Article 229
Valuation principles for eligible collateral other than financial collateral
1.
The valuation of immovable property shall meet all of the following requirements:
(a)
the value is appraised independently from an institution’s mortgage acquisition, loan processing and loan decision process by an independent valuer who possesses the necessary qualifications, ability and experience to execute a valuation;
(b)
the value is appraised using prudently conservative valuation criteria which meet all of the following requirements:
(i)
the value excludes expectations on price increases;
(ii)
the value is adjusted to take into account the potential for the current market value to be significantly above the value that would be sustainable over the life of the loan;
(c)
the value is documented in a transparent and clear manner;
(d)
the value is not higher than a market value for the immovable property where such market value can be determined;
(e)
where the property is revalued, the property value does not exceed the average value measured for that property, or for a comparable property over the last six years for residential property or eight years for commercial immovable property or the value at origination, whichever is higher.
For the purpose of calculating the average value, institutions shall take the average across property values observed at equal intervals and the reference period shall include at least three data points.
For the purpose of calculating the average value, institutions may use the results of the monitoring of property values in accordance with Article 208(3). The property value may exceed that average value or the value at origination, as applicable, in the case of modifications made to the property that unequivocally increase its value, such as improvements of the energy performance or improvements to the resilience, protection and adaptation to physical risks of the building or housing unit. The property value shall not be revalued upward if institutions do not have sufficient data to calculate the average value except if the value increase is based on modifications that unequivocally increase its value.
The valuation of immovable property shall take account of any prior claims on the property, unless a prior claim is taken into account in the calculation of the gross exposure amount pursuant to Article 124(6), point (c), or as reducing the amount of 55 % of the property value pursuant to Article 125(1) or Article 126(1), and reflect, where applicable, the results of the monitoring required under Article 208(3).
2.
For receivables, the value of receivables shall be the amount receivable.
3.
Institutions shall value physical collateral other than immovable property at its market value. For the purposes of this Article, the market value is the estimated amount for which the property would exchange on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction.
4.
EBA shall develop draft regulatory technical standards to specify the criteria and factors to be considered for the assessment of the term ‘comparable property’, as referred to in paragraph 1, point (e).
EBA shall submit those draft regulatory technical standards to the Commission by 10 July 2027.
Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph of this paragraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.