Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (96/2019)
To all banks operating in Palestine
Date: Sunday, April 21, 2019

Subject: Unified Valuation Model

With reference to the above subject, please find attached the Unified Valuation Model for real estate appraisals. Accordingly, please take the necessary measures to adopt the attached model when conducting real estate appraisal operations by licensed appraisers.

Supervision and Inspection Department
Palestine Monetary Authority

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www.pma.ps

Ramallah and Al-Bireh Governorate - Palestine P.O. Box 452 info@pma.ps | Fax: +970 2 2415310 | Fax: +970 2 2415251 | Phone:
Gaza - Palestine P.O. Box 4026
Fax: +970 8 2844487 | Fax: +970 8 2825713 | Phone:

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Part One: General Information

Real Estate Appraiser Information

• Name:
• License Number:
• Phone Number:
• Fax Number:

Other Information

• Appraisal Requestor Name:
• Property Owner Name:
• Borrower(s):
• Property Inspection Date:
• Report Date:

Part Two: Legal Description of the Property

• City / Village:
• Basin Name and Number:
• Area:
• Shares:
  • Yes □
  • No □
• Plot Number:
• Land Type:
  • Private Ownership □
  • Waqf □
  • Other... □
• Property within zoning boundaries:
• Title Deed Type:
  • Tabu (Title Deed) □
  • Renewed Registration □
  • Periodic Power of Attorney □
  • Other □
• Property Zone (according to Oslo Accords):
  • A □
  • B □
  • C □
• Property Use:
  • Residential □
  • Commercial □
  • Industrial □
  • Agricultural □
  • Other □
• Classification according to zoning plan:
  • Residential A □
  • Residential B □
  • Residential C □
  • Residential D □
• Property is divisible/severable:
  • Yes □
  • No □
• Expected future expropriations on the property and possibility of compensation (if any):
• Construction and demolition conditions (with clarification):
• Existence of building permit:
  • Yes □
  • No □
• Description of the permit:
• Land subject to leveling/grading works:
  • Yes □
  • No □
  • Leveling works in progress □
• Existing disputes regarding the property:
  • Yes □
  • No □
• Property occupation and usage:
  • Vacant □
  • Occupied by owner □
  • Leased without contract □
  • Leased with contract □
• Property alienability/tradability:
  • Yes □
  • No □
  • Reason if answer is (No):
• Eligibility for acceptance as collateral against debt:
  • Yes □
  • No □
• Desirability of the property in case of public auction sale:
  • Yes □
  • No □
• Other notes:

Part Three: Technical Description of the Property

1- Property Description

• Detailed Address:
• Property Type:
  • Detached House □
  • Apartment in a building □
  • Vacant land plot □
  • Building □
  • Other (specify) ..............

Land Specifications - Land map must be attached and the following explained:

• Degree of land usability/benefit:
• Shape and dimensions:
• Layout lines for structuring project:
• Topography of the land:

Surrounding roads and land fronts:

Nearby vital facilities (required to mention any nearby establishments that may affect its value positively or negatively):

Available infrastructure services for the site:

• Paved road □
• Unpaved road □
• Dirt road □
• Electricity □
• Water □
• Telephone □
• Public transport □
• Sewage □
• Other □

Proximity to city center:

• Yes □
• No □
• Estimated distance between property and city center: ...........

Property uses in surrounding areas:

Distance of property from street (mention street width):

Other information:

2- Existing structures on the property (Building)

• Number of floors:
• Number of apartments:
• Number of units per floor:
• Number of buildings:
• Are apartments divisible/severable:
• Construction type:
  • Stone □
  • Brick □
  • Reinforced Concrete □
  • Other □
• Construction date (age):
• Apartment No. (....) additional rows can be added as needed:
  • Area:
  • Apartment location at the beginning:
  • Unit's share of land: m².........

Interior design description:

Interior finishes description (plaster, paint, tiles, windows, doors, bathrooms, kitchens, electrical and plumbing installations, etc.):

3- Common Services

• General description:
  • Elevator □
  • Central gas □
• Parking description:
• Additional storage areas description:
• Building name:
• Description of other available services:

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Part Four: Estimating Property Value using one of the three methodologies (1- Sales Comparison, 2- Cost, or 3- Income)

The appraiser must clarify the value opinion and its justifications, in addition to the property's disadvantages and advantages in detail, supporting and justifying any price differences for the property.

How the appraiser arrived at these justifications and results:

First: Sales Comparison Approach:
This approach relies on obtaining accurate information on properties similar to the subject property in the same location or as close as possible. To ensure an accurate valuation, the appraiser performs correction or adjustment processes for differences between comparable properties and the target property, as no two properties are exactly identical. Differences between the subject property and similar properties are identified to determine the degree of similarity. The appraiser then assigns monetary values to these differences and adjusts the property price accordingly. Property price according to the Sales Comparison Approach.

Result:

Total Property Area	Price per Square Meter	Property Value (specify currency)

Second: Cost Approach:
The Cost Approach requires itemizing the construction and improvement costs per square meter for the property, depending on the type of finishes and improvements. Then, the depreciation amount is deducted from the total cost, which may result from normal wear and tear from regular use, changes in community needs, or external factors such as adverse changes in area usage. Finally, the land value is added to the construction cost after deducting depreciation.

