Canadian Property<\/p>\n
VALUATION \u00c9VALUATION
\n Immobili\u00e8re au Canada<\/p>\n
VOLUME 53 | BOOK 4 | 2009THE OFFICIAL PUBLICATION OF THE APPRAISAL INSTITUTE OF CANADA<\/p>\n
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REAL VALUE EXPERTS | EXPERTS EN \u00c9VALUATION<\/p>\n
Transfering leadership
\nPreparing for
\nthe unexpected
\nThe role of mentor
\nversus co-signer<\/p>\n
The Tr ansiTion<\/p>\n
Appraising in a recession
\nDo rent restrictions increase condo values?<\/p>\n
AppraisersChoice.com Call Now 800-234-8727 <\/p>\n
Get the Latest Forms,
\nFeatures, & Functions CRAL2009\u2122<\/p>\n
ACI and its products are trademarks or registered trademarks of ACI. | Copyright \u00a9 2009 ACI | Other brand and product names are trademarks or registered trademarks of their respective owners.<\/p>\n
CRAL2009\u2122 offers best-of-breed tracking, forms, digital photo imaging, comps database
\nmanagement, integrated sketching, and mobile software. <\/p>\n
A product simple enough for a new user but powerful enough to suit the largest appraisal
\ncompanies and financial institutions, CRAL is used by thousands of companies in Canada who
\ncontinue to help drive its unrivaled feature set.<\/p>\n
CRAL2009\u2122 Highlights
\nNew Features<\/p>\n
\u203a Power Toolbar
\n \u203a Help Contents
\n \u203a Comp Side-by-Side View
\n \u203a Vertical Split View
\n \u203a Full Addendum Editing
\n \u203a ACISketch\u2122
\n \u203a MapPoint Updates
\n \u203a PDF Printing
\n \u203a System Utility Updates
\n \u203a Updated Website<\/p>\n
New Forms
\n \u203a AIC Full Appraisal
\n \u203a AIC Drive-By Appraisal
\n \u203a AIC Desktop Appraisal
\n \u203a AIC Limited Appraisal
\n \u203a AIC Summary-<\/p>\n
Schedule-A
\n \u203a Canadian ERC 2002
\n \u203a US 2003 Employee <\/p>\n
Relocation
\n \u203a Updated CNA Forms<\/p>\n
The Premier Appraisal Software
\nfrom the 30-Year Industry Leader<\/p>\n
Package Includes <\/p>\n
\u203a One CRAL Install including:
\nAppraisal Forms Library, Order Tracking,
\nPhoto Management, and Comps Database<\/p>\n
\u203a ACI Sketch\u2122<\/p>\n
\u203a Digital Signature (One)<\/p>\n
\u203a MapPoint (One Year)<\/p>\n
\u203a Free PDF Creator<\/p>\n
\u203a Premier Plus Service (One Year)
\nIncludes Support & Updates<\/p>\n
\u203a Desk-to-Door\u2122 Service<\/p>\n
Visit AppraisersChoice.com or call
\n800-234-8727 to request your free demo.<\/p>\n
* Payable in US Dollars<\/p>\n
Limited Time Offer<\/p>\n
CRAL2009\u2122 $495*<\/p>\n
Form300 10\/08<\/p>\n
C
\nR<\/p>\n
A
\nL<\/p>\n
C
\nollection for W<\/p>\n
indow
\ns<\/p>\n
80
\n0
\n-234-8727<\/p>\n
24 Old Kings Road North
\nPalm Coast, Florida 32137t 800-234-8727 f 386-246-3811AppraisersChoice.com<\/p>\n
THE APPRAISER\u2019S CHOICE\u2122<\/p>\n
THE APPRAISER\u2019S CHOICE\u2122<\/p>\n
CRAL2009\u2122 Collection for Windows<\/p>\n
A
\np
\np
\nraisersC<\/p>\n
ho
\nice.co<\/p>\n
m<\/p>\n
ACI Sketch\u2122
\nPowerful Floorplan Technology
\nSimple to use with a minimal
\nlearning curve and
\nintuitive features like:<\/p>\n
\u203a Online Help
\n \u203a Tape Measure Tool
\n \u203a Feet & Inches
\n \u203a Labels
\n \u203a Symbols
\n \u203a Arcs
\n \u203a Copy & Paste<\/p>\n
\u201cACI Sketch\u2122 is one of the best new
\nproducts to increase efficiency for <\/p>\n
appraisers. We use it in the office and on
\nour tablet PCs in the field, both with great <\/p>\n
success. We are particularly impressed
\nwith the free-form approach that ACI
\nSketch\u2122 brings to creating floorplans.\u201d
\nJay Delich, President of Arizona Appraisal, LLC<\/p>\n
$99*
\nIncludes CRAL Integration<\/p>\n
Learn More about CRAL2009\u2122
\nVisit AppraisersChoice.com and learn more
\nabout the new features in CRAL2009\u2122<\/p>\n
\u203a Online Training Sessions<\/p>\n
\u203a inMOTION Videos<\/p>\n
\u203a Tech Doc Library<\/p>\n
\u203a ACI Forum<\/p>\n
\u203a Compliance Corner Blog
\nfeaturing Rich Heyn, SRA,
\nDirector of Compliance<\/p>\n
DESK-to-DOOR\u2122 Service
\nIncluded with ALL Purchases
\nAn ACI Desk-to-Door\u2122 Implementation Specialist is
\nat your service and available to walk you through
\nthe set-up process to ensure your system is ready
\nwhen you are.<\/p>\n
A process so smooth and effortless will leave you
\nwondering why you didn\u2019t switch to ACI sooner.<\/p>\n
COACH<\/p>\n
CONFIGURE
\nCONSULT \u203a Directly from Our Desk to Yours <\/p>\n
\u203a System Configuration
\n \u203a We Train Your Staff<\/p>\n
AppraisersChoice.com Call Now 800-234-8727 <\/p>\n
Get the Latest Forms,
\nFeatures, & Functions CRAL2009\u2122<\/p>\n
ACI and its products are trademarks or registered trademarks of ACI. | Copyright \u00a9 2009 ACI | Other brand and product names are trademarks or registered trademarks of their respective owners.<\/p>\n
CRAL2009\u2122 offers best-of-breed tracking, forms, digital photo imaging, comps database
\nmanagement, integrated sketching, and mobile software. <\/p>\n
A product simple enough for a new user but powerful enough to suit the largest appraisal
\ncompanies and financial institutions, CRAL is used by thousands of companies in Canada who
\ncontinue to help drive its unrivaled feature set.<\/p>\n
CRAL2009\u2122 Highlights
\nNew Features<\/p>\n
\u203a Power Toolbar
\n \u203a Help Contents
\n \u203a Comp Side-by-Side View
\n \u203a Vertical Split View
\n \u203a Full Addendum Editing
\n \u203a ACISketch\u2122
\n \u203a MapPoint Updates
\n \u203a PDF Printing
\n \u203a System Utility Updates
\n \u203a Updated Website<\/p>\n
New Forms
\n \u203a AIC Full Appraisal
\n \u203a AIC Drive-By Appraisal
\n \u203a AIC Desktop Appraisal
\n \u203a AIC Limited Appraisal
\n \u203a AIC Summary-<\/p>\n
Schedule-A
\n \u203a Canadian ERC 2002
\n \u203a US 2003 Employee <\/p>\n
Relocation
\n \u203a Updated CNA Forms<\/p>\n
The Premier Appraisal Software
\nfrom the 30-Year Industry Leader<\/p>\n
Package Includes <\/p>\n
\u203a One CRAL Install including:
\nAppraisal Forms Library, Order Tracking,
\nPhoto Management, and Comps Database<\/p>\n
\u203a ACI Sketch\u2122<\/p>\n
\u203a Digital Signature (One)<\/p>\n
\u203a MapPoint (One Year)<\/p>\n
\u203a Free PDF Creator<\/p>\n
\u203a Premier Plus Service (One Year)
\nIncludes Support & Updates<\/p>\n
\u203a Desk-to-Door\u2122 Service<\/p>\n
Visit AppraisersChoice.com or call
\n800-234-8727 to request your free demo.<\/p>\n
* Payable in US Dollars<\/p>\n
Limited Time Offer<\/p>\n
CRAL2009\u2122 $495*<\/p>\n
Form300 10\/08<\/p>\n
C
\nR<\/p>\n
A
\nL<\/p>\n
C
\nollection for W<\/p>\n
indow
\ns<\/p>\n
80
\n0
\n-234-8727<\/p>\n
24 Old Kings Road North
\nPalm Coast, Florida 32137t 800-234-8727 f 386-246-3811AppraisersChoice.com<\/p>\n
THE APPRAISER\u2019S CHOICE\u2122<\/p>\n
THE APPRAISER\u2019S CHOICE\u2122<\/p>\n
CRAL2009\u2122 Collection for Windows<\/p>\n
A
\np
\np
\nraisersC<\/p>\n
ho
\nice.co<\/p>\n
m<\/p>\n
ACI Sketch\u2122
\nPowerful Floorplan Technology
\nSimple to use with a minimal
\nlearning curve and
\nintuitive features like:<\/p>\n
\u203a Online Help
\n \u203a Tape Measure Tool
\n \u203a Feet & Inches
\n \u203a Labels
\n \u203a Symbols
\n \u203a Arcs
\n \u203a Copy & Paste<\/p>\n
\u201cACI Sketch\u2122 is one of the best new
\nproducts to increase efficiency for <\/p>\n
appraisers. We use it in the office and on
\nour tablet PCs in the field, both with great <\/p>\n
success. We are particularly impressed
\nwith the free-form approach that ACI
\nSketch\u2122 brings to creating floorplans.\u201d
\nJay Delich, President of Arizona Appraisal, LLC<\/p>\n
$99*
\nIncludes CRAL Integration<\/p>\n
Learn More about CRAL2009\u2122
\nVisit AppraisersChoice.com and learn more
\nabout the new features in CRAL2009\u2122<\/p>\n
\u203a Online Training Sessions<\/p>\n
\u203a inMOTION Videos<\/p>\n
\u203a Tech Doc Library<\/p>\n
\u203a ACI Forum<\/p>\n
\u203a Compliance Corner Blog
\nfeaturing Rich Heyn, SRA,
\nDirector of Compliance<\/p>\n
DESK-to-DOOR\u2122 Service
\nIncluded with ALL Purchases
\nAn ACI Desk-to-Door\u2122 Implementation Specialist is
\nat your service and available to walk you through
\nthe set-up process to ensure your system is ready
\nwhen you are.<\/p>\n
A process so smooth and effortless will leave you
\nwondering why you didn\u2019t switch to ACI sooner.<\/p>\n
COACH<\/p>\n
CONFIGURE
\nCONSULT \u203a Directly from Our Desk to Yours <\/p>\n
\u203a System Configuration
\n \u203a We Train Your Staff<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada4<\/p>\n
6 The appraiser
\nas referee<\/p>\n
7 L\u2019\u00e9valuateur
\ncomme arbitre<\/p>\n
8 Building a
\nwinning team<\/p>\n
10 Mettre sur pied une \u00e9quipe
\ngagnante<\/p>\n
12 2010 AIC Annual
\nConference<\/p>\n
13 Notice of Annual
\nGeneral Meeting\/
\nAvis d\u2019assembl\u00e9e g\u00e9n\u00e9rale
\nannuelle<\/p>\n
14 Brian McDonald:
\nExploring all angles<\/p>\n
16 Primer on International
\nValuation Standards \u2013 Part 5<\/p>\n
18 Sickness and death in the
\nappraisal profession<\/p>\n
20 Successful leadership transition<\/p>\n
22 Mentor versus co-signer<\/p>\n
24 The wider world of peer review<\/p>\n
26 The investigating perspective<\/p>\n
4<\/p>\n
403-200 Catherine Street,
\nOttawa, ON K2P 2K9 <\/p>\n
Phone: (613) 234-6533 Fax: (613) 234-7197
\nWeb site: www.aicanada.ca<\/p>\n
Contact us at: info@aicanada.ca <\/p>\n
Board of Directors
\nConseil d\u2019administration<\/p>\n
President \u2013 Pr\u00e9sident
\nSheila Young, AACI, P.App (AB) <\/p>\n
President Elect \u2013 Pr\u00e9sident d\u00e9sign\u00e9
\nGrant Uba, AACI, P.App (ON)<\/p>\n
Immediate Past-president \u2013
\nPr\u00e9sident sortant<\/p>\n
George Maurice, AACI, P. App., Fellow (ON)<\/p>\n
Vice-Presidents \u2013 Vice-pr\u00e9sidents
\nKimberly Maber, AACI, P.App (SK)<\/p>\n
John Yannacopoulos, AACI, P.App (BC)<\/p>\n
Directors \u2013 Directeurs
\nGreg Bennett, AACI, P.App (NL)
\nGeorge Ward, AACI, P.App (BC)<\/p>\n
Michael Mendela, AACI P.App (ON)
\n Alfred Mullally, AACI, P.App (NS)<\/p>\n
Andre St-Arnaud, CRA (QC)
\n David Shum, AACI, P.App (AB)<\/p>\n
David Babineau, AACI, P. App., Fellow (NB)
\n Lorne Mikulik, AACI, P.App (MB)
\nScott McEwen, AACI, P.App (PE)<\/p>\n
Chief Executive Officer
\nGeorges Lozano, MPA, Ottawa<\/p>\n
Director of Marketing & Communications
\nJoanne Charlebois, Ottawa<\/p>\n
Managing Editor \u2013
\nR\u00e9dacteur administratif<\/p>\n
Craig Kelman, Winnipeg<\/p>\n
Assistant Editor \u2013
\nR\u00e9dacteur en chef adjoint<\/p>\n
Cheryl Parisien, Winnipeg<\/p>\n
Editorial Board
\nAIC would like to thank the following <\/p>\n
individuals for their assistance and support:
\nGrant Uba, AACI, P. App. \u2013 Chair<\/p>\n
John Peebles, AACI, P. App
\nAndr\u00e9 Beaudoin, CRA<\/p>\n
David Lopatka, AACI, P. App
\nJoanne Hayes, AACI, P. App<\/p>\n
Rob Grycko, CRA
\nJane Londerville, B.Sc., M.B.A.,AACI (Hon)
\nAssociate Professor, University of Guelph<\/p>\n
Publication management, design and production by:<\/p>\n
The articles printed in this issue represent authors\u2019 opinions only and are not neces-
\nsarily endorsed by the APPRAISAL INSTITUTE OF CANADA. Copyright 2009 by the
\nAPPRAISAL INSTITUTE OF CANADA. All rights reserved. Reproduction in whole or
\nin part without written permission is strictly prohibited. Subscription, $40.00 per
\nyear. Printed in Canada. Les articles imprim\u00e9s dans ce num\u00e9ro ne rep\u00e9sentent que
\nl\u2019opinion de leur auteur respectif, mais ne sont pas n\u00e9ces\u2013sairement endoss\u00e9s par
\nL\u2019INSTITUT CANADIEN DES \u00c9vALUATEURS. Tous droits reserv\u00e9s 2008 par L\u2019INSTITUT
\nCANADIEN DES \u00c9vALUATEURS. La reproduction totale ou partielle sous quelque form
\nque se soit sans authorisation \u00e9crite est absolument interdite. Abonnement $40.00
\npar ann\u00e9e. Imprim\u00e9 au Canada.
