Agency gets ready to value, purchase and develop properties

AMONG the sweeping new powers to be given to the new National Asset Management Agency (NAMA) includes the right to value, buy and even develop properties or lands.

NAMA’s role in taking control of the bad debts of banks will be helped by a valuation panel who will review the value of assets when disagreements arise with banks over their real cost.

However, yesterday’s draft legislation stipulates that despite the far-reaching powers for NAMA, the final decision on asset values could be left to the Minister for Finance.

The legislation stated that the value of a bank asset will be its “long-term economic value”, as determined by NAMA.

But the minister has the power to direct NAMA to pay a bank more, or demand a return of money, according to the draft legislation.

The minister can “remit the matter” of an assets value back to the valuation panel.

Section 102 of the bill adds: “Where the minister determines that the value should be increased, this section provides that the minister may direct NAMA to compensate the participating institution to the amount of the appropriate difference... where the minister determines the value should be decreased, the participating institution will repay the overpayment.”

Where a financial institution fails to cooperate with NAMA in “due diligence”, it can be liable for damages.

NAMA also has the discretion about who it wants to transfer or sell assets to.

Crucially, it also has the power to appoint a receiver for a property when payments are defaulted on.

The new agency, expected to come into operation in October, will also be able to make compulsory purchases of lands and properties.

It can apply to the courts to do so. Notices must, however, be served on people with interests in those lands.

Where owners of lands are aware that certain changes to related or connected lands could change its value, they must let NAMA know when it is considering buying up an asset.

Extra powers granted to the agency also include its ability to develop lands. This is to secure the “best return reasonably possible”, according to the draft legislation. Under the new laws being considered, banks will have to hand over all records and documents on assets once they sign up to the agency. NAMA will then decide which assets it is likely to buy at the expected discounted price.

The agency will produce an annual report and will have the ability to engage experts to help it function.