This article is from the Australian Property Journal archive
ANZ’s data grab has huge repercussions for the commercial real estate market and property funds sector, by exposing confidential and commercial in confidence information to the bank which contravenes the International Valuation Standards Council (IVSC) standards, according to the Australian Property Institute.
The nation’s peak valuation body, the Australian Property Institute’s CEO Mike Zissler warned that ANZ’s data grab goes beyond the residential real estate and will also affect the commercial property market and the parties involved including landlords, tenants, private and institutional investors.
The data grab will force valuers to handover confidential information to ANZ, giving the bank access to information such as vendors and purchasers, lessor and lessee, leasing agreements, rental and incentives, just to name a few.
Such information is currently subject to confidentiality and are commercial in confidence.
“It is a lot more complicated in the commercial property market, valuers rely on this confidential data such as leasing arrangements, the space leased, rents, incentives to make a valuation determination.
“The parties provide this information to valuers with the understanding that it is kept confidential,” he added.
“ANZ is demanding valuers freely give up this commercial in confidence information,” Zissler continued. “It will expose the parties involved in commercial transactions to ANZ, which contravenes the IVSC standards,”
“And the valuer will no longer own that data while ANZ is free to use the information for its own purposes,” he added.
ANZ recently acquired Realas, an algorithm company which predicts property values from the data that is fed into its system.
Zissler said ANZ is also using standover tactics and misinformation about other parties into signing agreements.
“They are being told that other professionals have signed and they are the only one that has not signed.
“And that if they don’t sign, they will no longer be able to be a part of their valuation board,” Zissler said.
A senior valuation professional, who did not wish to be named for fear of repercussions, has exposed the behind the scenes tactics used by the bank.
Contrary to the ANZ’s assertions that the valuers are holding out for higher fees, the valuer said no firm has requested for more money.
They said it is about compliance with IVSC standards and the handover of information, which market participants such as landlords provide to valuers for the purposes of a valuation, with an understanding that it would not be disclosed to other parties.
“The firms are actively wanting to sign if some small changes were made to avoid ANZ owning confidential information – no firm is holding out for a better deal – just compliance with IVSC standards. Price and commercial are not being requested to change.
“The central matter is ANZ’s desire to “own” confidential commercial market data from unrelated parties – purchasers, vendors, lessor and lessee’s of commercial property – and this breaks the IVSC valuation standards on confidentiality.
“Agents and property participants would be very surprised to hear that a bank might own details of transactions they thought were confidentially given to valuers,” the valuer pointed out.
The data grab could also expose valuers to legal action.
A senior lawyer told Australian Property Journal that it would be “a field day”, exposing valuers to be sued by clients for breaching privacy and disclosing commercial in confidence information.
The senior valuer said, “ANZ is the only bank in the market that demands to “own” the valuation report. The market standard is a right to use internally model which is reflected in the API proposal – refused by ANZ.
“ANZ are forcing firms to sign an agreement that, based on expert legal advice obtained from API and other separate legal opinion, breaches the IVSC ethical standards on confidentiality,”
“ANZ have advised us on multiple occasions we are the “only ones” not to have signed their revised agreement on this matter of confidentiality of commercial property market information – and this was never true.
“This changed to “one of a small number of firms” – we understand four or five firms have refused to sign the agreement which has been the case for some time. 4 of 8 or 10 is still 40% to 50% that are refusing to sign so far as we know.
“The ultimatum is now sign or we won’t deal with you – despite the advice from the API that the ANZ Intellectual Property clause contravenes IVSC standards,” the senior valuer said.
The valuer said ANZ will be able to freely use the data for the bank’s owns commercial purposes.
“Expert advice obtained by the API states that the agreement grants ANZ unlimited ownership of – and with unlimited rights to reproduce and sell – commercial market data – sales and rental evidence – in valuation firms’ commercial valuation reports. These transaction details are not in the public domain and the data is sourced from third parties unrelated to ANZ on a confidential basis.
“ANZ seems to refute that it is the API and IVSC that makes decisions on compliance with valuation standards, not the ANZ.
“That data has been obtained by firms from third parties without any consent to pass ownership to any party for subsequent publication or re use. The firms do not ‘own’ the data to give to ANZ and ANZ is aware of this,” the valuer said.
Australian Property Journal contacted ANZ for comment, however the bank declined.
Australian Property Journal
