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. |
In Romania, the valuation of real estate for lending purposes is regulated by national law and by the Central Bank’s regulations. These regulations apply for all types of real estate (land, residential, commercial properties, etc.). The laws that regulate the valuation profession are: Law no. 99/2013; Law no. 149/2013 and Law no. 221/2013. |
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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? | Not applicable. |
| c) Do national valuation standards exist? Is there any cross-reference to European and/or International Valuation Standards (EVS/IVS)? | In Romania, valuation need to comply with ANEVAR valuation standards which incorporate the International Valuation Standards. In addition to IVS there are several local valuation standards which have been prepared in accordance with local legislation and practices – the most notable one being GEV 520 – valuation standard for loan security. |
| 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. | The regulator in Romania has stated that valuations for loan security must be performed by individuals which have the qualification, abilities and experience required for performing a valuation. In addition to this, the valuation used by bank need to be compliant with IVS and ANEVAR Standards. |
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). | In Romania, the valuation basis is represented by Market Value, as stated in the ANEVAR Standards. |
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| b) Based on what definition? Please provide the definition and reference to where it can be located. | The definition of the Market Value is stated in the ANEVAR Standards and is the same as the definition in the International Valuation Standards. |
| 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. | For lending purposes, only the Market Value is used. |
| 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? | The main approaches used for lending purposes are the Market Approach and Income Approach. The Cost approach is mainly used as a secondary approach. |
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. | The legal and professional framework in Romania specifies the minimum requirements for the content of the valuation reports. These requirements are in line with the IVS requirements (IVS 106). |
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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. | There is no differentiation between the types of properties. All valuation reports must comply with IVS 106 for all real estate. |
| 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. | Not applicable. |
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. | The ANEVAR valuation standards have specific rules for AVMs and they state that these tools can be used only for properties which have a large enough population that can safely provide accurate results. These tools are mainly used for residential properties and for agricultural lands. |
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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. |
Digital tools are mainly used for monitoring and reviews of property values, mainly used for residential properties and for agricultural lands. |
| 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? | Currently, the main purpose of digitalisation is data collection regarding property details. This data is also being used for the creation of AVMs / other statistical tools. |
| 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.? | The reliability of the tools is going through a quality review, mainly by checking the input data and also the output supplied by the tools. This output is also verified and back-tested by a qualified valuer. |
| 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. |
We can safely state that we foresee an increase in the level of digitalisation and the use of Ais in the valuation field, mainly for monitoring purposes (in the near future with the possibility to extend the usage outside just monitoring) and it is heavily dependant on the access to databases with accurate and relevant information. The benefit for increasing the use of Ais in the valuation process is the reduction in processing times for the loan origination process. |
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? | The ESG factors and climate risks which influence the market value of a property are being accounted for in the Market Value supplied by the valuers. |
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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? | These aspects are part of the risk assessment departments of the banks and is related to the overall appraisal of the client and the company activity and not just the collaterals. |
| 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? | The Banks must monitor these risks, and the existence of these tools are very useful in this activity. |
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. |
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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)? | The property valuation is a regulated profession by national law. |
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| b) Is the use of the title of valuer protected in your Member State? If yes, by whom? | The use of the title of valuer is protected by national law and all valuers that are allowed to perform valuation reports for lending purposes must be authorised by ANEVAR. |
| 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. | Not applicable. |
| 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. | The regulatory and professional framework is the same for all valuers, irrespective of the type of real estate. |
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. |
In Romania, the national regulator stated that valuations used by a bank must comply with IVS and ANEVAR Standards. In accordance with national laws, only valuers authorised by ANEVAR are allowed to perform valuations for lending purposes. Through these two aspects, a qualified valuer is a valuer authorised by ANEVAR. |
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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? |
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| 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 regulator stated that the valuation for lending purposes must be independent (the statement is without the sufficient part, which means the valuer must be fully independent) from the loan decision process. |
| 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? |
The legal framework states that valuations must be performed by ANEVAR authorised valuers. Credit institutions are allowed to use both internal and external valuers. The vast majority of the valuation reports used by the banks are performed by external valuers. |
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| b) If there is/are no legislation/rules regarding the use of external and internal valuers, what is typical practice? | Not applicable. |
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? |
The legal framework specific to the valuation of properties state that valuers must have a valid professional indemnity insurance cover. This is also a requirement as to maintain the status as an authorised valuer and thus, lenders only use valuers which are covered by professional indemnity insurance. |
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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. |
As per current legislation, valuers are liable for any damages caused by valuation reports which are not performed in compliance with ANEVAR Standards. |
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 |
The property value is determined by the credit institution. Each bank is allowed to estimate it using different methodologies – adjustments determined by the bank using internal data or information supplied by extern providers. |
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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"? |
The national regulator requires that all banks must increase the frequency of property monitoring in the event of a significant change in market conditions. |
| 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? |
The national regulator has set up the criteria regarding “advanced statistical or other mathematical methods” as the ones in Article 208(3a) CRR. |
| 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. |
There are several AVMs and hybrid methods used in the monitoring processes, used only for properties which have a large enough population that can safely provide accurate results. |
| 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? |
The criteria which defined the review process of property valuations are the ones from the EBA Guidelines. |
| 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? |
The regulator has stated that in the event of a significant decline in general market prices, each bank must set a threshold which will trigger a more frequent monitoring of the collaterals. |
| 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? |
The reviews for residential properties and agricultural lands are performed mainly using digital tools (AVMs, hybrid methods, etc.). The Reviews for the rest of the collaterals are performed either by desk-top valuations either by a full report with inspection of the collaterals. |
| 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’. |
The guidelines that are being used by the banks are the ones from the CRR Directive. Currently there are no additional guidelines received from the national regulator. |
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? | |
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| b) What valuation bases apply for the valuation of cover assets (Market Value, Mortgage Lending 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? | |
| 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? | |
| 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)? | |
| 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? | |
| 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)? | |
| 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)? |
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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