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Wednesday, June 7, 2017

Valuation Agreement

Valuation Agreement

Between Nabil Bank Limited and ID Consulting Engineers

This agreement is made and entered into on 15.05.2017 between Nabil Bank Limited, a public limited company incorporated and operated under the laws of Nepal, having its registered address at Beena Marg, Durbar Marg, Kathmandu, Nepal (hereinafter called the “Bank”) and Mr. Dilip Pageni associated with M/S ID Consulting Engineers incorporated under the laws of Nepal having registered address at Nadipur-3, Pokhara, Kaski (which shall include its lawful successors, hereinafter called the “Valuator”).

Article I – Scope of Work

1.The valuator represents that he is fully authorized to do and carry evaluation works as per the prevalent laws and that he is fully equipped and competent to carry evaluation works and do have the necessary qualifications, skills and experiences required for the same.

2.The Valuator hereby agrees to provide valuation services of land and building offered as collateral for the Bank while granting credit facilities. The valuator agrees to provide such services in line with the conditions of this agreement.

3.The valuation criteria as per the Attached Annexure I shall be an integral part of this agreement. The Valuator shall strictly comply with the conditions prescribed in the Agreement and the Valuation Criteria while valuating the property and submitting the valuation report to the Bank.

Article II – Valuation Methodology

To determine the value of the Property, a suitable technique like rental / earning or prevailing market price or replacement cost, sale-ability, availability of buyer or any other method deemed appropriate depending upon the purpose of the valuation should be adopted and the method adopted by the valuator in assessing the value should be mentioned in the Valuation Report to be submitted to the Bank.

Article III- Valuation Fee

a)The fees, charges due to the Valuator for doing the evaluation works shall be directly charged by him to the Bank’s customer concerned (hereinafter called the “Client”) and in no event whatsoever shall the Bank be held liable for the same. Unless and otherwise specifically agreed by the Client and the Valuator, the normal valuation fee shall be 0.125% of the Fair Market Value, however such fee shall not be less than Rs. 5,000 and not more than Rs. 30,000. Depending on the complexity of the job, higher than the maximum ceiling can be charged thru negotiation with the Client on case to case basis.

b)The fees/charges for reassessment of the already valuated property shall be as decided by the Bank from time to time or as mutually agreed by Valuator and the Client.

c)In case of consortium financing, valuation fees and charges shall be subject to the consortium decision.

Expenses incurred and paid by the Bank while obtaining credit reports from Credit Information Centre Limited (CICL) on the Valuator in line with NRB’s regulations and Bank’s policies shall be on account of the Valuator.

Article IV – Responsibility and Obligations
1.The Valuator should extend valuation services (including reassessments) as and when approached by the Client or the Bank in the course of transacting on various Bank products.

2.The Valuator is fully aware of all the job requirements of the Bank and shall maintain the consistency in each report he/she submits.

3.The Valuator agrees that while conducting the evaluation works, it would be the foremost concern of the Valuator to protect the interest of the Bank and such valuation works shall be conducted on the basis of standard engineering methods through qualified and licensed engineers enrolled with Nepal Engineering Council. Value and other details, as reported in the valuation reports submitted to the Bank, shall be true and correct and shall be as per the market/distress rates in line with the valuation guidelines.

4.The valuator shall furnish the details of the engineers to be involved in assisting the valuation works, if applicable.

5. The Valuator shall always remain vigilant of possible fraud while undertaking
valuation/revaluation/reassessment assignments.

6.The Valuator shall not sub-contract the assignment to any other individual or firm.

7.The Valuator shall ensure the proposed property fulfils the collateral acceptance criteria set by the Bank. In case of non-fulfillment of any of the criteria, the Valuator shall not undertake the assignment and inform the Bank accordingly. Valuation assignment of such exceptions may be undertaken only upon receipt of written consent of the competent authority of the Bank.

8. The Valuator or his authorized person shall obtain the latest cadastral map/ Blue print Map (napi naksa) trace map/ of the plot and related documents confirmed attested by concerned the government agency.

9.The Valuator shall check the legal status of the property before processing for valuation.

10. Incomplete property valuation shall not be accepted. The Bank reserves the right to reject the valuation report or ask for reassessment /review if the valuation report is found inadequate.

11.The Valuator shall not disclose the value of the property or handover a copy of the valuation report to the Client until the Bank provides a confirmation in writing that their valuation report has been fully accepted by the Bank. The valuator is required to submit the report directly to the Bank.

12.The Valuator hereby confirms that he/she shall neither perform any valuation job to the Client nor advise/influence any other valuator for the valuation of the property in case the Valuator has direct or indirect interests on the Client or the property due to close relationships or for any other reason. In such a situation he/she shall inform/disclose to the Bank the nature of interest he/she has on the Client or the property.

13.The Valuator shall maintain maximum of the agreed turnaround time of jobs within 7 days from the day he has taken the valuation responsibility or the day he receives all the required documents/information from the Client which ever is later.

