No censure for rogue property valuers
Rogue valuers at the heart of property frauds that destroyed mum and dad investors' wealth have escaped censure by both the industry and authorities.
The valuation industry says successive governments have failed to deal with old legislation which restricts its ability to crack down on dodgy valuers.
Valuers for hire, or "tame" valuers, came into focus last year after the Serious Fraud Office (SFO) said it would prosecute several for their involvement in property scams which defrauded banks and homebuyers.
No prosecutions have occurred.
Registered valuers gave credibility to the scams which saw properties purchased and then on-sold, sometimes within days, at inflated prices to unsuspecting investors who took out mortgages on the basis of the valuations.
Cancer-stricken Blues rugby player Kurtis Haiu was one of many alleged victims of Auckland property investor Glenn Cooper, who often relied on valuations from Michelle Tierney of Tierney & Partners.
Tierney's valuations have also been questioned in relation to loans made by Hanover Finance, SBS Bank (formerly the Southland Building Society) and the Public Trust.
Tierney was bankrupted by the Southland Building Society and Tierney & Partners was liquidated owing over $6.5m to SBS. However, she hasn't faced industry censure and only lost her industry registration because of the bankruptcy.
BusinessDay has been contacted by several valuers unhappy about the industry's failure to act against Tierney. At least two complaints had been made about her, both of which "went nowhere", an industry source said.
"It's very frustrating. There was clearly something wrong, yet nothing was done," the source said.
The industry operates under the Valuers Act 1948. It's this legislation which the NZIV said needed to be overhauled. The Valuers Registration Board (VRB) oversees registration and discipline under the Act. It is a statutory body independent and separate from the NZIV.
The VRB wouldn't confirm if it had ever received a complaint about Tierney, citing natural justice. It also wouldn't say if it had a current investigation running against her.
It has made one prosecution against a valuer for involvement in what it termed a "price-hydraulic scam". This was in 2005.
In 32 years the VRB had suspended 10 members and struck off 14 - its harshest penalty.
As it stands the NZIV has no powers at all to act against it members - it can't even expel a member from the institute, NZIV president Terry Naylor said.
"If a government had acted on our request to review the act over a decade ago we may have been in a position where we could act – however, the act ties our hands on this front."
All it can do is forward complaints to the VRB, Naylor said.
He said the industry recognised there was a problem in some rare cases and the industry's priority was to protect the public and the reputations of the vast majority of valuers.
A quality assurance and accreditation system had been established and the NZIV would be the first organisation in the world to offer International Valuation Standards for free beginning in December, he said.