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TURKISH APPRAISERS ASSOCIATION

RULES OF PROFESSIONAL CONDUCT

CHAPTER ONE

Purpose, Scope, Legal Basis and Definitions

Purpose

ARTICLE 1 - (1) The purpose of this regulation is to set forth the guidelines of professional conduct and code of ethics for Members of Turkish Appraisers’ Association to be observed in their businesses and other relations among themselves and with their clients.

Scope

ARTICLE 2 - (1) The Members of Turkish Appraisers’ Association conduct their appraisal activities in accordance with the real estate legislation applicable in Turkey, International Valuation Standards and the guidelines of professional and ethical conduct set forth in this present regulation.

Legal Basis

ARTICLE 3 - (1) This present regulation has been issued based on Subparagraph (b) Paragraph 1 Article 7 of Statue of Turkish Appraisers’ Association enacted by Decree of the Council of Ministers with number 2014/5933 issued on 05.02.2014 according to fourth Paragraph of Article 76 of Capital Markets Law dated 06.12.2012 with number 6362 and entered into effect as published on 02.04.2014 Official Journal number 28960.

Definitions

ARTICLE 4 - (1) The expressions referred to in this present regulation represent the following;

a) Association: represents Turkish Appraisers’ Association.

b) Law: Capital Markets Law 6362 dated 06.12.2012.

c) Board: Capital Markets Board.

d) Statue: Represents the Statue of Turkish Appraisers’ Association enacted by Decree of the Council of Ministers with number 2014/5933 issued on 05.02.2014 according to fourth Paragraph of Article 76 of Capital Markets Law dated 06.12.2012 with number 6362 and entered into effect as published on 02.04.2014 Official Journal number 28960.

e) Member: Represents natural person Residence Appraiser Members and Appraiser Members and legal person Appraisal Entity Members of Turkish Appraisers’ Association.

f) Appraisal Entity: Represents the appraisal entities authorized by the Board to conduct appraisal activities in capital markets,

g) Appraiser: Represent natural persons holding a real estate appraiser license issued under the framework of the related regulations of the Board,

h) Residence Appraiser: Represent individuals who hold a residence appraisal license under the regulations of the Board setting forth the provisions about licensing and are Members of Turkish Appraisers’ Association according to third Paragraph of Article 8.

i) Customer: Represents natural persons and legal persons contracting with Association members to obtain appraisal service,

CHAPTER TWO

Guidelines for General Principles

General Principles

ARTICLE 5 - (1) Members conduct their studies in accordance with legal and administrative regulations and with the general principles set forth below, in order to ensure diligent, equitable manners in good faith in their relations with customers, other members and their own employees, and to avoid unfair competition. Members should be aware of laws, by-laws, guidelines and other regulations issued by the state, state entities and institutions, regulatory authorities and professional organizations governing the activities of members, and observe the provisions of aforementioned legislations.

(2) Appraisal activities should be performed by qualified and independent Appraisers in good faith avoiding biases, explicitly formulating reports without leading to any misinterpretation and clarifying all essential aspects of appraisal conception.

The principle for good faith and equitable conduct

ARTICLE 6 - (1) In any case, Members have to act correctly in good faith and conduct their studies without harming their customers, the society, their profession and Appraisal Entities. In the relationships they establish and the studies they perform, they should act timely and thoroughly in accordance with rules of professional conduct, based on correct statements, and should attentively avoid any conduct that could betray confidence.

(2) Real estate appraisal companies and professional appraisers undersigning appraisal reports, residence appraisers and appraisers in charge are jointly and severally liable for damages suffered by their customers or by third persons making use of the related report, based on the results achieved in the report prepared, due to incompliance of the report with the standards set forth, failure of sufficient analysis, use of erroneous data and for similar reasons. Criminal liabilities of company shareholders, managers and employees are reserved.

Independence and objectivity

ARTICLE 7 - (1) When conducting appraisal studies, members do act independently and objectively and show due diligence to act continuously as such. Independence stands for the entirety of the manners and conceptions necessary for an objective professional conduct in good faith. Members cannot make any proposals or requests that might overshadow their and other Members’ independence and objectivity, and they cannot accept such proposals or requests in this regard.

Circumstances impairing independence

ARTICLE 8 – (1) In case of doubt, the independence of Appraisal Entity or Appraiser or Residence Appraiser is deemed to be impaired.

(2) In following cases, independence is deemed to be ruled out: In such cases, when the aforementioned is realized after the acceptance of the task, the Member shall be liable to immediately cease the task and to notify the Association and if required according to relevant legislation, the Board, thereof at latest within 1 week.