\n* The Appraisal Institute of Canada reserves the right to reject advertising
\nthat it deems to be inappropriate.
\n** The publisher and the Appraisal Institute of Canada cannot be held liable for
\nany material used or claims made in advertising included in this publication.
\nIndexed in the Canadian Business Index and available on-line in the Canadian
\nBusiness & Current Af fairs database.<\/p>\n
ISSN 0827-2697<\/p>\n
3rd Floor \u2013 2020 Portage Avenue
\nWinnipeg, MB R3J 0K4<\/p>\n
Phone: 866-985-9780 \u2022 Fax: 866-985-9799
\nE-mail: info@kelman.ca \u2022 Web: www.kelman.ca<\/p>\n
Design\/Layout: Theresa Kurjewicz
\nAdvertising Manager: Kris Fillion<\/p>\n
Advertising Co-ordinator: Lauren Campbell<\/p>\n
Publication Mails Agreement #40008249.
\nReturn undeliverable Canadian addresses to: Appraisal Institute of Canada,
\n403-200 Catherine St., Ottawa, ON K2P 2K9. Email: info@aicanada.ca <\/p>\n
Published by the
\nVolume 53, book 4, 2009<\/p>\n
Contents<\/p>\n
Do your part for the environment \u2013 reuse and recycle.<\/p>\n
27 Appeal hearing Standard
\nof Review<\/p>\n
28 Streamlining the adjudication
\nhearing process<\/p>\n
29 Knowing
\nwhen to
\nsay NO<\/p>\n
30 How to
\nsuccessfully
\ncomplete
\nthe applied
\nexperience
\nwritten
\nexamination<\/p>\n
32 Spotlight on Continuing
\nProfessional Development<\/p>\n
34 Designations\/Candidates\/
\nStudents<\/p>\n
35 News<\/p>\n
39 The art of
\nappraising
\nin a
\nrecession<\/p>\n
42 Do
\nrestrictions on renting
\nincrease condominium
\nvalues?<\/p>\n
46 Calendar of Events<\/p>\n
46 Advertiser Information Centre <\/p>\n
Airdrie, AB
\nCalgary, AB
\nEdmonton, AB
\nLethbridge, AB
\nMedicine Hat, AB
\nOkotoks, AB
\nRed Deer, ABRed Deer, AB
\nSherwood Park, AB
\nSt. Albert, AB
\nAbbottsford, AB
\nBurnaby, BC
\nChilliwack, BC
\nCoquitlam, BC
\nDelta, BCDelta, BC
\nLangley, BC
\nMaple Ridge, BC
\nMission, BC
\nNew Westminster, BC
\nPitt Meadows, BC
\nRichmond, BC
\nVancouver, BCVancouver, BC
\nVictoria, BC
\nWhite Rock, BC
\nFredericton, NB
\nMoncton, NB
\nSaint John, NB
\nSt. John\u2019s, NL
\nHalifax, NSHalifax, NS
\nAjax, ON
\nMarkham, ON
\nMississauga, ON<\/p>\n
Oshawa, ON
\nOttawa, ON
\nCharlottetown, PEI
\nLaval, PQLaval, PQ
\nLongueuil, PQ
\nMontreal, PQ
\nQuebec City, PQ
\nEstevan, SK
\nMoosejaw, SK
\nRegina, SK
\nSaskatoon, SKSaskatoon, SK
\nSwift Current, SK
\nWeyburn, SK
\nYorkton, SK<\/p>\n
A BOUND CORPORATION
\nCommercial and Residential Appraisals, Real Estate Sales,
\nLand Surveying, Geographic Information Systems
\n1-888-6 A BOUND (1-888-622-6863)<\/p>\n
View the world from an
\n entirely new perspective<\/p>\n
AerialGIS.com<\/p>\n
Aerial photography
\n\u00a9 Pictometry (MDA Geospatial Services Inc.)<\/p>\n
View from the east<\/p>\n
View from the north<\/p>\n
View from above<\/p>\n
View from the south showing
\nsample of measurement tools<\/p>\n
Height = 93m
\nDistance = 80m<\/p>\n
multiple angles. Handy measurement tools help
\nmeasure large or difficult to measure buildings.<\/p>\n
AerialGIS.com is your source for high-resolution, low-cost aerial
\nphotography of most major cities across Canada, captured from<\/p>\n
Parliament Buildings – View from the west<\/p>\n
For an Outstanding Appraisal Report!<\/p>\n
Aerial Photography with
\n an entirely new perspective<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada6<\/p>\n
Sheila Young
\nAACI, P. App., AIC President<\/p>\n
The appraiser as referee<\/p>\n
6<\/p>\n
President\u2019s message<\/p>\n
hen we think about sports, we
\nfocus on the athletes and their
\nteams. But, there is another <\/p>\n
person on the field \u2013 the referee. The referee\u2019s
\ncontribution to the sport is often not given the
\nrecognition it deserves. The attributes of a referee
\nare many. The ref is a lover of the sport who
\nknows the rules of the game backwards and
\nforwards. He has the ability to apply the rules
\nobjectively and skillfully. The referee is judge,
\njury, mediator and diplomat with the fitness,
\npersonality and skills to officiate at the highest
\nlevels of the game.<\/p>\n
Appraisers are the referees of the real prop-
\nerty world; unseen until a \u2018wrong\u2019 call is made,
\noccasionally harassed and abused. However,
\nall the participants agree that the referee\u2019s
\nunbiased and objective opinion is needed for
\nthe game to proceed. <\/p>\n
Do referees change the world?
\nPerhaps you think that referees do not change
\nthe world that they observe and enforce; think
\nagain. The goal and success of referee associa-
\ntions, particularly in minor league sports, is to
\nmake the game safer for the participants, while
\nencouraging the excitement and accomplish-
\nments that come with playing sports. Referee
\nassociations lobby governing bodies to change
\nthe rules to make it safer and more fun!<\/p>\n
AIC lobbies government and regulatory
\nbodies to ensure that the real property game is
\nsafe for participants. It is often helpful for us to
\nthink back to when AIC was created. During the
\nDepression in the 1930s, there were a number <\/p>\n
of foreclosures, particularly on the prairies. AIC
\nensured that valuation standards were met in
\ndifficult times. Through time, in Canada, the US
\nand most of the major industrialized countries of
\nthe world, valuation standards have been created
\nand maintained. These standards have not yet
\nreached the emerging economies or the Third
\nWorld countries. AIC\u2019s participation in the IvSC is
\nbringing valuation standards and ethics to these
\ncounties and, in this sense, we are changing the
\nworld right now.<\/p>\n
Do referees protect the participants?
\nAs appraisers, our individual and collective goal is
\nto protect the public. Appraisers do this by being
\nimpartial, unbiased observers of the market, and by
\nstating opinions on real property that are grounded
\nin facts. Understandably, we want current and future
\nproperty owners to enjoy the excitement and financial
\nbenefits of owning real property, and it can be dif-
\nficult to make the tough calls. We have the necessary <\/p>\n
skills to communicate those tough calls, as we are
\nable to explain our analyses and opinions in plain
\nlanguage. Always remember that, as an appraiser, you
\nare providing a valuable service to the public. <\/p>\n
Do you have control of your arena?
\nJust as the referee can eject an unruly hockey
\nparent from the arena, we have control of
\nour arena through our scope of practice. In a
\nrecession, it is difficult to remember that we do
\nnot have to work with all the potential clients
\nwho call. Some clients are more trouble than
\nthey are worth. Even when we think that there
\nare external forces manipulating our work, we
\nstill have control over the fees that we charge.
\nAs appraisers, we provide unbiased and
\nimpartial opinions just like a referee. Referees
\ndevelop their specialties and find their niches,
\njust as we do. Even in tough times, referees
\nare professionals. To the public and clients,
\nthey speak well of their peers, just as we
\nspeak well of ours. <\/p>\n
Speaking well of peers to the public and cli-
\nents is one way in which we market the profes-
\nsion and ourselves. AIC markets and lobbies for
\nall appraisers; each of us markets and lobbies
\nfor ourselves. Tools and resources are avail-
\nable on the web site and from provincial and
\nnational offices to help you market your niche.
\nPlease remember that professionalism is about
\nproviding excellent work products, maintaining
\nhigh standards, and projecting those values
\nin all that we do. When you are watching the
\ngame, give a thought to the referee, he or she is
\none of us. <\/p>\n
W<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 7<\/p>\n
Sheila Young
\nAACI, P. App., Pr\u00e9sident de l\u2019ICE<\/p>\n
message du Pr\u00e9sident<\/p>\n
l\u2019\u00e9valuateur comme arbitre<\/p>\n
orsque l\u2019on pense aux sports, on pense
\nprincipalement aux athl\u00e8tes et \u00e0 leurs
\n\u00e9quipes. Mais il y a une autre personne <\/p>\n
qui joue un r\u00f4le important, l\u2019arbitre. La contribution
\nde l\u2019arbitre au sport ne re\u00e7oit souvent pas la recon-
\nnaissance qu\u2019elle m\u00e9rite. Les qualit\u00e9s d\u2019un arbitre
\nsont nombreuses. Il aime le sport et poss\u00e8de une
\nconnaissance approfondie des r\u00e8gles du jeu. Il en
\napplique les r\u00e8gles de fa\u00e7on objective et adroite. Il
\nest \u00e0 la fois juge, jury, m\u00e9diateur et diplomate et
\nposs\u00e8de aussi la condition physique, la personnalit\u00e9
\net la comp\u00e9tence pour agir comme officiel au plus
\nhaut niveau.<\/p>\n
Les \u00e9valuateurs sont en quelque sorte les
\narbitres du monde de l\u2019immobilier. On ne les voit
\npas \u00e0 moins qu\u2019une erreur ne soit commise, et ils
\nsont \u00e0 l\u2019occasion victimes d\u2019abus et de harc\u00e8le-
\nment. Toutefois, tous les participants conviennent
\nque l\u2019opinion partielle et objective de l\u2019arbitre est
\nn\u00e9cessaire \u00e0 la bonne marche du jeu. <\/p>\n
Les arbitres sont-ils en
\nmesure de changer le monde?
\nPeut-\u00eatre croyez-vous que les arbitres ne chan-
\ngent pas le monde qu\u2019ils observant et dans lequel
\nils \u00e9voluent. Si tel est le cas, vous devriez revoir
\nvotre position. Le but et le succ\u00e8s des associations
\nd\u2019arbitres, surtout dans les ligues mineures, est
\nde rendre le jeu plus s\u00e9curitaire pour les partici-
\npants tout en encourageant le dynamisme et les
\nr\u00e9alisations associ\u00e9es \u00e0 la pratique d\u2019un sport. Les
\nassociations d\u2019arbitres exercent des pressions sur
\nles organismes de r\u00e9gie pour faire modifier les
\nr\u00e8gles de sorte que le jeu devienne plus s\u00e9curi-
\ntaire et plus plaisant!<\/p>\n
L\u2019ICE exerce des pressions aupr\u00e8s du gouver-
\nnement et des organismes de r\u00e9gie afin d\u2019assurer
\nque le jeu de l\u2019immobilier soit s\u00e9curitaire pour ceux
\nqui y participent. Il est souvent utile pour nous
\nde r\u00e9fl\u00e9chir \u00e0 l\u2019\u00e9poque o\u00f9 l\u2019ICE fut cr\u00e9\u00e9. Durant la
\nGrande Crise des ann\u00e9es \u201930, il y a eu de nombreu-
\nses forclusions, en particulier dans les Prairies. L\u2019ICE
\na veill\u00e9 \u00e0 ce que les normes d\u2019\u00e9valuation soient
\nrespect\u00e9es en ces temps difficiles. Avec le temps,
\ndes normes r\u00e9gissant l\u2019\u00e9valuation ont \u00e9t\u00e9 \u00e9labor\u00e9es
\net maintenues au Canada, aux \u00c9tats-Unis et dans la
\nplupart des principaux pays industrialis\u00e9s de par le
\nmonde. Ces normes n\u2019ont pas encore \u00e9t\u00e9 adopt\u00e9es
\npar les \u00e9conomies \u00e9mergentes ou les pays du tiers
\nmonde. La participation de l\u2019ICE aupr\u00e8s du Conseil
\nsur les normes internationales d\u2019\u00e9valuation contri-
\nbue \u00e0 l\u2019application de ces normes et de l\u2019\u00e9thique
\ncorrespondante dans ces pays et, en ce sens, nous
\ncontribuons actuellement \u00e0 changer le monde. <\/p>\n
Les arbitres prot\u00e8gent-ils les participants?
\nComme \u00e9valuateurs, notre but individuel et
\ncollectif est de prot\u00e9ger le public. Pour ce faire,
\nles \u00e9valuateurs agissent comme observateurs
\nimpartiaux du march\u00e9 et formulent des opinions
\nfond\u00e9es sur les faits. Il est facile de comprendre
\nque nous voulions que les propri\u00e9taires actuels et
\nfuturs appr\u00e9cient la joie et les avantages financiers
\nd\u2019appartenir une propri\u00e9t\u00e9 et il peut parfois \u00eatre
\nemb\u00eatant de prendre les d\u00e9cisions difficiles. Nous
\navons les comp\u00e9tences requises pour transmettre
\nces d\u00e9cisions difficiles et d\u2019expliquer nos analyses
\net opinions de fa\u00e7on simple et pr\u00e9cise. Nous devons
\ntoujours nous rappeler qu\u2019\u00e0 titre d\u2019\u00e9valuateurs,
\nnous offrons au public un service de grande valeur. <\/p>\n
Avez-vous le contr\u00f4le de votre ar\u00e9na?
