I. THE VALUATION
I.1 Regulatory Framework
| a) Is there a legal framework in your Member State for the valuation of real estate for lending purposes (loan origination)? If yes: • Is this framework specifically for the valuation of real estate for lending purposes or are provisions enshrined in a broader piece of legislation? • Is it limited to the transposition of European or International Standards or is it broader in nature? • Please provide references and indicate whether it applies to both residential and commercial property. If there are differences between both property types, please explain. |
There is no specific “lex specialis” for valuation for lending purposes; general regulations and sectoral methodologies of banks are used. The fundamental legal anchor is Act No. 151/1997 Coll., on Property Valuation (which defines the “usual price” and methods) and related decrees; for banking practice, we rely on EVS/IVS and the Czech Banking Association Standard. Nevertheless, there are not universal, applicable and biding stadards of real estate valuation on level of legal framework. |
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| b) If there is no specific legal framework, is the valuation of real estate for lending purposes covered by other means, e.g. self-regulation, sector recommendations or supervisory guidance? |
Certification of Valuers: Real estate valuers must be certified by accredited certification authorities. These authorities ensure that valuers meet professional standards and qualifications. Regulated Trade: Real estate valuation is considered a regulated trade (“vázaná živnost”) under Czech law. To obtain the right to perform property valuations, a valuer must fulfill the requirements set by Act No. 455/1991 Coll., Trade and Business Licensing Act, (Živnostenský zákon). |
| c) Do national valuation standards exist? Is there any cross-reference to European and/or International Valuation Standards (EVS/IVS)? | In the banking sector, the Czech Banking Association (ČBA) Standard for the valuation of real estate is commonly used. This standard harmonizes procedures, requirements for independence, and the content of valuation reports. At the same time, it directly refers to the European Valuation Standards and the International Valuation Standards. |
| d) How has the regulator in your Member State transposed Article 19(1) of the MCD regarding “reliable standards” for the valuation of residential property (into legislation or delivered through a professional body)? Indicate whether and how “reliable standards” are defined and whether and how the content of those standards are prescribed. |
Czech Banking Association (ČBA) Standard for the valuation of real estate Fundamental legal anchor is Act No. 151/1997 Coll., on Property Valuation+ Act No. 254/2019 Coll.+ Act No. 257/2016 Coll., on Consumer Credit |
I.2 Valuation Bases & Methodology
| a) What valuation bases (Market Value, Mortgage Lending Value, etc.) are typically used in your Member State for the valuation of property for lending purposes (please disregard at this stage the specific requirements of Art. 229 CRR considering that the Property Value is not an independent basis of value). | Market Value |
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| b) Based on what definition? Please provide the definition and reference to where it can be located. | #VALUE! |
| c) In case other valuation bases are used in your Member State for the valuation of property for lending purposes, please specify the effect, if any, on the final valuation. | #VALUE! |
| d) Depending on the valuation base used, which valuation approaches or methods (comparison, income, cost, etc.) are typically applied in your Member State to value properties for lending purposes in each category? |
Approaches: comparison, cost - residential income, cost – commercial land valuation – residual methods based on comparison, income, cost Typical and preferable sub techniques: Direct comparison Income: direct capitalization (or term&revesion option), hospitality – DCF |
I.3 Valuation Report: Form & Content
| a) Does the legal or professional framework in your Member State specific to the valuation of properties provide minimum requirements in terms of the form and content of the valuation report? If yes, please indicate what these minimum requirements are. |
Minimum requirements in practice are set by the Czech Banking Association (ČBA) Standard (purpose, definition of the value basis, description of the property and the market, data/methods used, site inspection, valuation date, risk identification, appendices). The only legal framework is design pro specific Court Expert valuation reports bas on sub-legal Decree Nr. č. 503/2020 Sb.§ 39-51. These points are very specific and usable in banking environment only in limited extend. Outside of valuation for banking purposes: overall practice of real estate valuation reports in terms of content is indirectly inspired by IVSC/EVS/RICS standards are partly reflects. |
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| b) Should the form and content of valuation reports be prescribed, are there differences between residential and non-residential properties? Please describe as appropriate. |
For commercial assets, a more detailed market/income analysis is expected (lease agreements, CAPEX, VAC, LTA), while for residential properties, the emphasis is on comparable samples and the local market. (Practice according to ČBA/EVS.) AVM are used only for residential properties based on individual and internal guidelines of individual banking institutions. |
| c) If the form or content of the valuation report are not prescribed, what form does the valuation report typically take? Please specify differences between residential and commercial property valuation reports. | See above. The main difference is not about identifying of the subject of the valuation but about the income characteristic, providing broader market evidence, broad argumentation, providing clear calculation with transparent formulas, more detail appendixes. |
