed information about the Association can be found at its Internet site which is www.tdub.org.tr.