\nTout comme un arbitre peut demander \u00e0 un
\nparent d\u2019un jeune hockeyeur de quitter l\u2019ar\u00e9na,
\nnous avons le contr\u00f4le de notre milieu dans les
\nlimites de la port\u00e9e de notre pratique. En p\u00e9riode
\nde r\u00e9cession, il est difficile de nous rappeler qu\u2019il
\nn\u2019est pas n\u00e9cessaire de travailler avec tous les
\nclients qui nous appellent. Certains clients sont
\nprobl\u00e9matiques et il ne vaut pas la peine de s\u2019en
\noccuper. M\u00eame lorsque l\u2019on pense que des forces
\nexternes influencent notre travail, nous avons
\ntoujours le contr\u00f4le de nos honoraires. Comme
\n\u00e9valuateurs, nous formulons des opinions impar-
\ntiales comme le fait un arbitre. Les arbitres
\nd\u00e9veloppent leurs sp\u00e9cialit\u00e9s et trouvent
\nleurs cr\u00e9neaux comme nous, et m\u00eame dans
\nles temps les plus difficiles, les arbitres sont
\ndes professionnels. Devant le public et leurs
\nclients, ils parlent en bien de leurs coll\u00e8gues,
\nexactement comme nous le faisons. <\/p>\n
Le fait de parler en bien de nos coll\u00e8gues
\ndevant le public et les clients est une fa\u00e7on de
\ncommercialiser la profession et nos services.
\nL\u2019ICE fait le marketing et d\u00e9fend les int\u00e9r\u00eats de
\ntous les \u00e9valuateurs et nous faisons de m\u00eame
\nindividuellement. Des outils et des ressour-
\nces sont disponibles sur le site Web et des
\nbureaux provinciaux et nationaux pour vous
\naider avec le marketing de vos sp\u00e9cialit\u00e9s.
\nRappelez-vous que le professionnalisme a trait
\n\u00e0 l\u2019excellence de votre travail, au maintien de
\nnormes \u00e9lev\u00e9es et au reflet de ces valeurs dans
\ntout ce que nous faisons. Enfin, la prochaine
\nfois que vous regarderez une \u00e9mission sportive,
\npensez \u00e0 l\u2019arbitre. Il est comme nous. <\/p>\n
L<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada8<\/p>\n
Georges Lozano, MPA
\nAIC Chief Executive Officer<\/p>\n
Building a winning team<\/p>\n
CEO RePoRT<\/p>\n
The strength of an organization is derived not only from the individual skills and knowledge of its employees,
\nbut also from how well they work together as
\na team. Today, more than ever, a strong multi-
\ndisciplinary team is essential in order to capitalize
\non the many different kinds of opportunities that
\nthere are to provide real property appraisal and
\nrelated consulting services.<\/p>\n
These range from complex residential and
\nICI appraisal assignments that originate within
\nthe private sector to a myriad of real property
\nconsulting contracts tendered by private, and
\npublic sector organizations including portfolio
\nanalysis, highest and best use studies, and the
\nemerging area of valuation for financial reporting,
\nto name but three. <\/p>\n
Teams can be built using existing in-house
\nresources, by developing the talent of your employ-
\nees, and by building alliances with other profes-
\nsionals. Strong winning teams can be built through
\na combination of all of these approaches. In order
\nto do so, organizations should begin by embracing
\na team spirit and fostering a culture that will lead
\nto the development of teamwork on a daily basis.<\/p>\n
A strong team is one that has a clear
\nunderstanding of corporate objectives and trust
\nin the collective strength that working together
\nbrings. Multi-disciplinary teams recognize
\nindividual strengths and specialty areas of
\nknowledge and they know how to draw these
\nattributes from team members to produce a
\ncollective output that is much stronger than the
\nsum of its parts.<\/p>\n
The team culture embodies a number of
\nfeatures that include sharing information, <\/p>\n
encouraging input from all team members, and
\nadopting a continuous learning philosophy that
\nrewards the achievement of new skills and com-
\npetencies. Information sharing can take many
\nforms, including the development of accessible
\ndata management systems that make it easy for
\nteam members to learn from the experience of
\nothers, and to stay abreast of new and emerging
\npractices and technologies in their area of exper-
\ntise. Electronic forums, chat rooms and other
\nsocial media tools are now available to allow for
\nthe exchange of information on a professional
\nand technical basis. This is particularly helpful
\nwhen team members are not located in the same
\npremise. Inclusivity is an important element of
\nall winning teams. No one gets left out. Post-
\nmortems and debriefing sessions are very helpful
\nin reviewing ongoing work completed projects
\nand addressing both successes and shortcomings <\/p>\n
in the execution of the work. The important thing
\nis that all members of the team are involved in
\na continuous improvement cycle and everyone
\ncomes out stronger in the end.<\/p>\n
Continuous learning is achieved in a variety of
\nways. Organizations that are team-focused make
\navailable a wide range of resources to help team
\nmembers improve and expand their skill sets.
\nIn-house training is one way to ensure that team
\nmembers are uniformly qualified and abreast of
\nthe methods, approaches, and techniques used by
\nthe organization. The team-focused organization
\ninvests in its team members by supporting exter-
\nnal training as well. This might involve bringing in
\npertinent experts to address the team and provide
\nthem with new insights. It also includes providing
\nfinancial support and other incentives to encourage
\nteam members to enroll in educational programs
\nto enhance their competence and qualifications.<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 9<\/p>\n
Winning teams are innovative. They seek out
\nnew ideas from within and encourage all team
\nmembers to participate actively in the formulation of
\nsolutions to problems. This means setting time aside
\nto have open discussions not only about projects,
\nbut also about the management of the organization,
\nwith the aim of identifying effective ways to meet
\nchallenges and achieve stated objectives.<\/p>\n
Success oriented organizations are in for
\nthe long run. Similarly, winning teams have a
\nlong-term view, which includes investing in the
\nmembers of the team and striving to continu-
\nously improve performance over time. In this
\nrespect, senior team members are mindful of the
\nfuture needs of the organization and look out for
\nyoung talent to bring into the team and develop.
\nTeam oriented managers take their mentoring
\nroles very seriously, because they know that
\ntraining tomorrow\u2019s professionals is essential to
\nthe long-term success of the organization. <\/p>\n
This is particularly important in the appraisal
\nprofession. Currently, the Institute is facing a
\nsignificant shortage of qualified mentors to meet
\nthe needs of its Candidate members. Remember
\nthat there is a clear distinction between co-
\nsigning a report and mentoring a Candidate. The
\ndesignated members of the Institute who co-sign
\nCandidate reports should ideally be the mentors
\nas well. However, this is not always the case and,
\nwhile designated members have an obligation to
\nprovide appropriate oversight of Candidate work
\nwhen co-signing reports, this still falls short of
\nproviding the support and advice of a mentor.<\/p>\n
The mentoring process should be rewarding
\nfor both the mentor and the Candidate. A good
\nmentoring experience should provide all concerned <\/p>\n
with fresh insight into the profession and what
\nconstitutes best practices. Mentors strive to provide
\ntheir mentees with a rich experience involving
\njob rotation in order for them to gain a better
\nappreciation of different areas of valuation work.
\nFurther, increasing levels of responsibility should
\nbe assigned to the Candidates as they progress
\nthrough the AIC\u2019s Applied Experience Program. <\/p>\n
A good mentor program should be based on
\nhonest discussion between the mentor and the
\nmentee, in which constructive criticism is encour-
\naged on both sides. Finally, the team oriented
\nmentor will work with the Candidates to help
\nthem identify a career path and work towards its
\nachievement. In the process, loyalty is built and
\nthis can serve the organization well in the long
\nrun with a stable and supportive team.<\/p>\n
Beyond building strong teams, the mentor-
\ning of Candidates will also help to build a strong
\nfuture for the profession. Team leaders should
\nappreciate the need and the importance of help-<\/p>\n
\u201cA strong team is
\none that has a clear <\/p>\n
understanding of
\ncorporate objectives <\/p>\n
and trust in the
\ncollective strength <\/p>\n
that working together
\nbrings.\u201d<\/p>\n
ing Candidates achieve their professional designa-
\ntion. More highly qualified team members raise
\nthe productivity of the organization and make it
\npossible to take on more complex and commen-
\nsurately more lucrative assignments.<\/p>\n
While the base of winning teams is built
\nwithin the organization, it is not always possible
\nto harness all of the diverse skills necessary to
\ntackle complex assignments in-house. Therefore,
\nan important facet of team building is the devel-
\nopment of external partnerships that form part of
\nthe extended team. Once again, the development
\nof the expanded team begins with a plan. Organi-
\nzations need to identify their own strengths and
\nweaknesses and establish appropriate partner-
\nships to help them fill any identified skill gaps.
\nThis might mean bringing such professionals as
\nlawyers, engineers, or accountants into the team
\nin order to tackle projects where knowledge from
\nthese professions plays a big part. Large, multi-
\ndisciplinary projects are bid upon by any number
\nof firms including management consulting,
\nengineering and others. These firms often bring in
\nappraisers to provide advice and support to their
\nteams. However, in many cases, the project lead-
\nership should be undertaken by an appraisal firm
\nand designated members of the Institute should
\nbe in charge. The initiative is there and so are the
\nqualifications, but often the only thing missing
\nis the multi-disciplinary team that can handle all
\naspects of the work. <\/p>\n
The time has come for the appraisal profession
\nto take its rightful place at the head of the team
\nand to reap the benefits of leadership. Start team
\nbuilding today for the benefit of your organization
\nand of the profession. <\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada10<\/p>\n
Georges Lozano, MPA
\nChef de la direction<\/p>\n
Mettre sur pied une
\n\u00e9quipe gagnante<\/p>\n
RePoRT du Chef de la direction<\/p>\n
a force d\u2019une organisation r\u00e9side non
\nseulement au niveau des comp\u00e9tences
\net des connaissances individuelles <\/p>\n
de ses employ\u00e9s, mais aussi dans leur fa\u00e7on
\nde travailler en \u00e9quipe. Aujourd\u2019hui plus que
\njamais, une \u00e9quipe multidisciplinaire solide est
\nessentielle pour tirer profit des diff\u00e9rents types de
\npossibilit\u00e9s en mati\u00e8re de prestation de services
\nd\u2019\u00e9valuation immobili\u00e8re et de services d\u2019experts-
\nconseils connexes.<\/p>\n
Ces possibilit\u00e9s comprennent des \u00e9valuations
\nr\u00e9sidentielles complexes et des \u00e9valuations d\u2019ICI
\nprovenant du secteur priv\u00e9, ainsi qu\u2019un \u00e9ventail
\nde contrats en consultation immobili\u00e8re adjug\u00e9s
\npar des organismes des secteurs public et priv\u00e9,
\ny compris des analyses du portefeuille, des
\n\u00e9tudes portant sur l\u2019utilisation optimale et le
\ndomaine \u00e9mergent des \u00e9valuations aux fins de
\nrapports financiers, pour ne nommer que ces
\ntrois \u00e9l\u00e9ments. <\/p>\n
Les \u00e9quipes peuvent \u00eatre cr\u00e9\u00e9es \u00e0 m\u00eame les
\nressources internes existantes, en perfectionnant
\nle talent des employ\u00e9s ou en nouant des allian-
\nces avec d\u2019autres professionnels. Les \u00e9quipes
\ngagnantes solides peuvent \u00eatre form\u00e9es \u00e0 partir
\nd\u2019une combinaison de ces approches. Pour ce
\nfaire, les organisations doivent commencer par
\nadopter un esprit d\u2019\u00e9quipe et promouvoir une
\nculture qui m\u00e8nera \u00e0 l\u2019instauration du travail
\nd\u2019\u00e9quipe quotidiennement. <\/p>\n
Une \u00e9quipe solide poss\u00e8de une compr\u00e9hension
\nclaire des objectifs de l\u2019entreprise et a confiance
\nen la force r\u00e9sultant du travail d\u2019\u00e9quipe. Une
\n\u00e9quipe multidisciplinaire reconna\u00eet les forces et les
\ndomaines de connaissances sp\u00e9cialis\u00e9es individuels
\net sait comment tirer parti des attributs de ses <\/p>\n
membres pour produire un r\u00e9sultat collectif qui est
\nplus grand que la somme de ses parties.<\/p>\n
La culture de l\u2019\u00e9quipe englobe un certain
\nnombre de caract\u00e9ristiques, notamment \u00e9chan-
\nger de l\u2019information, inviter tous les membres
\nde l\u2019\u00e9quipe \u00e0 s\u2019exprimer, et adopter une philo-
\nsophie d\u2019apprentissage continu qui r\u00e9compense
\nl\u2019acquisition de nouvelles comp\u00e9tences. L\u2019\u00e9change
\nd\u2019information peut prendre plusieurs formes,
\ndont la mise sur pied de syst\u00e8mes de gestion
\nde donn\u00e9es accessibles qui aident les membres
\nde l\u2019\u00e9quipe \u00e0 apprendre des exp\u00e9riences des
\nautres et leur permettent de se tenir au courant
\ndes pratiques et des technologies \u00e9mergentes
\net nouvelles dans leur domaine d\u2019expertise. Des
\nforums \u00e9lectroniques, des clavardoirs et d\u2019autres
\noutils de m\u00e9dias sociaux sont maintenant mis \u00e0
\nleur disposition afin qu\u2019ils \u00e9changent de l\u2019infor-
\nmation de fa\u00e7on professionnelle et technique.
\nCeux-ci s\u2019av\u00e8rent particuli\u00e8rement utiles lorsque
\nles membres de l\u2019\u00e9quipe ne se trouvent pas au
\nm\u00eame endroit. L\u2019inclusivit\u00e9 constitue un \u00e9l\u00e9ment
\nimportant de toutes les \u00e9quipes gagnantes.