14.The Valuator agrees that all valuation jobs completed on behalf of the Bank shall be true and correct, free of any bad intentions and shall be performed independently without any influences of Client or any other related/unrelated party. The report submitted by the Valuator shall be based on fair, reasonable and valid judgments.

15.The Firm/Company and Engineer shall be jointly and severally responsible for the documents and information furnished / declared in the valuation report and shall also be liable to clarify in case of any dispute/ambiguity arising in relation to location and/or value of the property and/or other information furnished in the report.

16.The Valuator shall maintain current, savings or Fixed deposit account with the Bank and maintain at least NPR.--- 000,000/- (Rupees 0 Lakh Only) under lien or submit a Performance Bond of NPR. 000,000/- (Rupees --- Lakh Only) as guarantee for his services to the Bank. The security deposit/Performance Bond shall continue to be effective for one more year from the date of expiry of the valuation agreement. Refund of Security Deposit / Release of Performance Bond shall be made only after this period.

17. Except for unforeseen/unanticipated reasons, the Valuator hereby agrees to indemnify the Bank for any losses or damages which the Bank may incur in respect of any transaction undertaken by the Bank based on the representation and information provided by the Valuator, which if at a later stage are found to be inaccurate or mis-representation of the facts, due to which the prospect of recovery of the Bank’s dues from the valuated property is substantially diminished.

18. The Valuator agrees that the Bank may forfeit / invoke the amount deposited / Performance Guarantee provided under sub-article 16 above and agrees to deposit additional amount in the current account / submit additional Performance Bond to compensate the forfeited / invoked amount in case of the circumstances as stated under sub-article 16 herein above.

19. The Valuator shall provide a complete report of the property valuated and submit to the Bank a complete report in the format as per Section 3 of the Annexure.

20. The valuator agrees that notwithstanding anything written here-in-above, the indemnity herein contained shall continue to be enforceable till the client of the Bank, whose security has been evaluated by the Valuator, settles the entire loan outstanding and releases the property concerned.

21. During the validity of this agreement, the Valuator shall not change its legal status/ownership without the consent of the Bank and shall also renew its license/firm registration timely as applicable.

22.The valuator agrees that written intimation from the Bank of any loss or damage stating the quantum thereof along with the detailed particulars as to how and due to what circumstances the damage or loss was caused, unless in case or manifested errors shall be final and binding.

23.The Bank reserves the right to check the site and the property evaluated by a valuator with or without informing him/her, or alternatively Bank may seek a second opinion on the valuation report submitted by a valuator from another valuator selected by the Bank.

24.In the event of breach of any of the terms and conditions stipulated in the agreement or if the Bank finds the performance of the authorized Valuator unsatisfactory for whatsoever reason, the Bank reserves the right to de-list the Valuator from its panel of Valuators at any point of time and also reserve the right to initiate action against you, your company/firm and its directors/proprietor as may be deemed fit for any acts of omission in the context of this engagement.

25.The Valuator is deemed to be aware about the conditions of Blacklisting circular in respect of collateral valuations issued by Nepal Rastra Bank from time to time. The Valuator confirms that he/she shall consider the provision thereof while valuating the properties for the Bank and be liable for blacklisting under the conditions stated therein.

26.During the validity of this agreement, the valuators, his/their firm, his/their family members should not have any borrowing relationship with the bank and should not enjoy any kind of loan facility from any branch of the branch in capacity of borrower, associates and guarantor.

Article V- Confidentiality

The valuator, its employees and staffs involved in the valuation job shall maintain strict confidentiality in respect of any information relating to the Bank or the Clients, which they may come across in the course of providing their services under this agreement or otherwise and that such confidentiality shall be maintained even after the expiry or termination of this contract.

Article VI- Amendment, Period of performance, Renewal and Termination

Any terms and conditions of this agreement may be amended or modified during the validity period hereof upon mutual understanding of both parties in writing.

This agreement shall be valid for the period of one year commencing from 15.05.2017 until 14.05.2018. The agreement may be renewed by the Bank for further tenor subject to satisfactory performance of the Valuator. For non-renewal if any, Bank shall be under no obligation to explain the reason thereof.

This agreement if entered into with the firm/company shall automatically terminate if the association of the key engineer signing this agreement on behalf of the firm/company terminates, resulting in discontinuation of his valuation services on behalf of the firm/company.

Either party may terminate this agreement at any time by giving 30 days prior notice to the other party subject to continuation of the Valuator’s obligations in line with Article IV (20) above.

Provided that in case of failure to comply with the terms and conditions of this agreement by the Valuator, the Bank shall be entitled to rescind this agreement immediately without any obligations on the Bank’s part.

This agreement shall be deemed as terminated if you and/or your authorized person's name and/or your firm/company and/or the shareholders/directors of your firm/company found as black listed in CICL record.
Both the parties hereby agree to observe the above-mentioned terms and condition and put their signature on their behalf.