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Developer profits must be included in the price per square meter.

Item	Area in Square Meters	Price per Square Meter	Total Price in USD
Ground Floor
First Floor
Second Floor
Garage
Storage Area
Water Well
Landscaping, fencing, road filling... etc.
Apartment No. ( )
Total Value using Cost Approach			USD

Notes:

(1) Land Value + Depreciation - Building Value = ........ (Currency)

(2) The bank has the right to request any additional information it deems appropriate.

Third: Income Approach

• This approach is used when appraising income-generating/producing properties:
• The following formula can be referenced when applying this approach:
  Property Value = Net Annual Income / Capitalization Rate

Note:

The capitalization rate is obtained from the market for similar properties.

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Part Seven: Limitations of the Appraisal Report

1. All entities relying on this report must accept the report's limitations in addition to all its contents.
2. These limitations are an integral part of the appraisal report and constitute a reference to all documents, definitions, descriptions, facts, and analysis. Furthermore, the purpose of this report is to provide an opinion on the property's value, and the purpose of providing an opinion on the property's value is solely for the use of the intended user(s) specified in the report or other specifically designated users.
3. The appraiser's responsibility lies solely with the appraisal requestor. There is no responsibility or obligation to any third party, except for the appraiser's responsibility to the Palestine Capital Market Authority regarding the application of the provisions of Instruction No. (3) of 2012 concerning the licensing of real estate appraisers.
4. Other parties may review the appraisal report but cannot rely on its contents as if the report were issued to them. The appraisal report was prepared to assist the lender in making a decision regarding granting a loan to a specific client. The appraisal requestor is not considered the appraiser's client, even if they directly or indirectly pay the appraisal fees. The requestor may obtain a copy of the report, but reliance on the report requires the lender to obtain the appraisal report directly from the appraiser.
5. The appraisal report must not be circulated among real estate appraisers during the performance of appraisal/re-appraisal duties.
6. Real estate appraisers have the right to request from the parties to the property financing contract any data or documents they deem necessary for the appraisal process.
7. The property inspection date is considered the time period to which the appraised value specified in the report applies. The appraiser must obtain information within the framework of performing a specific property appraisal from reliable sources and must disclose these sources.
8. This report is not considered a technical, legal, architectural, or survey study of any kind. Furthermore, the appraiser's role does not include inspecting structural integrity and load-bearing capacity or the property's ability to withstand conditions such as floods, earthquakes, or the presence of toxic materials. The appraiser is responsible for appraising what is visible during the property visit and is not tasked with inspecting electrical, heating, cooling, internal piping, sewerage, or other hidden systems. The appraiser is in no way responsible for any costs arising from the discovery or correction of any defects in the property. If the appraisal requestor wishes to obtain any such study, they may request it from the appraiser if they possess the expertise as additional tasks, or from any other expert appointed by the requestor.
9. The appraisal opinion pertains to the real property itself and does not include movable assets located on the property that are not part of the real estate. However, interior modifications to the property, such as decorations, must be taken into consideration when studying and analyzing the subject property, and value adjustments must be made according to the approved appraisal methodology.

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Declaration / Acknowledgment

Based on the engagement letter No. ........ dated ........ for the appraisal of the property (Plot and Basin and Governorate) regarding the financing request of Mr./ I have carried out the necessary procedures to arrive at an accurate value for the property, and I also conducted the physical inspection and assessment of the property's condition, details of which are stated above, which took place on ........... corresponding to ........... I also reviewed the documents and records and official maps, copies of which are attached at the end of the report. I have based the property appraisal on technical analysis, relying on my expertise, knowledge, and professional conclusions, using one or more of the appraisal methodologies, and I hereby certify, acknowledge, and undertake the following:

• The accuracy of the facts contained in the report, which includes the analysis and study I conducted, and that the study and analysis are free from any bias toward any specific party, and that the appraisal opinion and results are entirely professional and neutral.
• That I have no personal interest in the subject property of this appraisal, nor do I have any personal interests linking me to parties concerned with the property up to the second degree of kinship, and that this report does not favor any party related to the subject property.
• That the report does not contain pre-determined results subsequently stated in the report. Furthermore, the reasons I present are not based on pre-determined results or values.
• That this report was prepared in accordance with the instructions issued by the Palestine Capital Market Authority.
• That based on the information contained in this report, and on my expertise, knowledge, and analysis, the value stated in the report is the appropriate value for the property.
• The appraisal date is as stated in this report.
• Not to consult with other real estate appraisers assigned to appraise the same property, in order to ensure providing the lender with an independent report without prior agreement or coordination.
• Not to subcontract the appraisal task to any other party, and that I personally conducted the appraisal based on my expertise and the license granted to me by the Palestine Capital Market Authority.

Appraiser Name:
Address:
License Number:
Signature:

Part Eight: Attachments

• Copy of engagement letter □
• Site plan and land map □
• Title registration document □
• Internal and external photos of the property □
• Engineering unit plan (if available) □

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