\nPersonne n\u2019est exclu. Les bilans et les r\u00e9unions
\nd\u2019information sont tr\u00e8s utiles pour examiner
\nles travaux en cours et les projets compl\u00e9t\u00e9s et
\naborder les r\u00e9ussites et les points faibles relatifs \u00e0
\nl\u2019ex\u00e9cution des travaux. Il est important que tous
\nles membres de l\u2019\u00e9quipe participent \u00e0 un cycle
\nd\u2019am\u00e9lioration continue et que tout le monde en
\nressorte gagnant.<\/p>\n
L\u2019apprentissage continu peut s\u2019effectuer de
\ndiff\u00e9rentes fa\u00e7ons. Les organisations ax\u00e9es sur
\nl\u2019\u00e9quipe mettent \u00e0 la disposition des membres
\nde celle-ci un large \u00e9ventail de ressources afin
\nde les aider \u00e0 perfectionner et \u00e0 \u00e9largir leurs <\/p>\n
comp\u00e9tences. La formation interne constitue une
\nfa\u00e7on de s\u2019assurer que les membres de l\u2019\u00e9quipe
\nsont qualifi\u00e9s uniform\u00e9ment et qu\u2019ils sont au
\ncourant des m\u00e9thodes, approches et techniques
\nutilis\u00e9es par l\u2019organisation. L\u2019organisation ax\u00e9e
\nsur l\u2019\u00e9quipe investit dans les membres de l\u2019\u00e9quipe
\nen appuyant aussi la formation externe. Par
\nexemple, on peut inviter des sp\u00e9cialistes perti-
\nnents qui s\u2019adresseront aux membres de l\u2019\u00e9quipe
\net leur fourniront de nouvelles connaissances. Cet
\nappui comprend \u00e9galement l\u2019offre d\u2019un soutien
\nfinancier et d\u2019autres mesures incitatives pour
\nencourager les membres de l\u2019\u00e9quipe \u00e0 s\u2019inscrire \u00e0
\ndes programmes \u00e9ducatifs afin d\u2019am\u00e9liorer leurs
\ncomp\u00e9tences et leurs qualifications.<\/p>\n
Les \u00e9quipes gagnantes sont innovatrices. Elles
\nrecherchent de nouvelles id\u00e9es aupr\u00e8s de leurs
\nmembres et elles incitent tous les membres \u00e0
\nparticiper activement \u00e0 l\u2019\u00e9laboration de solutions
\naux probl\u00e8mes. Cela signifie pr\u00e9voir du temps <\/p>\n
L<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 11<\/p>\n
pour avoir des d\u00e9bats libres non seulement au
\nsujet des projets, mais aussi au sujet de la gestion
\nde l\u2019organisation dans le but de cerner des fa\u00e7ons
\nefficaces de relever les d\u00e9fis et de r\u00e9aliser les
\nobjectifs \u00e9nonc\u00e9s.<\/p>\n
Les organisations qui visent la r\u00e9ussite font
\ndes pr\u00e9visions \u00e0 long terme. Dans le m\u00eame ordre
\nd\u2019id\u00e9es, les \u00e9quipes gagnantes poss\u00e8dent une
\nvision \u00e0 long terme qui comprend des activit\u00e9s
\ncomme investir dans les membres de l\u2019\u00e9quipe et
\ns\u2019efforcer d\u2019am\u00e9liorer continuellement le rende-
\nment au fil du temps. \u00c0 cet \u00e9gard, les principaux
\nmembres de l\u2019\u00e9quipe sont conscients des futurs
\nbesoins de l\u2019organisation et recherchent de jeunes
\ntalents \u00e0 int\u00e9grer \u00e0 l\u2019\u00e9quipe et \u00e0 perfectionner. Les
\ngestionnaires ax\u00e9s sur l\u2019\u00e9quipe prennent leur r\u00f4le
\nde mentor tr\u00e8s au s\u00e9rieux parce qu\u2019ils savent que
\nformer les professionnels de demain est essentiel \u00e0
\nla r\u00e9ussite \u00e0 long terme de l\u2019organisation. <\/p>\n
Cela est particuli\u00e8rement important dans le
\ndomaine de la profession d\u2019\u00e9valuateur. \u00c0 l\u2019heure
\nactuelle, l\u2019Institut est confront\u00e9 \u00e0 une importante
\np\u00e9nurie de mentors qualifi\u00e9s en r\u00e9ponse aux
\nbesoins de ses membres stagiaires. Souvenez-
\nvous qu\u2019il existe une distinction claire entre la
\ncosignature d\u2019un rapport et le mentorat d\u2019un
\nstagiaire. Les membres agr\u00e9\u00e9s de l\u2019Institut qui
\ncosignent les rapports des stagiaires devraient
\nid\u00e9alement leur servir \u00e9galement de mentors.
\nCependant, cela n\u2019est pas toujours le cas et bien
\nque les membres agr\u00e9\u00e9s aient l\u2019obligation de
\nsuperviser les travaux des stagiaires lorsqu\u2019ils
\nsignent les rapports, ils n\u2019offrent pas l\u2019appui et les
\nconseils d\u2019un mentor.<\/p>\n
Le processus de mentorat devrait \u00eatre enri-
\nchissant \u00e0 la fois pour le mentor et le stagiaire.
\nUne bonne exp\u00e9rience de mentorat devrait
\nfournir \u00e0 toutes les personnes concern\u00e9es de
\nnouvelles perspectives sur la profession et sur
\nce qui constitue les pratiques exemplaires. Les
\nmentors s\u2019efforcent d\u2019offrir \u00e0 leur sujet une riche <\/p>\n
exp\u00e9rience comprenant une rotation d\u2019emplois
\nafin qu\u2019ils comprennent mieux les diff\u00e9rents
\ndomaines de l\u2019\u00e9valuation. De plus, des niveaux de
\nresponsabilit\u00e9 croissants devraient \u00eatre attribu\u00e9s
\naux stagiaires au fur et \u00e0 mesure qu\u2019ils font des
\nprogr\u00e8s dans le cadre du Programme d\u2019exp\u00e9-
\nrience appliqu\u00e9e de l\u2019ICE. <\/p>\n
Un bon programme de mentorat devrait
\n\u00eatre fond\u00e9 sur des discussions honn\u00eates entre
\nle mentor et le sujet au cours desquelles on
\nincite les deux parties \u00e0 formuler des critiques
\nconstructives. Finalement, le mentor ax\u00e9 sur
\nl\u2019\u00e9quipe travaillera avec les stagiaires afin de les
\naider \u00e0 d\u00e9terminer leur cheminement de carri\u00e8re
\net \u00e0 travailler en vue de le r\u00e9aliser. Au cours du
\nprocessus, la loyaut\u00e9 se manifeste et elle peut
\nbien servir l\u2019organisation \u00e0 long terme gr\u00e2ce \u00e0
\nune \u00e9quipe stable qui la soutient.<\/p>\n
Au-del\u00e0 de la mise sur pied d\u2019\u00e9quipes
\nsolides, le mentorat des stagiaires permettra
\n\u00e9galement d\u2019\u00e9difier un avenir prosp\u00e8re pour
\nla profession. Les dirigeants d\u2019\u00e9quipe recon-
\nnaissent la n\u00e9cessit\u00e9 et l\u2019importance d\u2019aider
\nles stagiaires \u00e0 obtenir leur titre professionnel.
\nLes membres hautement qualifi\u00e9s de l\u2019\u00e9quipe
\ncontribuent \u00e0 accro\u00eetre la productivit\u00e9 de
\nl\u2019organisation et permettent d\u2019entreprendre des <\/p>\n
travaux plus complexes et, en cons\u00e9quence,
\nplus lucratifs.<\/p>\n
Bien que la base des \u00e9quipes gagnantes soit
\nform\u00e9e au sein de l\u2019organisation, il n\u2019est pas
\ntoujours possible de tirer profit des diverses
\ncomp\u00e9tences n\u00e9cessaires pour entrepren-
\ndre des travaux complexes \u00e0 l\u2019interne. Par
\ncons\u00e9quent, l\u2019\u00e9tablissement de partenariats
\nexternes faisant partie de l\u2019\u00e9quipe \u00e9largie
\nconstitue un aspect important de la mise sur
\npied d\u2019une \u00e9quipe. Encore une fois, la cr\u00e9ation
\nd\u2019une \u00e9quipe \u00e9largie commence par un plan.
\nLes organisations doivent d\u00e9terminer leurs
\npropres forces et faiblesses et nouer des par-
\ntenariats appropri\u00e9s qui les aideront \u00e0 combler
\ntout \u00e9cart cern\u00e9 au niveau des comp\u00e9tences.
\nCela peut signifier int\u00e9grer des professionnels
\ncomme des avocats, des ing\u00e9nieurs ou des
\ncomptables \u00e0 l\u2019\u00e9quipe afin d\u2019entreprendre des
\nprojets au cours desquels les connaissances
\nde ces professionnels jouent un grand r\u00f4le. Un
\ngrand nombre d\u2019entreprises, dont des soci\u00e9-
\nt\u00e9s de consultation en gestion, des soci\u00e9t\u00e9s
\nd\u2019ing\u00e9nierie, etc., soumissionnent sur les grands
\nprojets multidisciplinaires. Ces entreprises font
\nsouvent appel \u00e0 des \u00e9valuateurs afin qu\u2019ils
\nprodiguent des conseils et qu\u2019ils appuient
\nleurs \u00e9quipes. Toutefois, dans plusieurs cas, la
\ndirection du projet devrait \u00eatre confi\u00e9e \u00e0 une
\nsoci\u00e9t\u00e9 d\u2019\u00e9valuation et des membres agr\u00e9\u00e9s de
\nl\u2019Institut devraient en assumer la responsabilit\u00e9.
\nL\u2019initiative est l\u00e0, ainsi que les qualifications,
\nmais, souvent, tout ce qui manque, c\u2019est une
\n\u00e9quipe multidisciplinaire qui peut s\u2019occuper de
\ntous les aspects du projet. <\/p>\n
Le temps est venu pour la profession d\u2019\u00e9va-
\nluateur de prendre la place qui lui revient \u00e0 la
\nt\u00eate de l\u2019\u00e9quipe et de r\u00e9colter les avantages li\u00e9s
\nau leadership. Commencez \u00e0 mettre une \u00e9quipe
\nsur pied d\u00e8s aujourd\u2019hui au b\u00e9n\u00e9fice de votre
\norganisation et de la profession. <\/p>\n
\u00ab Une \u00e9quipe
\nsolide poss\u00e8de une <\/p>\n
compr\u00e9hension
\nclaire des objectifs
\nde l\u2019entreprise et a <\/p>\n
confiance en la force
\nr\u00e9sultant du travail <\/p>\n
d\u2019\u00e9quipe. \u00bb<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada12<\/p>\n
2010 Annual Conference<\/p>\n
The Appraisal Institute of Canada and AIC – British Columbia victoria
\nChapter are very pleased and proud to be hosting the 2010 Annual
\nConference in victoria, British Columbia. Join Co-Chairs Leonard
\nSherwood, AACI and Gordon Cavanaugh, CRA
\nand the Organizing Committee members in June 2010 for the Annual
\nConference being held at the Fairmont Empress Hotel & Convention Centre.
\nThe 2010 conference presents delegates with the opportunity to engage in
\nstimulating professional development programs in a spectacular setting.
\nThe Organizing Committee has developed an educational program around
\nthe theme of Green and Global in the Garden City.
\nA diverse range of panelists and speakers will offer AIC members valuable
\nand practical advice to assist them in capitalizing on trends that will
\ninfluence the future. <\/p>\n
Join keynote speaker Guy Dauncey as he shares
\nhis positive vision of a sustainable future and how we can translate that
\nvision into action. For years now, through his books, as a consultant
\nand in his lectures from America to Africa to China, Dauncey has
\ndedicated his life\u2019s work to \u201cencouraging greater sustainability and hope
\nfor our future.\u201d In his presentation, Dauncey will look at solutions that
\nretain the quality of our civilization and our livelihood. He is founder and
\npresident of the BC Sustainable Energy Association and a consultant
\nspecializing in green building, sustainable energy and sustainable com-
\nmunity development. He is also the author of several books including
\nAfter the Crash: The Emergence of the Rainbow Economy, which was an
\nObserver Green Book of the Year, and Stormy Weather: 101 Solutions to
\nGlobal Climate Change. <\/p>\n
The interesting and varied slate of speakers will offer presentations and
\npanel discussions aimed at enhancing your skills and providing you with
\ntools to succeed beyond 2010. For more information, go the AIC conference
\nweb site at: http:\/\/aic2010.aicanada.ca.<\/p>\n
The committee has planned a fascinating networking evening at the
\nSticky Wicket Pub, where delegates will be introduced to local foods, culture
\nand talent. The evening promises to be filled with good music, hearty
\nlaughter and great networking opportunities.<\/p>\n
Come to victoria next spring. We will examine and debate achievable
\nsolutions to these pressing global issues, take a walk together along the
\nCauseway, and watch the sunset that has a redder tinge now than a century
\nago. These concerns are not trivial. They are critical. They are now!<\/p>\n
For a two-year trial period, AIC is offering a special conference fee for
\nCandidates and Students, in order to increase the participation of these
\ntwo member groups. The discounted registration fee is $400.00 [excluding
\ntaxes]. This registration fee will be available for a maximum of 100
\nCandidates and Students per conference on a first come, first served basis.<\/p>\n
\t \u2022\tOnline\tregistration\topen\tFebruary\t28,\t2010
\n\t \u2022\tOnline\tregistration\tcloses\tMay\t15,\t2010.
\nMark the dates on your calendar. Book your hotel room now by visiting:
\nhttp:\/\/www.aicanada.ca\/cmsPage.aspx?id=230 or call the hotel at:
\n1-800-441-1414.<\/p>\n
visit the conference web site at: http:\/\/aic2010.aicanada.ca.