I.4 Technology & Valuation
| a) Does the legal or professional framework in your Member State provide specific rules/guidance on the use of digital valuation tools (AVMs, Artificial Intelligence etc.)? If yes, what does this consist of and is it restricted to a particular type of property? Please specify whether there is a correlation with the requirements of Article 208(3a) CRR and of section 7.4 of GLOAM or whether the latter provisions are of stand-alone application in your Member State. | There are no direct Czech “AVM regulations”; the Czech National Bank (CNB) and banks apply the EBA Guidelines on Loan Origination & Monitoring (LOM). These guidelines allow statistical/AVM methods for monitoring and identifying the need for revaluation; for initial valuation, the emphasis is on a qualified valuer and local inspection. CNB as regulator is not explicitly against using AVM but highlights prudential approach for using. AVM are not seen as solution but only as tool. |
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| b) For what purpose are digital tools and/or AI employed in your Member State? - Mortgage origination, monitoring and review of property values, revaluation etc. - Capital requirements, covered bond funding, securitisation transactions, mortgage portfolio risk management etc. |
Portfolio monitoring, ongoing revaluation, and risk flagging; less frequently for origination without inspection (typically only for low-risk, standardized residential real estate – manly in bigger cities) |
| c) Scope of digitisation: Please determine the scope of automated and digitised tools in your Member State. Are they confined to data collection, do they deliver reliable property values or are they even used to produce full or partial valuation reports including description of locations, infrastructure, building characteristics etc.? If the latter is the case, is internal data used or it is permitted to purchase data from an external data provider? | AVMs used in the Czech Republic provide full-fledged valuations based on comparisons with completed transactions. The source of these transactions is data from the Land Registry, complemented by comparisons with currently listed properties. |
| d) Quality requirements: How are the reliability of the tools and their outputs assessed, e.g. by controlling the inputs, back-testing, supervision and/or plausibility checks by valuers etc.? | Model risk management (input control, backtesting, independent validation), plausibility checks by a valuer; banks have internal guidelines. |
| e) Do you foresee an increase in the use of automation and digitisation of property valuation processes in the future? Please describe potential technological developments which could impact the valuation profession and accelerate its transformation, notably through the use of AI. | In my opinion, there is great potential in the use of AI for property valuation, and I see significant opportunities especially in the valuation of commercial real estate. However, at present, it remains an auxiliary tool that “for now” cannot replace a valuer. For example, AI has not yet conducted an inspection or measured properties itself |
I.5 ESG, climate risk, transformation risk
| a) How are ESG factors and climate risk taken into consideration in the valuation process? Do Market Values and/or Mortgage Lending Values reflect the ESG characteristics of properties? | Energy performance (EPC/PENB according to Act No. 406/2000 Coll.) and the costs of achieving standards (renovation) are reflected in income, CAPEX, and market demand, which in turn affect MV. |
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| b) Are there rules in your Member State requiring assessment of EU Taxonomy alignment of a property in the valuation report and the subsequent impact of compliance/non-compliance on property values? | Property valuations typically include an ESG assessment or an Energy Performance Certificate (EPC/PENB). Some banks automatically integrate this data into their internal valuation tools. |
| c) Are digitised tools and AI applied in order to capture and/or measure the impact of ESG factors and climate risk on property values? | Usually the bank conducts this assessment internally. Based on the results, it determines the interest rate. |
I.6 Market Initiatives
| a) Please describe any market initiatives which have been undertaken in your Member State (including cross border initiatives) and which have promoted market best practices and/or transparency of valuation practices. |
• ČBA PSOM - Czech Banking Association – Working Group for Real Estate Valuation - Harmonization of bank valuation requirements. • RICS Czech Republic • Academic/professional body activities: o ČKOM (Czech Chamber of Property Valuers) o EXFOS (Expert Forensic Science) o KSZ ČR - Chamber of Court Experts of the Czech Republic o AZO – Association of Experts and Valuers of the Czech Republic |
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II. THE VALUER
II.1 Regulatory Framework
| a) Is property valuation a regulated profession in your Member State (through legal, regulatory or statutory rules)? | Yes with relevant education – after 3y experience this person could reach certification exam, and its is required to recertificate after each 5 years. Continual education is required to keep this certification (25 hours minimum per annum) |
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| b) Is the use of the title of valuer protected in your Member State? If yes, by whom? | NO. Only individual insurance is possible. |
