Forcing to use the services of a specific appraiser by a bank to value real estate as an act of unfair competition

Using the banks’ loan offer to finance the purchase of real estate is associated with the need to evaluate the value of the property. Banks often impose on persons applying for a loan the company that is to prepare such a valuation. As stated by the Supreme Court in its judgment of 23 May 2023 in case II CSKP 1641/22, such action may constitute an act of unfair competition. .

The subject of the proceedings was a claim to prohibit the bank from providing information to borrowers about the impossibility of commissioning an appraisal report from property appraisers not on the lists of property appraisers accepted by the bank and from indicating specific companies as the only ones authorised to prepare real estate valuations for consumers applying for a loan.

In the opinion of the Supreme Court, such an action meets the requirements of an act under art. 15(1)(5) of an Act on Combating Unfair Competition. According to this provision, an act of unfair competition is hindering other entrepreneurs’ access to the market by actions which aim to force the clients to choose a specific entrepreneur or by creating conditions enabling third parties to force the purchase of goods or services from a specific entrepreneur.

In the analysed case, the bank’s actions resulted in the borrower actually having the limited choice of property appraisers to those preferred by the bank. At the same time, access to the real estate was hindered for other property appraisers (outside the bank’s list). The borrower’s decision to choose the property appraiser was influenced by the type of economic coercion used by the bank, because the borrower will not order the preparation of an expert opinion from the appraiser not on the bank’s lists, because this expert opinion, for which he spends money, will not be honoured by the bank and the borrower will still have to pay for an expert opinion prepared by an appraiser accepted by the defendant bank.

As the Supreme Court found, it is obvious that in such a situation the borrower’s valuation prepared by a property appraiser from outside this list is not economically advantageous for him, since he would have to pay twice and this circumstance determines his choice of a property appraiser included on such a list.

Also making the bank’s acceptance of real estate valuation for purposes related to the loan agreement conditional on whether the property appraiser has undergone training provided for in the bank’s internal procedure not only limits the borrower’s ability to choose a property appraiser, an therefore at least threatens his interest, but this type of practice also threatens the public interest. This raises doubts as to whether a property appraiser who has undergone the bank’s training procedure as an entrepreneur still meets the qualities indicated in Art. 175(1) of the Real Estate Management Act, and in particular whether such a property appraiser is impartial when valuing real estate. Finally, this type of hindering access to the market for entrepreneurs who did not undergo trainings organised by the bank undoubtedly also at least threatens their property interests in the form of lack of receiving remuneration for this type of expertise.

• Judgment of the Supreme Court of 25 May 2023, case reference no II CSKP 1641/22