  1. If following cases arise for shareholders, managers of Appraisal Entities, Appraisers, Residence Appraisers, their up to third degree (third degree included) blood and affinity relatives and their spouses or their Appraiser Entities;
    1. That any direct or indirect benefits or any promises for benefits have arisen beyond those specified in appraisal contract, on behalf of them from the customer or those related with the customer,
    2. That they entered into a partnership with the customer or customer’s shareholders or any natural or legal persons affiliated with customer or under its influence with respect to management, audit or capital relations, within recent two years including the period, when the appraisal service was rendered,
    3. That they had been assigned as board chairman or board member, company manager or assistant manager or at different positions with authority and responsibility or had any other business relationship, at the customer and customer’s subsidiaries, its affiliated companies and participations under mutual control, within recent two years including the period, when the appraisal service was rendered,
    4. That they had any debt/credit relation with customer and customer’s subsidiaries, its affiliated companies and participations under mutual control,
  2. If the payment of any appraisal fee in past years was not made by the customer, without any reasonable cause,
  3. If the appraisal fee depends on conditions related with appraisal results, or deviates to a great extent from fair market prices, or was set taking into account other services rendered to the customer by Association Member.

(3) The conditions described above do also apply to natural persons and entities acting as outsourcer for Association Member.

The principle for professional diligence and rigor

ARTICLE 9 - (1) Members have to show due professional diligence and rigor in planning, processing and completing the appraisal task and preparing the appraisal report. Diligence and rigor represents the attentiveness and effort to be shown by a deliberate and prudent appraiser, accentuating details under constant conditions. The minimum benchmark of due diligence and rigor is a flawless compliance with the regulations of Board and Association about appraisal activities, the establishment of an internal audit system and that other measures have been taken as required. Members have to duly plan, schedule the appraisal activity, perform analyses based on sufficient, appropriate and reliable information and documents collected, prepare orderly study sheets and state her/his own opinions in the appraisal report to be compiled diligently and rigorously.

The principle for efficient use of resources

ARTICLE 10 - (1) Members should utilize efficiently and effectively the material, technological and human resources, as prescribed in the legislation for their activities.

The principle for competition and observing social utility

ARTICLE 11 - (1) Members should conduct their professional activities without leading to unfair competition and by observing professional ethics rules. Beneath business goals, they should observe social utility and environment too. They should show attention with due regard, supporting social and cultural tasks.

Fight against laundry of proceeds of crime

ARTICLE 12 - (1) In order to ensure that capital market operations are conducted in reliance and transparency – Appraisal Entities as Legal Entity Members take necessary measures for identifying suspicious transactions in fight against laundry of proceeds of crime, fraud and similar crimes and acting according to relevant legislation under the framework of international and national legislation provisions; they collaborate with relevant organizations, institutions and authorities in this respect, take in-house measures as required for this purpose and organize training programs for their employees.

CHAPTER THREE

Relations with customers

Contracting requirement

ARTICLE 13 - (1) Members should conduct their business relations with their customers under written contracts setting forth the acts and professional conduct of the parties.

(2) For the appraisal of any real estate or real estate project or interests and benefits associated with real estate by an Association Member – an appraisal contract including the minimum requirements set forth by the legislation has to be made between the Association Member and the customer setting forth the rights and liabilities of the parties.

Fair treatment

ARTICLE 14 - (1) They should observe their liabilities with respect to loyalty and due diligence in their relations with their customers and adopt a fair treatment among their customers.

Conflicts of interest

ARTICLE 15 - (1) Appraisers and Residence Appraisers have to stay away from conflicts of interest that might arise when performing their studies, have to avoid any intervention that might affect their good faith and objectivity, and have to share the opinions they have conceived as the result of analyses in their reports without considering direct or indirect interest of others.

Confidentiality

ARTICLE 16 - (1) Members are not allowed to disclose any information about their customers and appraisal tasks and to use them in order to cause third parties or themselves, to benefit directly or indirectly or in order to damage others. This liability shall survive even after the task is completed.

(2) However, in cases when explicitly approved or requested by their Customers or when requested by authorized public organizations under law, relevant information can be disclosed to related person or entities.

Employees’ relations with customers

ARTICLE 17 - (1) Following apply to employees of Appraisal Entities;

a) They can never enter into relations with customers, failing to comply with ethical rules,

b) Any kind of article and benefit, with or without economic value, whether received directly or indirectly, that affects or could affect the objectivity, performance, decision of Professional Appraiser or fulling his/her duty is deemed as gift by definition. Professional Appraisers can never accept gifts from customers.

Following items are excluded from the definition of accepting a gift:

  • Books, magazines, articles, CD’s, cassettes or similar articles
  • Prizes or gifts awarded in public contests, campaigns or organizations
  • Gifts that are characterized as souvenirs given in public conferences, symposiums, forums, panels, receptions or similar organizations
  • Promotion and handicraft items of symbolic value given away to public for advertising purposes
  • Loans obtained from finance institutions at market conditions

c) They can never derive directly or indirectly benefits from their business circumstances as well as their customers’ business opportunities, in order to gain personal benefits, using their positions.

Customer complaints

ARTICLE 18 - (1) Members investigate and take necessary measures in order to prevent the recurrence of justified complaints, beneath clarifying any questions to be raised by customers, the reasons of customer complaints. Members clarify their employees about incorrect practices causing complaints in order to correct them and to prevent their recurrence.

CHAPTER FOUR

Relations with Other Members

Professional accountability, cooperation and information exchange

ARTICLE 19 - (1) Members should act in cooperation for the healthy development of appraisal sector.