\nFor further information, please contact AIC\u2019s Conference and Meeting
\nPlanner, Marie-Louise Doyle at maried@aicanada.ca <\/p>\n
OF THE APPRAISAL
\n INSTITUTE OF CANADA<\/p>\n
Victoria, British Columbia,
\nFairmont Empress Hotel <\/p>\n
June 2-5, 2010<\/p>\n
Registration Fees
\n(excl. taxes)<\/p>\n
Until
\nMay 3<\/p>\n
May 4 –
\nMay 15<\/p>\n
After
\nMay 15*<\/p>\n
Full conference $650.00 $750.00 $850.00
\nFull companion\/retiree $300.00 $325.00 $350.00
\nCandidate\/Student $400.00 $400.00 $400.00
\nDaily rate (per day) $300.00 $350.00 $400.00<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 13<\/p>\n
2010 Annual Conference<\/p>\n
Agenda
\n1. To confirm the Minutes of the May 30, 2009 AGM.
\n2. To receive Reports
\n a) President
\n b) Management
\n c) AIC Committee Reports
\n3. To receive audited financial statements for the past year and appoint <\/p>\n
auditors for the forthcoming year.
\n4. To elect the Board of Directors of the Appraisal Institute of Canada.
\n5.\tTo\tconsider\tAIC\tBy-law\trevisions\tas\tpresented\u00a0by\tthe\tBoard\tof\tDirectors.
\n6. To consider resolutions submitted in accordance with the By-laws.
\n7.\u00a0\tTo\tconsider\tall\tother\tbusiness\tas\tmay\tproperly\tcome\tbefore\tthe\tmeeting.<\/p>\n
\u00a0
\nNote: Designated members have the right to vote by proxy. <\/p>\n
NOTICE OF ANNUAL
\nGENERAL MEETING<\/p>\n
The Fairmont Empress Hotel <\/p>\n
Victoria, British Columbia<\/p>\n
Friday, June 4, 2010 \u2013 15:15 <\/p>\n
H\u00f4tel Fairmont Empress <\/p>\n
Victoria, Colombie-Britannique<\/p>\n
Vendredi le 4 juin 2010 \u2013 15 h 15<\/p>\n
AVIS D\u2019ASSEMBL\u00c9E
\nG\u00c9N\u00c9RALE ANNUELLE<\/p>\n
Ordre du jour
\n1. Approbation du proc\u00e8s-verbal de l\u2019AGA du 30 mai 2009.
\n2. Pr\u00e9sentation des rapports
\n a) du Pr\u00e9sident
\n b) de la direction
\n c) des comit\u00e9s de l\u2019ICE
\n3. Pr\u00e9sentation des \u00e9tats financiers v\u00e9rifi\u00e9s du dernier exercice et nomina-<\/p>\n
tion\tdes\tv\u00e9rificateurs\tpour\tle\tprochain\texercice.\u00a0
\n4. \u00c9lection des membres du Conseil d\u2019administration de l\u2019Institut cana-<\/p>\n
dien des \u00e9valuateurs.
\n5.\t\tExamen\tdes\tmodifications\taux\tr\u00e8glements\tde\tl\u2019ICE,\ttelles\tque\tpr\u00e9sen-<\/p>\n
t\u00e9es par le Conseil d\u2019administration national (CAN).
\n6. Examen des r\u00e9solutions pr\u00e9sent\u00e9es conform\u00e9ment aux r\u00e8glements.
\n7\t \u00c9tude\tde\ttous\tles\tautres\tpoints\td\u00fbment\tpr\u00e9sent\u00e9s\t\u00e0\tl\u2019Assembl\u00e9e.\u00a0
\n\u00a0
\nNota : les membres agr\u00e9\u00e9s ont le droit de voter par procuration. <\/p>\n
Appraisal Institute of Canada AGM 2010 Institut canadien des \u00e9valuateurs, AGA 2010 <\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada14<\/p>\n
Brian McDonald:
\nExploring all angles<\/p>\n
Member PRofile<\/p>\n
hen Brian McDonald was extended the golden handshake
\nby his employer of 18 years, he found himself in the
\nposition of considering a new career. \u201cI had always given <\/p>\n
some thought to real estate over the years, but it was not until then that
\nI started looking at it seriously,\u201d says the Oakville resident, who originally
\nhails from Waverley, Nova Scotia. <\/p>\n
He had fond memories of selling residential properties at the
\nbeginning of his work life, but, at 47, with a wife and two children,
\nhe knew a sales career would be too disruptive to family life. His only
\nexposure to valuation involved having their homes appraised as the family
\nmoved from city to city over the years. Yet, that experience had left him
\nwith two important impressions: a commitment to keeping his family in
\nOakville, and a burgeoning interest in the appraisal industry.<\/p>\n
Since starting from scratch was not an option, when McDonald\u2019s
\nresearch revealed that his past education made him eligible for the
\nAppraisal Institute of Canada (AIC) fast track program to becoming an
\nAACI, his interest grew exponentially. \u201cI was pleasantly surprised that I
\ncould earn my accreditation relatively quickly,\u201d he recalls. \u201cThat was very
\nimportant at my age and the point I was at in my life.\u201d<\/p>\n
McDonald graduated with a Bachelor of Commerce Honours degree
\nfrom Dalhousie University in 1983 and completed his Masters of Business
\nAdministration three years later. For two years afterwards, he sold <\/p>\n
residential real estate. Then, in 1988, he joined Sobeys, a large national
\nchain of grocery stores, for which he worked for almost two decades in
\nvarious management positions throughout Nova Scotia and Ontario. <\/p>\n
His last position with the company was in Toronto as the Director of
\nProduce Procurement, Category Management and Quality Control for
\nOntario Operations. At that point, the valuation industry was more foreign
\nto him than some of the exotic vegetables Sobeys stocks in its produce
\naisle. \u201cIt was a mystery to me how the whole process worked,\u201d he recalls.
\n\u201cI did not know any appraisers first hand.\u201d<\/p>\n
It was not long before he changed all that. Shortly after parting
\nways with Sobeys in August 2007, he started researching the profession
\non line. That winter, he signed up with the AIC for all the courses
\nnecessary to become a Candidate (plus one extra course for good
\nmeasure). At the same time, he joined the Ontario Association\u2019s Credit
\nvalley Chapter as a student.<\/p>\n
\u201cI thought these would be good ways to network,\u201d says McDonald.
\nHe was right. Taking the Professional Practice Seminar gave him the <\/p>\n
opportunity to meet with appraisers from various fields. One of those
\nprofessionals was fellow Maritimer Brian varner, AACI, P. App., an appraiser
\nwho started in private practice, but now works for the City of Toronto. The
\ntwo met several times to discuss the opportunities that McDonald might
\nexpect to find in the world of real property valuation.<\/p>\n
W<\/p>\n
\u201cI was pleasantly surprised that I could earn my accreditation relatively quickly.
\nThat was very important at my age and the point I was at in my life.\u201d<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 15<\/p>\n
To further broaden his perspective, McDonald also decided to take
\nan employee from the Altus Group out for lunch. \u201cThat way I found out a
\nlittle about what a large appraisal firm does,\u201d he recalls.<\/p>\n
He then contacted a small residential appraisal firm. Over the winter
\nof 2007, McDonald studied for his courses in the firm\u2019s office so that he
\ncould develop a better understanding of how the work and remuneration
\nof residential appraisers differed from those specializing in commercial or
\nindustrial valuation.<\/p>\n
\u201cI was at a stage in my life where I had already experienced one career,\u201d
\nhe notes. \u201cWe had enough income and savings to support us for a certain
\nperiod of time. However, I still needed to know that my progression in salary
\nfrom a Candidate to full accreditation would maintain my family\u2019s lifestyle.
\nI think it is important to do that analysis beforehand and understand what
\nyou are getting yourself into.\u201d<\/p>\n
All the while, he continued to attend Chapter meetings. As the time
\napproached when he would meet the requirements to become a Candidate
\nmember, McDonald began to let people know that he would soon be
\nlooking for placement as part of the Applied Experience Program. By the
\nend of the coursework, he had received offers from two appraisal firms and
\ndecided to take a salaried position at Robson, McLean & Associates where
\nBob Robson, AACI, P. App., CET, also offered to pay for his courses, insurance
\nand dues.<\/p>\n
\u201cI thought it would be a good place to get some background and
\nexperience on the commercial side, as well as on litigious cases such as
\nexpropriations,\u201d explains McDonald, noting that Robson\u2019s status as an expert
\nwitness piqued his interest even further. \u201cDoing residential appraisals would
\nhave involved an income from a commission split structure, as well as a
\ngreater time commitment. I preferred having more stability, while being able
\nto work and study at the same time.\u201d <\/p>\n
Once he had made a firm decision to continue with the program,
\nMcDonald asked Robson to be his mentor. He then scheduled the required
\ninterview with the association and is working with Robson to complete the
\ncompulsory 800-word essay explaining his plans for fulfilling the Applied
\nExperience Program.<\/p>\n
Initially, McDonald had thought he might ask varner to be his mentor.
\nBut, the arrangement proved to be too complicated. \u201cOne of the challenges
\nwith having a mentor you don\u2019t work for is the confidentiality of the work
\nsamples,\u201d explains McDonald. \u201cI would not have been able to show Brian the
\nwork I had done.\u201d<\/p>\n
This is why having a choice of mentors can be beneficial. He adds: \u201cI
\nknow some people have a hard time finding mentors, but I think Candidates
\nhave to do their homework and put themselves out there.\u201d<\/p>\n
McDonald found that participating in the Credit valley Chapter was an
\nexcellent way to do just that. In fact, he became increasingly involved with
\nthe chapter, eventually volunteering for the AIC-ON Candidates Task Force, as <\/p>\n
one of five candidates to create a survey examining the issues and challenges
\nCandidates face. <\/p>\n
Recently, the Task Force reported back to the Board of the Ontario
\nAssociation, making several suggestions for improvement based on the
\nsurvey responses. One of these recommendations was to find more ways
\nto involve Candidates in the accreditation process. \u201cThat way, instead
\nof feeling isolated, they feel that they are part of a cohesive group,\u201d
\nexplains McDonald, adding that part of this integration is as simple as
\nensuring Candidates understand the structure of the AIC at the national,
\nprovincial and local level. \u201cI did not know any of that when I started. This
\nis something we can do to help Candidates understand the process and to
\nget them involved.\u201d<\/p>\n
These are some of the points McDonald was able to share with Ontario
\nmembers when he delivered the report on behalf of Committee Chair
\nMarie Garbens, CRA, at the last AIC – Ontario Chapter Chairs Summit. After
\nall, a third of the membership, he points out, is comprised of Candidates.
\n\u201cThey are an important part of the organization,\u201d McDonald reiterates.
\n\u201cWe have to make sure they are being heard and that they are actively
\ninvolved. They are the future of the industry. We have to make sure we
\nkeep that pipeline filled.\u201d<\/p>\n
Part of the process of ensuring that the association continues to attract
\nand maintain membership at the Candidate level involves disseminating
\ninformation not only to students graduating from high school and
\nuniversity, but also to professionals, like McDonald, who might be
\nconsidering a second career. <\/p>\n
For the former food industry manager, the information he researched
\nabout the valuation profession helped him plot the path to accreditation.
\nCurrently, he is taking another AIC course from the University of British
\nColumbia while completing his Applied Experience Program at Robson,
\nMcLean & Associates. In January 2010, he will begin his final course then
\ntake the summer off before starting his guided case study in the fall.
\nAfter successful completion of his written examination and professional
\ncompetency interview, he will be eligible for an AACI designation. <\/p>\n
McDonald can see clearly down the road to his career as a professional
\nappraiser. It is a road filled with hard work and many challenges. But, most
\nof all, it is a goal and a life he knows he can attain. <\/p>\n
\u201cI know some people have a hard time
\nfinding mentors, but I think Candidates <\/p>\n
have to do their homework and put
\nthemselves out there.\u201d<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada16<\/p>\n
n continuing with the review of International
\nValuation Standards (IVS), this article looks at
\napplications of both private and public sector <\/p>\n
asset valuation to financial statements or related
\naccounts, and to decisions involving loan or
\nmortgage security. <\/p>\n
IVA-1 \u2013 VALuAtion for
\nfinAnciAL reporting
\nThe material for International Value Application-1
\n(IVA-1) is drawn from International Financial
\nReporting Standards (IFRSs) and the objective
\nis to explain the principles that apply to
\nvaluations prepared for use in financial
\nstatements. Appraisers should have some
\nunderstanding of the accounting concepts
\nand principles underlying the relevant
\nInternational Accounting Standards (IAS).<\/p>\n
In accounting terminology, there are two
\nmodels for the recognition of property assets on
\nthe balance sheet: the cost model and a fair value
\nmodel. It is this latter model that is the focus of
\nthis application.<\/p>\n
The application begins with a number of
\ndefinitions generally familiar to appraisers such
\nas depreciated replacement cost, improvements,
\nmarket value and specialized property. However,
\nthere are 17 additional definitions, primarily
\nfrom IFRS, which are perhaps new to appraisers.
\nAppraisers undertaking appraisals for financial
\naccounting should study all of them, however,
\na sample of some that may have a different
\nmeaning to appraisers are as follows:
\nDepreciable amount: The cost of an asset, or
\nother amount substituted for cost (in the financial
\nstatements), less its residual value. 1<\/p>\n
Depreciation: The systematic allocation of the
\ndepreciable amount of an asset over its useful life.2<\/p>\n
fair value: The amount for which an asset <\/p>\n
could be exchanged or a liability settled between
\nknowledgeable willing parties in an arm\u2019s
\nlength transaction.3<\/p>\n
impairment loss: The amount by which the
\ncarrying amount of an asset or a cash-generating
\nunit exceeds its recoverable amount.4<\/p>\n
investment property: Property (land or
\nbuilding, or part of a building, or both) held (by
\nthe owner or by the lessee under a finance lease)
\nto earn rentals or for capital appreciation, or both,
\nrather than for:<\/p>\n
a) use in the production or supply or goods or
\nservices or for administrative purposes, or<\/p>\n
b) sale in the ordinary course of business.5<\/p>\n
net realizable value: The estimated selling
\nprice in the ordinary course of business, less the
\nestimated costs of completion and the estimated
\ncosts necessary to make the sale.6 Net realizable
\nvalue refers to the net amount that an entity
\nexpects to realize from the sale of inventory in
\nthe ordinary course of business. Fair value reflects
\nthe amount for which the same inventory could
\nbe exchanged between knowledgeable and
\nwilling buyers and sellers in the marketplace.
