Errors and omissions from professional services

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errors and omissions from professional services provided including undertaking valuations for a wide variety of purposes and valuation-related services. Key Exposures: Unfavourable economic conditions inducing claims Unclear instructions / communications Poor Investigation / analysis of subject property Inappropriate valuation methodology / calculation Conflicts of interest – disclosed or otherwise Breach of contract retainer Failure to adequately inspect / investigate property Failure to adequately assess comparable sales Failure to make adequate enquiries about property Undertaking higher risk valuations API Code of Professional Conduct.… The Code of Professional Conduct (“the Code”) is a public statement of the principles, values and behaviour expected of Members of the Institute, as determined by the National Council. The purpose of the Code is to ensure that high standards of corporate and individual behaviour are observed by all Members. The following are the broad issues governed by the code: Relations with clients Conflict of interest Impartiality Members and the institute Copyright Property valuations Student and provisional members
Non-compliance Members shall not accept an assignment that is contingent upon or influenced by any condition or requirement for predetermined results where the exercise of objective judgement is required. Members shall maintain the strictest independence and impartiality in undertaking their professional duties. To this end, no Member shall: adopt the role of advocate in a case where their duty is to exercise independence and impartiality; allow the performance of their professional duties to be improperly influenced by the needs or preferences of a client or other party; rely upon critical information supplied by a client without appropriate qualification or confirmation from other sources; act in any other way inconsistent with the duties of independence and impartiality. Common causes of professional negligence.… 1. Valuing property outside the valuer’s experience / expertise 2. Valuing property outside the valuer’s locality / area of experience and knowledge. 3. Failing to adopt all possible valuation methods as a check and, in particular, failing to stand back and look at the end result to see whether or nor reality would support the figure reached by other methods. 4. Failing to thoroughly inspect the property. 5. Failing to inspect at all. 6. Failing to take sufficient time to undertake the valuation and, as such, failing to obtain available information that would have led to a different conclusion. 7. Failing to observe the signs of the market, particularly the potential for the boom to end. 8. Failing to properly verify or verify at all information relied upon that was provided by one’s client, the vendor, other valuers, real estate agents, and others generally, etc. 9. Failing to properly measure the property and, in particular, accepting without reservation information provided on plans drawn up by others.

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