By NEIL HARTNELL
Tribune Business Editor
The Bahamas Real Estate Association’s (BREA) president was yesterday “on pins and needles” over sought-after Government responses that will determine the next move over the controversial appraisal system being pushed by two Canadian-owned banks.
Carla Sweeting told Tribune Business that answers from Khaalis Rolle, minister of state for investments, to BREA’s questions would place the industry “in a better position to make amendments to the agreement or there won’t be one”.
Mr Rolle promised to deliver the answers, expected this week, at a meeting last Thursday that featured BREA representatives, together with officials from Royal Bank of Canada (RBC) and Scotiabank.
It had been called to tackle the rift between the two banks and the Bahamian real estate community over the former’s plans to foist a new appraisal system, managed by Canadian company, NAS Valuations, on the sector.
Ms Sweeting yesterday said consultations with BREA’s attorneys, Callender’s & Co, had raised concerns “pertaining to the licence and permits the Government has given them [NAS] to come in and operate” in the Bahamas.
NAS is licensed in the Bahamas as a financial software provider, not an appraisal management services operator, which is effectively what it would be doing for RBC and Scotiabank.
And Ms Sweeting told Tribune Business that its role, and involvement, appeared to “violate” the Real Estate Act, which requires that all persons practicing in the industry be either Bahamians or permanent residents with the right to work.
She also confirmed information reaching Tribune Business from other sources, namely that questions were being raised over whether NAS has a valid Business Licence.
This newspaper was told that all Business Licence applications have to go through the Town Planning Committee, but there was no record of NAS’s having done so. BREA is well-placed to confirm this, as Wilshire Bethel, an appraiser and one of its members, is Town Planning Committee chair.
BREA, having received no response to written inquiries submitted earlier this year to the Prime Minister, Mr Rolle, the Attorney General, and Ryan Pinder, minister of financial services, plus the financial services regulators, met with the minister of state for investments last Thursday.
Also present were executives from both Canadian-owned banks, plus their attorneys and credit risk officials.
Likening the meeting to “a mediation session”, Ms Sweeting said she had “argued, begged and pleaded” to meet privately with Mr Rolle, but he rejected this in favour of hearing both sides present their cases.
Suggesting that the Minister now had “a much better understanding” of both parties’ issues and concerns, the BREA president told Tribune Business: “I wish that before the Government had given the permits to do this, they had come to BREA and got a better understanding.
“That’s my only regret. I wish the Government had sought our advice on it, seeing as it was going to affect Bahamian realtors, before issuing the licence. Now that they are aware of the ramifications of this, they have a better understanding.”
BREA and its members have rejected two previous versions of the appraisal management contract that the two banks, and NAS, wanted them to sign up to.
Realtors had four main concerns, only one of which appears to have been addressed to-date, which was the attempt to have them assume 100 per cent legal (and cost) liability should any appraisal result in court action.
Apart from intellectual property rights/ownership of an appraiser’s report, the other outstanding concerns involved the banks’ and NAS’s ability to “dictate” the appraiser’s fee and who is selected to carry out the valuation. They plan on placing Bahamian appraisers on a rotation system.
“It’s so many levels,” Ms Sweeting told Tribune Business. “If you put this agreement in a boat and push it out to sea, the boat will topple over as it’s so one-sided.”
She added that the experience of appraisers would be “thrown out of the window”, while acknowledging the banks’ desire to “clean up their foreclosure numbers” and obtain better appraisals.
Expressing a desire for compromise and a solution that meets the needs of all parties, Ms Sweeting told Tribune Business: “I don’t expect all our wishes will come true, but let’s find a happy line all can live with.
“I said this to Nathaniel Beneby [Royal Bank’s Bahamas country head]. I look at realtors and banks like a marriage.
“We bring you business, and you lend money to help our clients achieve their goals and dreams. We feel like you’ve found a sweetheart. We’ve got to find a way to make this work. He agreed.”
Tribune Business sources yesterday alleged that Royal Bank had informed its staff that the NAS-based appraisal system was due to start on July 21, but this could not be confirmed.
Ms Sweeting acknowledged that this was “a rumour on the street”, and said the Bahamian subsidiaries appeared to be under tremendous pressure from their head offices in Toronto to implement the NAS appraisal system.
“My sources in the banks say there’s quite a bit of concern with this new system,” she added.