\nThe former is an entity-specific value; the
\nlatter is not. Net realizable value for inventories
\nmay not equal fair value less costs to sell.7<\/p>\n
Value in use: The present value of the future
\ncash flows expected to be derived from an asset or
\ncash-generating unit.8<\/p>\n
In undertaking this type of work, an appraiser must
\ndetermine the classification of the asset being
\nappraised, as such determines which accounting
\nconcept applies, i.e., IAS or IFRS. For example, if
\nthe \u2018fair value model\u2019 applies, regular revaluations
\nmay be required. Also, disclosure of whether the
\nappraisal has been conducted by an external or
\ninternal appraisal is required. Keep in mind that <\/p>\n
\u2018fair value\u2019 is not necessarily synonymous with
\n\u2018market value.\u2019 If adopting the \u2018fair value\u2019 concept,
\nIVS notes that the fair value of land and buildings is
\nusually determined from market-based evidence by
\nappraisal that is normally undertaken by profes-
\nsional, qualified valuers. If there is no market-based
\nevidence of fair value because of the specialized
\nnature of the item of property, plant and equipment,
\nand the item is rarely sold, except as a part of a
\ncontinuing business, an entity may need to estimate
\nfair value using an income or depreciated replace-
\nment cost approach.9<\/p>\n
IVA-1 goes on to provide detail on valua-
\ntions for investment properties (IAS 40), impaired
\nassets (IAS 36), business combinations (IFRS 3),
\nsurplus assets (IFRS 5), properties held for sale in
\nthe ordinary course of business (IAS 2), and bio-
\nlogical assets (IAS 41). If dealing with any of these
\nconcepts, an appraiser is obligated to become
\nfamiliar with these terms and concepts in order to
\nbe able to claim competency in an assignment. <\/p>\n
The disclosure requirements of this applica-
\ntion are recognized by most appraisers. As with
\nthe \u2018jurisdiction exception\u2019 concept in CUSPAP, an
\nappraiser undertaking financial accounting apprais-
\nals must disclose the regulatory framework and any
\ndepartures required from the IVS to comply with
\nlocal legislation, regulation (including accounting
\nrules), or customs.10<\/p>\n
IVA-2 \u2013 VALuAtion for
\nSecureD LenDing purpoSeS
\nThis application covers appraisals for lending or
\nmortgage purposes \u2013 what the majority of apprais-
\ners now do \u2013 so the concepts are very familiar.
\nAs IVS notes, an appraisal for lending purposes
\nis not necessarily the same as an appraisal for
\nfinancial accounting purposes. Although a similar
\nbase such as \u2018market value\u2019 may be applicable, <\/p>\n
Primer on
\nInternational Valuation Standards \u2013 Part 5<\/p>\n
I<\/p>\n
By Ray Bower, AACI, P. App., Chair, International valuation Standards Sub-Committee
\nInternational Valuation Standards<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 17<\/p>\n
the assumptions on which the valuation is based
\nmay be different. For example, valuations for
\nfinancial accounting usually assume that the
\n\u2018going concern\u2019 continues, an assumption that
\nmay not be required for lending purposes.<\/p>\n
IVS requires comments on current market
\nactivity and trends; historic, current and anticipated
\nfuture demand for the category of property in
\nthe specific location; consideration for alternative
\nuses; marketability; and any impact of foresee-
\nable events on the value of the property. Most
\nimportantly, IVS requires market-based evidence in
\nsupport of the value conclusions.<\/p>\n
The IVA-2 application adds a paragraph
\nthat may be very helpful to appraisers dealing
\nwith mortgage brokers and the lending com-
\nmunity. Often, there are cases when an appraiser
\nis simply told by a mortgage broker that an
\nappraisal is required, but the lender has yet to
\nbe identified. What can happen in this case is
\nthat a first mortgage lender uses the report to
\nmeasure the risk involved in the loan. Then, a
\nsecond or third mortgagee also relies on the
\nreport. However, the element of risk likely rises
\nsignificantly with each succeeding mortgage.
\nSuddenly, the appraiser is defending a report he
\nor she believed to be a \u2018low risk\u2019 valuation. Had
\nthe appraiser realized that a \u2018high risk\u2019 valuation
\nwas in order, the decision to increase the scope of
\nwork undertaken would likely give the appraiser
\nand the lender a higher level of comfort. IVA-2
\nsuggests that appraisers should have a general
\nunderstanding of the requirements of the lender
\nand possibly the structure of loan terms and
\nagreements. Even though lenders feel that terms
\nof the loan are confidential, it does not relieve the
\nappraiser from the obligation to have a general
\nunderstanding of the lending process, which, in
\nturn, will dictate the scope of work involved. <\/p>\n
Appraisers are sometimes confused when
\nconfronted with a \u2018specialized property.\u2019 Usually,
\nthese types of properties have limited market-
\nability. Their value is usually derived from the
\nbusiness operation itself. In these cases, lenders
\nusually require an appraisal to reflect an \u2018as
\nthough vacant\u2019 state of the property. An example
\nmay be a cold storage facility. The cost of such a
\nfacility is usually higher than a similar sized light
\nindustrial structure, merely due to the insula-
\ntion and cooling requirements. However, if the
\noperation ceases and the lender is forced to sell
\nthe property vacant, a potential buyer would likely
\nput little, if any, value on the additional cost of a
\ncold storage facility. These concepts are known to
\nappraisers as \u2018value in use\u2019 and \u2018value in exchange.\u2019
\nIVA-2 provides explanations for these concepts,
\nalong with other concepts involving \u2018trade related
\nproperties,\u2019 \u2018development properties,\u2019 and \u2018wasting
\nassets\u2019 such as mines or quarries.<\/p>\n
IVA-3 \u2013 VALuAtion of pubLic Sector
\nASSetS for finAnciAL reporting
\nProperty in the public sector is made up of
\ncash-generating and non cash-generating
\nproperty assets, as well as specialized properly
\nassets including heritage and conservation assets,
\ninfrastructure assets, public buildings, public
\nutility plants and recreational assets. As with
\nprivate sector assets, public sector assets fall
\ninto operational and non-operational categories.
\nNon-operational assets include investment and
\nsurplus assets.11<\/p>\n
IVA-3 provides definitions for these vari-
\nous assets and this application mirrors similar
\nconcepts involving fair value, independent valu-
\nations, re-valuations, etc. If involved in preparing
\nappraisal of public sector assets for financial
\naccounting purposes, an appraiser must be <\/p>\n
familiar with International Public Sector Accounting
\nStandards (IPSASs) which provide the necessary
\nguidance, definitions and terminology for deal-
\ning with such things as value in use, government
\nbusiness enterprises, depreciated replacement cost
\napproach, restoration cost approach, etc. <\/p>\n
These past five installments of the IVS Primer
\nhave dealt with almost one half of the entire IVS
\ndocument. The balance of IVS-2007 primarily
\ncomprises Guidance Notes, which provide an
\nexcellent resource for appraisers in dealing with
\nnumerous appraisal issues from simple fundamen-
\ntals of appraising to more complex subjects such as
\ndiscounted cash flow analysis for market valuations
\nand investment analysis. As such, IVS-2007 is a
\nmust for the serious appraiser\u2019s library. <\/p>\n
end notes
\n 1 IAS-16, para.6
\n 2 IAS-16, para.6; IAS 36, para.6
\n 3 IAS-16, para.6
\n 4 Ibid
\n 5 IAS-40, para.5
\n 6 IAS-2, para.6
\n 7 IAS-2, para.7
\n 8 IAS-36, para.6
\n 9 IVA-1 \u2013 5.4 Valuations under IAS 16
\n 10 IVA-1 \u2013 7.0 Disclosure requirements.
\n 11 IVA-3 \u2013 1.5<\/p>\n
international Valuation Standards
\nSub-committee
\nRaymond Bower, AACI, P. App. – Chair
\nLarry Dybvig, AACI, P. App.
\nDavid Jenkins, AACI, P. App.
\nLouis Poirier, AACI, P. App.
\nBrad Wagar, AACI, P. App.
\nPaul Olscamp, AACI, P. App., Fellow
\nGeorge Ward, AACI, P. App.
\nTo contact this committee email:
\nstandards@aicanada.ca<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada18<\/p>\n
Legal news & Views<\/p>\n
T
\nSaying goodbye
\n Sickness and death
\n in the appraisal profession<\/p>\n
By Mark R. Frederick, LL.B., Miller Thomson LLP<\/p>\n
oday, we canvass the topic of prepar-
\ning to exit the appraisal profession. For
\nsome, retirement is a long awaited goal.
\nFor others, dreams of retirement are <\/p>\n
curtailed by illness and death, leaving loved ones
\nto care for the sick and tend to their affairs. In the
\ncase of a professional appraiser, the multitude
\nof assignments, past and present, can make this
\nunenviable task even more of a chore and, in
\nmany cases, a burden.<\/p>\n
Most of us think this will never happen to
\nus. But, in the majority of cases, it will happen <\/p>\n
and, unless we prepare ourselves for such con-
\ntingencies, we may end up creating a situation
\nof liability for ourselves, our estate, and those
\nwho try to cope with our withdrawal.<\/p>\n
There are several things that the appraiser,
\nwhether in single practice or in a partnership\/
\nfirm, can do in order to mitigate this prospect:
\n1. Cultivate a person who can take over for you to <\/p>\n
assist in the completion of your projects. He or
\nshe should be someone you trust and whose
\nwork meets your standards. Some appraisers
\nhave formal and informal referral relationships <\/p>\n
\u201cUnless we prepare
\nourselves for such
\ncontingencies, we <\/p>\n
may end up creating a
\nsituation of liability for <\/p>\n
ourselves, our estate, and
\nthose who try to cope
\nwith our withdrawal.\u201d<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 19<\/p>\n
Saying goodbye
\n Sickness and death
\n in the appraisal profession<\/p>\n
whereby work can be assumed to ensure that
\ncompletion dates are met with quality results
\nfor the client. Instructions should be left behind
\nor a format of appraisal should be agreed on in
\nadvance in order that appraisals are completed
\nin a timely fashion.<\/p>\n
2. Maintain a list of pending and future projects as
\nwell as client names and contact numbers so
\nthat required work can be identified and either
\ncancelled or dealt with by your \u2018substitute.\u2019 The
\ndesire to retain clients obviously depends on
\ncircumstances of whether or not you will be
\nreturning to work. Such a list and information
\nshould be readily accessible to your survivors or
\ncolleagues, so that they may follow up immedi-
\nately to ensure that clients are properly served.<\/p>\n
3. Ensure that your past files are well catego-
\nrized and accessible or that directions exist
\nthat will identify their location. We have
\nexperienced many cases where the unfor-
\ntunate widow or spouse, coping with their
\npartner\u2019s illness, cannot find documents or
\nreports in order to answer a negligence law-
\nsuit. This causes significant stress to people
\nin this position, as they feel compelled to
\ndefend their partner\u2019s good name, yet are
\nwithout the ability to find or deal with docu-
\nments required for that process. Instructions
\nas to business matters and affairs should <\/p>\n
be discussed with your spouse in advance,
\npreferably at the same time you have your valid
\nwill made or updated.<\/p>\n
4. Ensure that you have a list of accounts pending,
\nso that your executor or business representative
\ncan collect your accounts. This will ensure that
\nyour estate or practice has sufficient income
\ncollected, as such funds will be needed to wind-
\ndown your practice. Refunds may also have to
\nbe provided if deposits were taken in advance of
\nwork, when that work cannot be completed.<\/p>\n
5.\tEnsure\tthat\tyour\trepresentatives\tmake\tno
\nadmissions against your interest. In face of
\npeople complaining of your work, hearing your
\nspouse make the admission that \u201cHenry has had
\nmemory problems for years\u201d usually does not
\nhelp in refuting claims where you are alleged
\nto have neglected certain appraisal issues. Your
\nspouse\/executors should simply be told to
\nreport any allegation to your claims adjusters
\nretained by the professional liability insurance
\nprogram, to ensure that such matters are dealt
\nwith properly.<\/p>\n
6. Maintain a deductible reserve for claims pend-
\ning against you to ensure that your spouse has
\naccess to funds to meet deductible obligations.
\nIf you are retiring or are not well, and you have
\na good idea that the allegations are borne out,
\nyou may pay your deductible in advance.<\/p>\n
7. Have a proper will and a proper power of attor-
\nney for property. If you run business accounts,
\nthese will be inaccessible unless your spouse
\nor executors have the ability to deal with those
\nfunds. A will can be taken in and proved, so as to
\nallow your designated executors access to funds.
\nA power of attorney is only valid while you are
\nalive. If you are confined to a hospital or home,
\nthe person named in the power of attorney for
\nproperty can bring it to a bank or other business
\nestablishment and transact business in your
\nname. There are many other reasons to have
\nvalid testamentary documents, as the complica-
\ntions arising for your estate from lack of a valid
\nwill can be horrendous on your successors and
\nheirs and can end your hopes to benefit people
\nin a manner that you wish. <\/p>\n
8. Finally, ensure that, if you have to leave the
\nprofession, you can purchase or arrange for
\nthe purchase of \u2018tail coverage\u2019 that will cover
\nyour past work for any negligence case that
\narises. Generally, most people buy tail cover-
\nage for a period of 2-6 years after they retire
\nor stop practising.<\/p>\n
By implementing these steps, you will not only
\navoid claims, but also leave behind some peace of
\nmind for your successors and heirs who have to
\ndeal with your affairs, as well as your clients with
\nwhom you have had ongoing relationships. <\/p>\n
\u201cBy implementing these steps, you will not only avoid claims, but also leave behind
\nsome peace of mind for your successors and heirs who have to deal with your affairs, <\/p>\n
as well as your clients with whom you have had ongoing relationships.\u201d<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada20<\/p>\n
Successful
\nleadership transition<\/p>\n
D<\/p>\n
Professional Qualifications and Competency
\nBy John Clark, AACI, P. App. <\/p>\n
Member, PQC Committee<\/p>\n
eath and taxes often are described
\nas the certainties in life \u2013 individuals
\nhave little control over them. On the <\/p>\n
other hand, retirement and financial planning
\nare within one\u2019s control. valuation practitioners
\nmay want to plan their future, at least as much
\nas they can. Baby boomers continue to reign
\nand make up a large percentage of the Appraisal
\nInstitute of Canada (AIC) membership. Con-
\nversely, a growing number of younger profes-
\nsional members appear on the scene each year.