| c) If the title of valuer is not protected in your Member State, how do lenders ensure that they work with ‘qualified’ valuers? Are there ‘professional’ certifications for property valuers in your Member State? If yes, please name them. | All lenders based on Czech Banking Association keeping white list cooperating partners (circa more than 1200 in the Czech Republic) – these individuals/companies should be at least certified, often with insurance, educated by lenders on regular basis. There is also black list with valuers which did not follow standards in the past. |
| d) Is the regulatory or professional framework the same for all valuers, whether they value residential and/or commercial property? Or are there differences? Please describe as appropriate. | In terms of sector residential or commercial there are not specific professional framework. |
II.2 Qualification and Independence
| a) The qualified valuer • How has the regulator in your Member State transposed the requirements of Article 19(2) of the MCD, of Articles 229(1) and 208(3b) of the CRR regarding the instruction of “professionally competent valuers” or valuers who possess the “necessary qualifications, ability and experience” (transposition through legislation or by self-regulation)? Indicate how professional competence and qualification requirements are prescribed. |
The title “Expert” is regulated by Act No. 254/2019 Coll. (on Experts, Expert Offices, and Expert Institutes). The title “Valuer” (outside of expert activities) is not a protected designation; therefore, banks require relevant qualifications/certification and practical experience. |
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| a) The qualified valuer • If professional competence, qualification, ability and experience requirements are not prescribed, what is general practice with regard to professional qualifications? |
Banks require practical experience, education, and certification according to ISO/IEC 17024. International designations (such as RICS or REV by TEGoVA) are also common. The ČBA Standard specifies requirements and the selection process for valuers. |
| b) The independent valuer • How has the regulator in your Member State transposed the provision in Article 19(2) of the MCD or in Articles 229(1) and 208(3)(b) of the CRR regarding “sufficient independence from the credit underwriting process” or “independence from the loan processing and loan decision process” (through legislation or delivered through self-regulation)? Indicate whether and how the requirement is defined and whether and how it is prescribed. |
The requirement for independence from the credit process is derived from Article 19(2) of the Mortgage Credit Directive (MCD) and CRR 208/229, and is operationalized in the EBA Guidelines on Loan Origination & Monitoring (LOM). Banks have internal independence barriers and conflict of interest rules. |
| b) The independent valuer • If “sufficient independence” is not prescribed, what is general practice to ensure the valuer is unbiased and not subject to undue pressure? |
II.3 External vs. Internal
| a) Does the legal or professional framework in your Member State specific to the valuation of property for lending purposes lay down rules for banks and lenders as to whom they may use to value properties? • If yes, do credit institutions have the possibility to employ both internal and external valuers? • Is one type of valuer typically employed more frequently than the other? |
General law does not restrict this; |
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| b) If there is/are no legislation/rules regarding the use of external and internal valuers, what is typical practice? | In practice, Czech banks commonly use both external and internal valuers. The choice depends on internal capacities and the bank’s internal policies. |
II.4 Professional Indemnity Insurance
| a) Does the legal or professional framework in your Member State specific to the valuation of property for lending purposes require: • Valuers to have professional indemnity insurance cover? • Lenders to use only valuers covered by professional indemnity insurance? |
There is no general statutory obligation for valuers to hold professional indemnity insurance; however, banks require it contractually. The ČBA Standard regulates liability towards the bank (under § 2950 of the Civil Code) and sets qualification criteria for the selection of cooperating valuers. |
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| b) If there are no such requirements, how are lenders/valuers covered for the risk? • Is/are there legislation/rules in your Member State determining the responsibility of the valuer vis-à-vis his client? If yes, please describe the legislation/rules and the responsibility of the valuer. |
III. VALUATION & CAPITAL REQUIREMENT
| a) Property Value How are the Property Value requirements of Article 229(1) CRR transposed in your Member State: • by calculating the Mortgage Lending Value • by Market Value adjustments ◦ adjustments determined by the valuer on a single property by property basis ◦ adjustments determined by the credit institution on a portfolio level based on internal historic market data series ◦ adjustments determined by the credit institution on a portfolio level based on data provided by external research institutes or data providers |
by Market Value adjustments |
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| b) Monitoring of property values Has the regulator in your Member State laid down criteria regarding "more frequent monitoring where the market is subject to significant changes in conditions"? |
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| b) Monitoring of property values Has the regulator in your Member State laid down criteria regarding “advanced statistical or other mathematical methods” complying with the technical requirements of Article 208(3a) CRR? |
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| b) Monitoring of property values Please provide an overview of the different statistical methods/tools complying with Article 208(3a) CRR applied by lenders in practice. |
