Sometimes the easiest way to explain the exact function of a Chartered Surveyor is to describe the variety of surveys on which their expertise is considered vital. As you will be able to see, their knowledge can be requested by a number of different parties, depending on the situation.
The following four categories will typically occupy the majority of the surveyor’s working week.
These are carried out on behalf of a bank or other mortgage lender. These surveys, though paid for by the borrower, are really for the benefit of the lender, since they are undertaken to ensure that the lender’s money is safe. A mortgage survey in Spain, unless it is carried out on behalf of a UK or Gibraltarian bank, has to be carried out by a tasador acting on behalf of one of the Sociedades de Tasación approved by the Bank of Spain. These companies have to place a substantial ‘bond’ with the Central Bank, which would appear to be a kind of indemnity fund where lenders can be compensated in case of gross error by the tasadores. This central control can lead to the Sociedades being used to influence the market, such as the recent example where they appeared to have received instructions to undervalue in an attempt to reduce mortgage lending and slow the rise in values. So their valuations deliberately may not accurately reflect the price that the property could command on the market.
The tasadores also seem to offer more of a ‘box ticking’ exercise than the more subjective building survey carried out by a Chartered Surveyor. However, I have to say that I am impressed by their reports as far as they go. We at Survey Spain undertake projects in conjunction with tasadores where we incorporate their report within our own, thus satisfying the requirements of the Spanish law, whilst our explanation of the tasadores report and our comprehensive defects report is of more direct use to the buyer.
These are the most useful kind of survey for house buyers, since the surveyor looks at the property through the eyes of the purchaser and reports on any defect that might not have a major influence on the mortgage value, but undoubtedly could affect the buyer’s equity and quality of enjoyment of the house.
These are only really carried out to investigate the cause of a problem and can involve, for example, breaking into the structure or foundations to test the soundness of their construction.
These are often combined with a building survey. A market valuation of anything is described as much more an art than a science. There is no secret magic formula handed down from generation to generation in some arcane masonic ceremony. It’s more a matter of gathering as much evidence, knowledge and information as possible on what is happening in an area and its economy, and the influences on people and places.
This process is extremely difficult in Spain because of the complications involved in finding reliable comparative evidence of what price properties have actually sold at – the full money paid. So many envelopes used to pass around the notary’s table, that now – with the introduction of strict money laundering rules – take place at meetings in the neighbouring bar! Sometimes even the escritura descriptions can be a work of art, with the measurements and accommodation not fully describing what is actually on the land. One can create appraisals, work out all the details of a property and apply equations and statistics, but ultimately the valuer has to look at the result on his computer screen and ask himself, “Is that a realistic value?” That is why it is always recorded as an Opinion of Value. Nobody can say exactly down to the last centimo what anyone will pay for a property after negotiation.
The tasadores have to apply formulae to the statistics of a property, its neighbourhood and location and adhere to the results: whatever result emerges from the machine is the stated value. They are bound to do so by detailed laws and regulations, which, whilst ensuring standardisation (as all properties are treated in the same way), remove the subjective element, the ‘art’, and, as surveyors have found to their frustration, can result in figures far from market reality.
If you have any questions regarding surveys in Spain please feel free to call Campbell D. Ferguson, FRICS. His company, Survey Spain Network, arranges valuations and surveys by RICS chartered surveyors anywhere in mainland Spain and the Balearic and Canary Islands, and Gibraltar. This includes valuations, building surveys, structural surveys, building inspections and investment and development appraisals.