\nCan the older of us better navigate the transition
\nas the new generation replaces us?<\/p>\n
Business, or at least successful businesses,
\noften are family owned, or are like families.
\nBusiness is built by leadership and risk taking,
\nalong with the acquisition of experience and
\ncorporate history. Making the generational
\ntransition in any organization requires the
\ntransfer of authority to the leadership of the
\nnext generation. What often happens is the loss
\nof corporate history when long-term members
\nof an organization retire. Retention of corporate
\nhistory, accompanied by the transfer of author-
\nity to the next generation, is one of the keys to
\nsuccession planning. Whether it is in a small
\nfirm or large institution, the \u2018family\u2019 depends for
\nits success on key and trusted people, working
\ntogether. Leadership has to be focused and,
\ninevitably, a single person has to be in the key
\nleadership role. <\/p>\n
As leadership transfers from one genera-
\ntion to the next, many organizations fail on
\nthe retention of corporate history and past
\nexperience, as key people transition to retired
\nstatus. Better planning would see people rise
\nin authority and then pull back to an advisory
\nrole when new leadership takes control. This
\nrequires skill and determination from both the <\/p>\n
old and new. New leadership needs
\nto be given free reign to carry out its
\nresponsibilities, but, at the same
\ntime, be comfortable enough to
\nseek advice from the experienced
\nprofessionals. <\/p>\n
The appraisal profession has
\nbeen part of the Canadian business
\nscene since at least the 1930s and we are
\nnow in the third transition of generations.
\nThe current passing of the torch is differ-
\nent from the past in that fewer
\npeople are employed
\nby corporations
\nand many more
\nin a growing
\nnumber of small
\nor family firms.
\nThe challenge
\nfor a family
\nfirm is to
\ntransfer con-
\ntrol without
\ndestroying
\nitself. An <\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 21<\/p>\n
urban myth is that organizations go through a
\ntrio of life cycles. Generation one builds a busi-
\nness, generation two manages it, and generation
\nthree runs it into the ground. Is this a myth or
\nreality? The next generation has to be selected
\non the basis of merit and capability, coupled with
\nthe timing of the transfer.<\/p>\n
The new generation must be given 100%
\ncontrol over the operation and growth of the
\nbusiness. Will this be difficult for the old guard \u2013
\nabsolutely. Clients and friends that worked with
\nthe former leader will continue to call, and, to
\nbe successful, the former chieftain will need to
\ninsist that questions go to the successor. To do
\notherwise would instantly undermine the new
\nleader. On the other hand, having the former
\nleader available, and assuming they can cope
\nwithout interfering, will preserve both corpo-
\nrate history and, equally or more importantly,
\ncorporate business.<\/p>\n
Small or family businesses, unlike an institu-
\ntion, may have a value that the old generation
\nwants to sell, and the new is prepared to buy.
\nSome family organizations feel that a son or
\ndaughter must take on the business, assuming
\nthat children will have the same capability and
\ninterests as their parents. This is rarely the case,
\nand, if young adults are coerced in this way,
\ndisaster may follow. You may need to look more
\nbroadly to keep the business in the family, and
\nyou may find that one of your children ends up
\npartnered with someone who shares your goals
\nand whom you can trust. If you want to be paid
\nfor your business, you need to make sure that
\nyou have something that is indeed valuable,
\nespecially in the eyes of your successor. There are
\nstories of successful businesses being destroyed
\nafter the old generation sells and leaves the
\nbusiness. Too late, the successor becomes
\naware of the importance of the predecessor\u2019s
\npersonal business links and interpersonal skills,
\nas old business disappears and internal rivalries
\nemerge. The successor needs a chance to become <\/p>\n
\u201cIf it is done successfully, you may retire happier, and the organization to which you
\ngave so much time and effort will have a better chance of survival.\u201d<\/p>\n
professional Qualifications
\n and competency committee
\nCharles Johnstone, AACI, P. App. \u2013 Chair
\nBrad Brewster, AACI, P. App.
\nRoland Mayr, AACI, P. App.
\nSuzanne Pater, CRA, Executive Director, AIC – PEI
\nJohn Clark, AACI, P. App., Fellow
\nAlfred Mullally, AACI, P. App.
\nTo contact this committee email:
\npqcc@aicanada.ca<\/p>\n
a respected leader inside the firm as well as
\nexternally. This takes time, and a successful
\nplanner will plan for a replacement many years
\nbefore retirement. The choice of a successor
\nmay be key to an owner\u2019s financial future, and
\na wrong or inexperienced choice will backfire.
\nConversely, an overzealous new leader who
\nrefuses to mine the resources of a predeces-
\nsor is vulnerable to unnecessary surprises and
\npotential failure.<\/p>\n
Changing of the guard will never be easy,
\nbut, for organizations that plan their future,
\nthe transition need not be impossible. Do not
\ndelay too long in making the decision to retire,
\nas the training of a successor will not happen
\novernight. However, do not feel that you need
\nto be put out to pasture. The experience and
\nknowledge of successful leaders can continue to <\/p>\n
be mined, and paid for, for a long time. Moving
\naway from a leadership role will happen
\nwhether you plan for it or not; the planning is
\nup to you. If it is done successfully, you may
\nretire happier, and the organization to which
\nyou gave so much time and effort will have a
\nbetter chance of survival. <\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada22<\/p>\n
s I travel around the country, I take
\nthe opportunity to ask Candidate
\nmembers if they have had prob-<\/p>\n
lems finding a mentor. Sadly, more often than
\nnot, the answer is yes. I will provide you with a
\nfew real examples. <\/p>\n
This past summer, I was in northern Sas-
\nkatchewan inspecting a closed sawmill that was
\nthe subject of an assessment appeal. The assess-
\nment supervisor took great pride in introducing
\nhis new employee as hoping to be \u201cone of you.\u201d
\nSeeking some clarification, I found out that the
\nCandidate was a recent U of Guelph graduate
\nwho had almost completed the educational
\npre-requisites for the AACI designation. When
\nI asked about her applied experience, she told
\nme she had been unsuccessful for more than
\na year in finding a mentor and, as such, had
\nnot started. She told me that her organization
\ndid not have many designated members and
\nthat the people she approached from outside
\nwere either not interested or said they did not
\nhave the time.<\/p>\n
So, is this a rural problem? Unfortunately,
\nit is not. I recently had a similar conversa-
\ntion with another Candidate in Toronto who
\nshared with me a similar story. Once again,
\nthere were no designated members in his
\ndepartment and the external members he
\napproached were not willing to become his
\nmentor because of time constraints.<\/p>\n
Is the problem economic? Again, unfortu-
\nnately, it probably is not. We recently received
\ncorrespondence from a somewhat disgruntled
\nCandidate who told us that, although he had
\nbeen able to find work and was working under
\nthe direct supervision of several co-signers, he
\nhad been unable to enlist a mentor so that he <\/p>\n
could enrol in the Applied Experience Program.
\nSo, if it is not a geographic or economic <\/p>\n
problem, what is the root of the concern? In
\nspeaking with designated members, I find that
\nthere is a great deal of confusion between the
\nrole of a mentor and that of a co-signer. It is
\nlikely that this confusion between the roles and
\nresponsibilities may be causing our designated
\nmembers to be discouraged from accepting
\nthe rewarding and worthwhile opportunity of
\nmentoring our Candidates.<\/p>\n
Therefore, I think it is useful to explore the
\ndifferences between these two important roles in
\nCandidate development.<\/p>\n
The primary aim of the Candidate Co-Signing
\nPolicy is to protect the public by ensuring that
\ndesignated members provide appropriate
\nsupervision to the work of inexperienced, non-
\ndesignated members of the Institute. The role of
\na designated member who is a co-signer is a very
\nhands on supervisory role. This is understand-<\/p>\n
able, as they are ultimately responsible for the
\ncontent and conclusions of the report or appraisal
\nthat they co-sign. The Guidelines for Candidate
\nCo-signing (http:\/\/www.aicanada.ca\/cmsPage.
\naspx?id=114) stipulate that the co-signer must
\nensure that the Candidate understands the Prob-
\nlem; Property Content; Property Rights; Defini-
\ntion of value; Intended Use, Purpose and Scope;
\nHighest and Best Use; Economic variables; Legal
\nIssues; Research; Approaches to value; Ethics;
\nEffective Communication; and Critical Thinking
\nrequired for each assignment. <\/p>\n
The Applied Experience Program ensures that
\nall newly-designated members have obtained
\nrelevant experience in the application of the First
\nPrinciples of Value in a professional setting, and
\nhave developed the professional skills expected
\nby the clients of AIC members. Mentoring, which
\nreplaced articling, ensures that Candidates are
\nguided in their development and in the applica-
\ntion of the Principles of Value and professional
\nskills. The mentor must be willing to:
\n\u2022\t\t assist\tthe\tCandidate\tto\tprepare\tthe Applied <\/p>\n
Experience Enrolment Report, which forms a
\ncritical component of the application to AEP; <\/p>\n
\u2022\t\t help\tthe\tCandidate\tunderstand\tthe\timportance\tof
\nFirst Principles of Value as they relate to their work
\nin the Recognized Areas of Applied Experience; <\/p>\n
\u2022\t\t advise\tthe\tCandidate\ton\tthe\tdevelopment\tof
\nCritical Professional Competencies as defined
\nby AIC; and <\/p>\n
\u2022\t\t prepare\ta\treport\tfor\tthe\tCommittee\tof\tExam-
\niners that briefly outlines the Candidate\u2019s
\nexperience as well as his or her application and
\nunderstanding of the First Principles of Value
\nand recommends that the Candidate is ready
\nfor designated member status based on his or
\nher applied experience. <\/p>\n
Applied Experience<\/p>\n
A<\/p>\n
By Charles Johnstone, AACI, P. App
\nMember, Applied Experience Sub-Committee<\/p>\n
Mentor versus co-signer<\/p>\n
\u201cThe primary aim of the
\nCandidate Co-Signing
\nPolicy is to protect the <\/p>\n
public by ensuring that
\ndesignated members
\nprovide appropriate <\/p>\n
supervision to the work
\nof inexperienced, non-<\/p>\n
designated members of the
\nInstitute.\u201d<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 23<\/p>\n
The role and obligations of a mentor are
\ndefined in the Applied Experience Program
\nGuidelines (http:\/\/www.aicanada.ca\/images\/
\ncontent\/file\/aic_applied_experience_
\nguidelines%28june_2009%29.pdf) .Candidates
\nand their mentors work together to ensure that
\nthe Candidates are prepared to demonstrate,
\nin both written and oral examinations, their
\nproficiency in the application of the First Prin-
\nciples of value and have developed the necessary
\nProfessional Competencies.<\/p>\n
In many instances, a Candidate\u2019s employer
\nwill also serve as a mentor, but the mentor need
\nnot have any employment relationship with
\nthe Candidate. In some instances the Candidate
\nmay also have a co-signing relationship with the
\nmentor or another designated member \u2013 this
\nrequires a separate registration of the relation-
\nship. Not all Candidates will require or want a co-<\/p>\n
signer relationship with a designated member
\n\u2013 this is not a prerequisite to obtaining a
\nprofessional designation. It is not a requirement
\nthat Candidates sign a report, but, if they do
\nnot sign it, then the certification needs to cite
\nthem as having provided significant profes-
\nsional assistance in completing the assignment.<\/p>\n
All Candidates require a mentor to enter
\ninto and complete the Applied Experience
\nProgram that is a prerequisite to obtaining a
\ndesignation.<\/p>\n
As explained here, the role of a mentor is to
\nassist, help and advise the Candidate during the
\nApplied Experience Program, in order to suc-
\ncessfully demonstrate his or her knowledge of
\nthe First Principles of Value and the Professional
\nCompetencies during the exam and interview
\nprocess. This is not the same hands-on super-
\nvisory role required of a co-signer. As a mentor, <\/p>\n
you will have the benefit of regularly meeting
\nwith Candidates that will be your future col-
\nleagues, exposing yourself to fresh ideas about
\nour profession, and learning by teaching. As an
\nemployer, you will have the additional benefit
\nof using the meetings with the Candidate as
\npart of the ongoing employee development and
\nperformance review process. <\/p>\n
Applied experience Sub-committee
\nDuane Bates, AACI, P.App – Chair
\nJohn Clark, AACI, P. App.
\nTroy Davidson, CRA
\nSuzanne de Jong, AACI, P. App.
\nDavid Highfield, AACI, P. App.
\nCharles Johnstone, AACI, P. App.
\nSusan McRury, CRA
\nTo contact this committee, email
\npqcc@aicanada.ca<\/p>\n
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\nindustrial costs<\/p>\n
Computed in Canadian dollars
\n Square foot, segregated and unit-in-place costs
\n Depreciation tables
\n Continually updated and localized to more than 90
\nlocations in Alberta, British Columbia, Manitoba, the
\nMaritimes, the Northwest Territories, Ontario, Quebec,
\nSaskatchewan and Yukon.<\/p>\n
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\nChoose costs in manuals, software or online.
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Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada24<\/p>\n
The wider world of peer review<\/p>\n
P
\nBy Mike Garcelon, AACI, P. App., Member, Ad Hoc Committee on Peer Review <\/p>\n
Adhoc committee on peer review
\nLinda Hastings, AACI, P. App. \u2013 Chair
\nMike Garcelon, AACI, P. App
\nCherie Gaudet, CRA
\nGerald McCoombs, AACI, P. App
\nBob Stewart, AACI, P. App
\nGreg Bennett, AACI, P. App
\nTo contact this committee, email:
\npeerreview@aicanada.ca<\/p>\n
Peer Review<\/p>\n
revious peer review articles have focused
\non AIC\u2019s Peer Review Pilot Project. In this
\narticle, we will extend our view and take <\/p>\n
a brief look at recent peer review developments by
\nother Canadian professions. A short update of AIC\u2019s
\npeer review program is also offered.<\/p>\n
In 2006, the Law Society of Upper Canada cre-
\nated the Practice Review Program, which reflects
\nthe Society\u2019s emphasis on quality assurance in
\nservice of public interest.<\/p>\n
The Chartered Accountants of Alberta and BC
\nhave each implemented a mandatory Practice
\nReview Program. Each firm is reviewed at least
\nonce every three years and given recommendations
\nfor improvement. Other provincial CA associations
\nhave similar programs, as do numerous interna-
\ntional associations (e.g., the New Zealand Institute
\nof Chartered Accountants). <\/p>\n
In 2002, the College of Nurses of Ontario
\ncreated the mandatory Quality Assurance Practice
\nReview program with a stated purpose of protect-
\ning the public and enhancing professional growth.