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| c) Review of property values and revaluation • Has the regulator in your Member State laid down criteria which define “review” of the property valuation? If so, what are the minimum and maximum periods within which a review must be conducted? Based on which criteria? |
Generally, these criteria are not explicitly defined; banks have adopted the criteria from the CRR regulation and implemented their own internal rules. At least annually for commercial properties and once every three years for residential properties; more frequently in the event of significant market changes. Statistical/AVM methods may be used for monitoring; large exposures (over EUR 3 million or 5% of own funds) require regular reviews by an expert |
| c) Review of property values and revaluation • Has the regulator in your Member State laid down criteria which define “material decline relative to general market prices”? How are ESG-related considerations assessed as an indicator for a material decline? |
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| c) Review of property values and revaluation • Please provide a description of how ‘reviews’ are carried out in your Member State, e.g. by a new full-size valuation report, a desk-top valuation, a valuation certificate, a plausibility assessment or alike. What criteria are used to determine how the reviews are to be carried out? |
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| c) Review of property values and revaluation • For the calculation of average values in accordance with Article 229 (1)(e) CRR in the context of upward revisions of values, are there any guidelines from regulators or lenders addressing the data points to be used and the comparability of properties? Please indicate whether there are requirements from regulators or lenders for ‘sufficient data’ and ‘unequivocal increases of value’. |
IV. VALUATION OF THE COVER POOL
| a) Are valuation rules for cover assets provided at national level in accordance with Article 6(5a) CBD? Are they provided by national covered bond legislation or by professional guidance/standards? | The rules are based on Act No. 190/2004 Coll., on Bonds (following the implementation of the EU Covered Bond Directive). |
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| b) What valuation bases apply for the valuation of cover assets (Market Value, Mortgage Lending Value)? | Market Value |
| c) In the case of Market Value valuations, are there any prudential or longer term/sustainable features of the property to be considered? If yes, to what extend? | The value is generally more than conservative than MV of the property |
| d) How is the requirement that the valuation shall be carried out by a valuer who possesses the necessary qualifications, ability and experience transposed in your Member State (Article 6(5b) CBD)? Are there specific qualification requirements for valuers? | Act No. 257/2016 Coll., on Consumer Credit |
| e) How is the requirement that the valuer shall be independent from the credit decision process transposed in your Member State (Article 6(5c) CBD)? | Act No. 257/2016 Coll., on Consumer Credit |
| f) Are there differences in valuation rules and/or qualification requirements with regard to the property type (residential vs. commercial properties) or to the loan amount? | There are differing requirements for valuers. Banks typically keep internal panels (approved lists) of valuers by property category. Residential properties may be valued by less experienced/junior valuers, usually under appropriate supervision. Commercial valuations are allocated to valuers in tiers based on the expected property value—commonly an SME tier up to CZK 100 million, and higher tiers such as Large Corporate or Commercial Real Estate. |
| g) Are there specific monitoring, review and revaluation requirements for cover pool assets at national level (see Article 129(3) CRR referring to Article 208 CRR)? | Banks has implemented own internal rules. Generally at least annually for commercial properties and once every three years for residential properties; more frequently in the event of significant market changes. |
| h) Do regulators of your Member State provide a waiver from the limitation of calculating average values for cover assets in case of upward revision of values (Article 129(3) second subpar. CRR)? | The CNB issued a measure of a general nature (January 2025) allowing, under specified conditions, an exemption from the “averaging” limitation under Article 129(3) CRR for covered bonds |
V. OTHER
REGULATORY HARMONISATION AND NATIONAL DIVERGENCES
| 1. What challenges does your Member State face in harmonising with EU regulations (e.g. legal, technical, market-related)? |
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DATA QUALITY, TRANSPARENCY AND COMPARABILITY
| a) What data sources are typically used by valuers in your Member State, and to what extent do they comply with Article 208(3a) of the CRR? | |
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| b) What measures have been taken to improve transparency and comparability of valuation data within your Member State? | |
| c) Is there a central database or platform for sharing valuation data in your Member State? |
EDUCATION, TALENT PIPELINE AND PROFESSIONAL DEVELOPMENT
| a) What training programs or continuing education opportunities are available for property valuers in your Member State? | |
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| b) Is there collaboration between universities, professional bodies, and regulators to ensure a sustainable pipeline of qualified valuers? | |
| c) How does the EU regulatory environment influence the development and attractiveness of the valuation profession? |
FUTURE TECHNOLOGICAL AND REGULATORY DIRECTIONS
| 1. What technological developments are expected to impact valuation processes in your Member State over the next five years? |
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