What is Included in Collateral Asset Monitoring
- Verification of its actual existence and location.
- Photo and video recording of the object under study.
- Reconciliation with registration data.
- Monitoring of condition and integrity.
- Audit of technical characteristics, insurance status, and valid technical inspections.
Based on the activities carried out, an inspection report is drawn up, which, along with other materials related to the asset (photos, invoices, conclusions), is provided to the client. The inspection is carried out directly on-site.
Purpose of Monitoring
Regular inspections provide complete and competent information about the asset’s condition and motivate pledgors to fulfill their credit obligations. They help protect the interests of banks, buyers, and other rights holders from risks associated with the debts of the asset’s previous owner and avoid asset seizure. Tasks of inspections:
- Protecting buyers when purchasing an asset, guaranteeing it is free from debts.
- Confirming the legal cleanliness of transactions.
- Ensuring the preservation of the collateral during debt restructuring.
- Valuation if there are suspicions of deterioration in its characteristics.
- Assessing risks of changes to the collateral’s original characteristics during use.
Thus, the work of collateral departments improves, and the geography of services expands. Regular monitoring ensures timely payments.
International inspections of movable property in collateral are organized through the registers of the Federal Notary Chamber, while real estate checks are conducted via the USRN (Unified State Real Estate Register) and professional reports from lawyers and appraisal specialists specializing in collateral.
Purchasing real estate, vehicles, or other valuable assets without inspection carries the risk of losses due to their seizure without compensation and legal disputes. Capitalization of collateral objects will also be challenging.
Types of Collateral Valuation
One of the essential conditions for pledging property and material assets is determining its value. This is done before signing the credit agreement. It can be internal or independent:
- Internal valuation is conducted by individuals or legal entities independently based on accounting data and information about the object’s value (if purchase documents are absent, an appraisal method may be used). Results are reflected in a report, along with supporting documents.
- Independent appraisals are conducted by experts under a concluded contract. A report and conclusion are prepared based on the results.
Inspection Stages
To inspect valuables and movable property, one must visit the official website of the FNP (Federal Notary Chamber) and open the search tab in the register. Enter information about the collateral item: its type, name, and search for the desired entry. This register contains data on all notifications regarding property under collateral within the Russian Federation.
To search for collateral real estate, one must contact Rosreestr by submitting a request for an extract containing information about the object. In international projects, qualified appraisers and lawyers with experience in collateral inspections are typically engaged for this purpose. They provide detailed reports with market valuation and confirmation of legal cleanliness.
To write off real estate owned by the Russian federal government, coordination with Rosimushchestvo, the Ministry of Foreign Affairs, and other relevant authorities is required. In this case, a package of documents must be assembled, including:
- A written appeal from the head of the organization.
- A list of objects to be written off the balance sheet. It must include: serial and inventory numbers in the register, full name, year of commissioning, book and residual value, useful life established for the object.
- A copy of the decision to create the write-off commission.
- A copy of the commission meeting minutes.
- Write-off acts.
Additionally, inventory cards, copies of documents confirming the Russian Federation’s ownership rights, technical passports, etc., may be required. Inspections begin with identification:
- for vehicles – by body number or VIN;
- for real estate objects – by cadastral number;
- for equipment – by serial numbers or factory plates.
Inspections are mandatory when selling collateral property to third parties. The point is that if obligations are not fulfilled, the collateral holder can recover its amount by selling the property. It is put up for public auction, where the price may increase. In such a situation, the excess amount is returned to the person who pledged the property. The sale can also be canceled if the debtor fulfills the obligations in full. This type of inspection is often used in mortgage lending. A team of independent experts agrees on the appraisal object, checks its rights and encumbrances, and sets the time required for the examination. Then the inspector:
- inspects the property;
- collects documentation;
- analyzes the market situation and determines the object’s value;
- processes the data and prepares a detailed conclusion based on the results.
Three approaches are used for collateral valuation:
- Cost Approach. The value is determined based on the sum of costs required to recreate an object or item with the same characteristics.
- Comparative Approach. The collateral price is formed considering data on the cost of similar objects.
- Income Approach. This method is used if the collateral asset can generate income.
The choice of method depends on the specific situation.
Advantages of Our Company
We provide expert and inspection services, including collateral asset examinations, to individuals and organizations of all ownership forms. Thanks to professionalism and automation of computational processes, we guarantee detailed and accurate reporting. We organize inspections of real estate, vehicles, and any valuable property quickly and efficiently. We operate in Russia and 10 other countries worldwide. We have representations on five continents. Our services include:
- Physical inspection of assets. We visit sites, verify against documents, and record the current condition.
- Photo and video recording to analyze storage conditions.
- Studying changes that have occurred to the object during its use (defects, losses, signs of collateral alteration).
- Reconciling the asset’s actual condition with the collateral agreement terms.
- Identifying and analyzing discrepancies.
- Preparing reports with conclusions and assessments of potential risks.
Our company’s technical capabilities allow us to combine geodesy, cartography, and engineering surveys into one integrated complex. We perform all work promptly and quickly, without delays, guaranteeing high service quality. You can submit a request on our website or call us for more detailed information. We will be happy to assist in resolving your issues!