(2) Members enable delivery and recording of data that are not deemed legally as confidential information in an explicit and comprehensible form and within a prescribed period of time, under the scope the Association’s Executive Board decision setting forth related procedures and principles, for a database to be established within the framework of the Association, to be used in studies aiming to contribute to the development appraisal business and services as a major goal.

Prevention of unfair competition

ARTICLE 20 - (1) Members should contribute on their part to the mission of appraisal sector’s development in an equitable, competitive and effective structure, with the conciseness of their professional responsibilities, under the framework of the guidelines of professional conduct issued by the Association. Member must in this respect;

a) Never act in misleading and deceiving manners.

b) Never prepare and issue knowingly reports containing deceptive, faulty, prejudiced, imaginary, unsupported views and analyses.

c) Always act in compliance with law and legislations.

d) Never pretend to have professional qualifications actually not born and share any information making such an impression.

e) Never make knowingly erroneous, misleading and exaggerated statements and promote her-/himself as such – in order to solicit more jobs. Never act harming the business reputation of other members and violating the principles of fair trade.

f) Always ensure that any assisting personnel or employee reporting to her/him does also observe the Rules of Professional Conduct of Turkish Appraisers’ Association.

g) Never act in a manner similar to those described above that would lead to unfair competition.

CHAPTER FIVE

Relations with employees

General qualifications of employees

ARTICLE 21 - (1) In order to improve the confidence in appraisal sector – Members should supervise their employees in developing their sense of honesty and responsibility and their fund of knowledge necessary for performing their studies and tasks, and should observe the rights and benefits of their employees.

Professional proficiency

ARTICLE 22 - (1) Professional proficiency represents that the education and professional experience necessary for the task to be undertaken is at an adequate level to conduct appraisal studies.

(2) Maintaining professional proficiency further requires that relevant licenses are available as prescribed in the legislation in the related fields and that the Rules of Professional Conduct issued by Turkish Appraisers’ Association and regulations enacted by the Association are complied with.

Allowed and forbidden acts

ARTICLE 23 - (1) Appraisal Entities as Legal Entity Members can render consulting services in fields such as market surveys related with real estates, feasibility studies, legal due diligence studies for real estate and related rights, vacant land and developed project value analysis and best and efficient use analyses.

(2) Appraisal entities are not allowed to conduct any activity including real estate brokerage beyond real estate appraisal activities, except for the activities described in the first paragraph.

(3) Professional appraisers and residence appraisers, on the other hand;

  1. cannot be simultaneously employed by or become shareholder in more than one real estate appraisal company; cannot act as manager or shareholder in any other capital market entities,
  2. cannot conduct any other activity beneath real estate appraisal, except for the activities described in the first paragraph,
  3. cannot behave without observing professional dignity and the principles of their profession,
  4. cannot undertake tasks for which they are not qualified with their existing knowledge and skills,
  5. cannot work with any title whatsoever for the companies and their affiliates, for which they have rendered appraisal services, until a period of 2 years has passed, Sub-paragraph (b) does not apply to professional appraisers and residence appraisers contracted with appraisal companies without a full-time employment relationship. However, in any case, such individual cannot carry out real estate brokerage activities.

Career development

ARTICLE 24 - (1) Members should endeavor to the extent of their financial capacities to provide all of their employees, tools required to fulfill their tasks to knowledge necessary for success, training programs necessary to develop their skills, opportunities necessary for their career development.

(2) When assessing professional appraisers and residence appraisers – Members should take into account their adherence to Association’s Rules of Professional Conduct as a measure, beneath professional development knowledge, skills and personal success.

SECTION SIX

Miscellaneous provisions

Internal auditing and setting ethical rules by entities

ARTICLE 25 - (1) Turkish Appraisers’ Association sets forth with the Ethical Agreement, the ethical rules applicable to the operations of Appraisal Entities and their relations with their customers and employees, without conflicting with the legislation, in accordance with the provisions of this present regulation, and updates this Ethical Agreement as required. 

(2) Members obtain a signed letter of undertaking, to be prepared within six months following the date of entering into effect of Ethical Agreement, from the personnel employed by them, stating that they have read and understood internal ethical rules and that they shall act in line with these rules during their tenure.

 (3) Appraiser Entities monitor the compliance of their employees with aforementioned rules.

Relations with the Association and other public institutions and organizations

ARTICLE 26 - (1) Members should act in accordance with the guidelines of good faith and transparency in their relations with the Association and other public institutions and organizations, and should show due diligence and act facilitating the duty of related personnel in delivering timely and completely any information, documents or records to be requested by the Association and other public institutions and organizations, authorized to request information for auditing and controlling purposes as prescribed by the legislation.

Development of rules of professional conduct

ARTICLE 27 - (1) Members may any time submit new recommendations for improving and amending as required the ethical principles and rules of professional conduct, to the Association’s Board of Directors.

Sanctions

ARTICLE 28 - (1) Violations of this present regulation shall be processes according to the provisions of the Statue of Turkish Appraisers’ Association and of the Association’s Discipline Regulation.

Effective date

ARTICLE 29 - (1) This present regulation enters into effect as of the date it is approved by the Association’s Board of Directors.