\nUp\tto\t750\tnurses\tand\tnurse\tpractitioners\tare
\nselected at random each year. This program has a
\nthree-step process involving in-depth assessments
\nand, if necessary, a remediation component.<\/p>\n
In 2006, the Ontario Ministry of Education
\nintroduced the Teacher Performance Appraisal
\nSystem for Experienced Teachers. The intent of
\nthis program is to provide a continuum of sup-
\nport, as a new teacher successfully completes the
\nNew Teacher Induction Program and becomes an
\nexperienced teacher. <\/p>\n
The Practice Review Program of the Profes-
\nsional Engineers and Geoscientists of BC is
\ndesigned for the benefit of its membership, and
\nis an education-oriented professional develop-
\nment process. This is a mandatory program, and
\nmembers can also request additional reviews.<\/p>\n
The Ordre des \u00e9valuateurs agr\u00e9es du
\nQu\u00e9bec has a mandatory peer review pro-<\/p>\n
gram\tauditing\tup\tto\t5%\tof\tmembers\ton\tan
\nannual basis. <\/p>\n
Based on this brief survey, it can be observed
\nthat many of Canada\u2019s top-tier professions
\nhave recognized the tremendous benefits of an
\neducation-oriented peer review program. <\/p>\n
In terms of AIC\u2019s Peer Review Pilot Project
\n(PRPP), we are pleased to report that the PRPP
\nhas progressed well since its January 2009
\nlaunch, and initial feedback from participants has
\nbeen very positive. <\/p>\n
As a result of this encouraging start, the Board
\nof Directors has extended the PRPP for an addi-
\ntional two years, from January 2010 until Decem-
\nber 2011. Also, beginning January 2010, the PRPP
\nmandate has been expanded to include reviews of
\nnon-residential appraisals.<\/p>\n
During the past few months, the Ad Hoc Com-
\nmittee on Peer Review has been busy recruiting
\ncommercial reviewers, preparing the fall 2009 <\/p>\n
training sessions, and creating a commercial
\nreview infrastructure. Also, the committee
\nrecently conducted a member-wide survey to
\ngain a better understanding of the members\u2019
\nperceptions and expectations of the peer
\nreview concept.<\/p>\n
For AIC members interested in seeing
\ncopies of actual peer reviews, please go to
\nhttp:\/\/www.aicanada.ca\/cmsPage.aspx?id=266
\nin the members section of the AIC website
\nwhere we have posted redacted copies. <\/p>\n
\u201cThe Peer Review Pilot Project has progressed well since
\nits January 2009 launch, and initial feedback from <\/p>\n
participants has been very positive.\u201d<\/p>\n
Package Price: $125* (regularly $140)<\/p>\n
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benefi t from this essential package.<\/p>\n
Order Online at:
\nwww.appraisalinstitute.org\/13thpackage <\/p>\n
Or Call:
\n800-504-7440 (8 a.m. \u2013 5 p.m. ET)<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada26<\/p>\n
The investigating perspective
\nDarrell Thorvaldson, AACI, P. App., Co-Chair, Investigating Committee<\/p>\n
investigating committee
\nSheldon Rajesky, AACI, P. App. \u2013 Co-Chair
\nDarrell Thorvaldson, AACI, P. App. \u2013 Co-Chair
\nDoyle Childs, AACI, P. App
\nGerry Gehlen, AACI, P. App
\nStan Jugovic, AACI, P. App
\nMike Schulkowsky, AACI, P. App
\nPaul Beckwith, AACI, P.App
\nvanit Kumar, CRA
\nDan Brewer, AACI, P.App
\nNicholas Lonsdale, AACI, P.App
\nDeanna Halladay, CRA
\nTo contact this committee, email:
\ninvestigating@aicanada.ca<\/p>\n
I
\nInvestigating<\/p>\n
t was an honor to be asked to sit on the
\nAppraisal Institute of Canada (AIC) Investigat-
\ning Committee (IC) and have the opportunity <\/p>\n
to work with some talented and dedicated
\nvolunteer members. Leading this committee is
\nno easy task and I have the greatest respect for
\neveryone who has taken on this challenge during
\nmy tenure, including Dave Gabruch and John
\nHutchinson. Today, it is my privilege to work with
\nSheldon Rajesky as IC co-chair. <\/p>\n
Most professions looked very different in
\nthe 1970s than they did in the 1990s. Similarly,
\nthese specialized 1990s occupations requiring
\nextensive education and training also changed
\nand evolved in the succeeding decade. How
\nprofessions accept the necessity and inevitability
\nof change enables them to see times of transition
\nas opportunities for constructive improvement.<\/p>\n
A 2008 Ontario Superior Court decision
\nprovided significant direction for AIC\u2019s Professional
\nPractice Committee to consider the background of
\nthe AIC investigating process. With this decision,
\nthere was a misunderstanding as to what the
\nprocess meant, due to some simplistic comments
\nwhich included the notion that, somehow, the AIC
\nprocess was \u201cfatally flawed.\u201d Of course, this was
\nnot the case and the AIC sought fair opportunity
\nthrough an appeal to uphold the professional prac-
\ntice process. The decision of the Ontario Court of
\nAppeal this year found that the AIC abided by the
\nprinciples of fairness in keeping with the profes-
\nsional practice process outlined in the consolidated
\nregulations. In light of this, the IC saw an opportu-
\nnity to change the way it communicated.<\/p>\n
The real \u2018meat\u2019 of professional practice
\nrevolves around the honest and respectful shar-
\ning of information between complainants, AIC
\nmembers and the Professional Practice Com-
\nmittee. The IC is charged with the responsibility
\nto receive complaints about members from the
\nCounselor. The primary goal of our process is
\nprocedural fairness, which we seek to achieve <\/p>\n
with two steps \u2013 to identify and detail all of
\nthe evidence in support of alleged infractions
\ncommitted by the member; and to provide the
\nmember with fair and ample opportunity to
\nexplain his\/her understanding of the situation,
\nincluding how it arose, as well as what he\/
\nshe did and did not do. We achieve this with
\nwritten communication and, wherever possible,
\na telephone conversation with the member. Each
\ninvestigator assigned to a file is asked to provide
\na thorough and comprehensive report. <\/p>\n
With the clear understanding that the opinion
\nof the investigator shall not be considered a find-
\ning or conclusion of alleged breaches of CUSPAP,
\nSheldon and I ask the investigator to provide her\/
\nhis recommendations for a suggested outcome
\nand\/or discipline which we, in our sole discretion
\nas co-chairs, may choose to accept or reject. <\/p>\n
Readers\tare\tencouraged\tto\tread\tSection\t5.44
\nof the consolidated regulations, which defines
\nthe range of sanctions available for both findings
\nof practice sanctions and conduct sanctions. It is
\nour view that the appropriateness of a sanction is
\nlargely determined by the member. <\/p>\n
Should you have the opportunity to partici-
\npate in the professional practice process and
\nbe the subject of a formal complaint, please
\navoid any consideration that you are now like
\na Holstein that has wandered into an abattoir.
\nThe member\u2019s level of co-operation throughout
\nthe investigation is very important, because
\nour primary goal is to educate and help the
\nmember with restorative objectives. We want
\nto hear your compelling point of view. In this
\nway, we can work together towards positive
\ndevelopments and prevent reoccurrence of situ-
\nations that caused the original complaint. <\/p>\n
Proceeding to the other end of the spec-
\ntrum, all members must take responsibility for
\ntheir actions and, in such circumstances where
\nwe are in a position to report serious contraven-
\ntions, we will respond appropriately in accor-<\/p>\n
dance with the rules outlined in the consolidated
\nregulations. <\/p>\n
The IC is a team of volunteers wanting to
\ngive back to the AIC by upholding the rules and
\nthe regulations that make us Canada\u2019s valuation
\nauthority. We communicate with members,
\ncomplainants, the Counselor, and the Professional
\nAffairs Coordinating Committee (PACC). Earlier
\nthis year, when Sheldon and I took on our roles
\nas co-chairs, we were faced with a backlog of
\n59\tinvestigating\tfiles.\tAt\tthe\ttime\tof\twriting\tthis
\narticle, and as a result of our communication
\nefforts, we have dealt with 21 files. Of these, 11
\nfiles were closed without any further action other
\nthan writing the member, four have been for-
\nwarded to the two advocates, three have moved
\non to the Adjudicating Committee, and three have
\nbeen closed with member agreements. <\/p>\n
Open communication assures that ideas and
\npositions have a forum. The IC has made real
\nchanges as steps towards our commitment to
\nmake sure these many lines of communication
\nare both clear and free. We want to work with our
\nmembers and we appreciate your co-operative,
\nrespectful and helpful efforts to assist us resolve
\nany matter put before us. <\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 27<\/p>\n
By John Shevchuk, C. Arb, Barrister & Solicitor, Member, Appeal Committee<\/p>\n
Appeal hearing Standard of Review<\/p>\n
R<\/p>\n
Appeal<\/p>\n
egulation\t5.52\tof\tthe\tConsolidated
\nRegulations of the Appraisal Institute
\nof Canada (the \u2018Regulations\u2019) is <\/p>\n
entitled Standard of Review at Appeal Hearing.
\nImplicit in the title is the fact that hearings before
\nthe Appeal Committee are not new hearings.
\nRegulation\t5.52.6\tconfirms\tthis:\t\u201cAn\tappeal\thear-
\ning is not a hearing \u2018de novo.\u2019\u201d In other words, the
\nAppeal Committee simply reviews the decisions
\nmade by others \u2013 it does not adjudicate afresh.<\/p>\n
In the review process, the Appeal Committee
\nis bound by three standards of review described
\nunder\tRegulation\t5.52:<\/p>\n
a. correctness;
\n b. unreasonableness; and
\n c. patent unreasonableness.<\/p>\n
These standards are borrowed from the common
\nlaw as it existed prior to a recent Supreme Court
\nof Canada decision.1 The standards of review
\ndictate the deference the Appeal Committee must
\ngive to the decision-makers whose decisions are
\nappealed. Under a correctness standard, little
\ndeference is required; under a reasonableness
\nstandard, some deference is afforded; and, in the
\ncase of the patent unreasonableness standard,
\nmuch deference is in order. <\/p>\n
The correctness standard is the easiest to
\nexplain. It involves the Appeal Committee develop-
\ning its own reasoning to determine the correct
\nresult. If the appealed decision coincides with
\nthe determination of the Appeal Committee, the
\ndecision will be affirmed. Otherwise, it will be
\noverturned or varied.<\/p>\n
The challenge is explaining unreasonableness
\nand patent unreasonableness. One judge has said that
\nunreasonableness exists when a probing examination
\ndiscloses a result that cannot be supported on the
\nevidence2, whereas a result is patently unreasonable
\nif it clearly, on its face, cannot be supported on the
\nevidence. Under either reasonableness standard, the
\ntest is not whether the Appeal Committee agrees
\nwith the appealed decision. It is enough if the Appeal <\/p>\n
Committee concludes that, on the evidence or in
\nthe circumstances, the decision-maker could make
\nthe decision.<\/p>\n
Under the Regulations, correctness is the
\ndefault\tstandard.\tRegulation\t5.52.1\tstates:\t\u201cIn
\nan appeal hearing, the standard of review to
\nbe applied to a decision is correctness for all
\nquestions except those respecting the exercise
\nof discretion, findings of fact and the application
\nof the common law rules of natural justice and
\nprocedural fairness.\u201d One can see that much falls
\noutside the default correctness standard.<\/p>\n
The point is that decisions not subject
\nto the correctness standard will be more
\ndif ficult to overturn because the Appeal
\nCommittee is required to pay more respect
\nto the rulings of the decision-makers. Under
\nthe reasonableness standard, the Appeal
\nCommittee may be forced to accept deci-
\nsions with which it might not agree. To
\nreiterate the point made above, the question
\nis whether the appealed decision withstands
\na \u2018somewhat probing examination\u2019 and
\ncan be supported when the evidence as a
\nwhole is reviewed. The unreasonableness
\nstandard does not involve asking what the
\ncorrect decision would have been. Under this <\/p>\n
standard, there will often be no single right
\nanswer to the question under review.<\/p>\n
As noted earlier, reasonableness differs from
\npatent unreasonableness by the \u2018immediacy or
\nobviousness of the defect.\u2019 A patently unreason-
\nable decision is \u2018clearly irrational\u2019 or \u2018evidently not
\nin accordance with reason\u2019 \u2013 \u2018so flawed that no
\namount of curial deference can justify letting it
\nstand.\u2019 A decision may be unreasonable without
\nbeing patently unreasonable, when the defect
\nin the decision is less obvious and might only be
\ndiscovered after \u2018significant searching or testing.\u20193<\/p>\n
When the reasonableness standards apply, the
\nappellant must demonstrate how the evidence
\ncannot support the appealed decision.<\/p>\n
The standard of review case law has moved
\non.4 The number of standards has been reduced
\nfrom three to two (correctness and reasonableness),
\nunless the rules of a tribunal dictate otherwise.
\nSince our Regulations dictate otherwise, the law
\npertaining to three standards is still germane.
\nConsequently, a member appearing before the
\nAppeal Committee needs to appreciate that the
\ncommittee\u2019s role is limited to a review process
\nwhich depends upon which of the three standards
\nof review apply. <\/p>\n
end notes
\n1 Dunsmuir v. New Brunswick, 2008 SCC 9
\n2 Ryan v. Law Society (New Brunswick), 2003 SCC 20
\n3 Ryan,\tsupra.,\tparagraphs\t52\tand\t53
\n4 Dunsmuir, supra.<\/p>\n
\u201cA member appearing
\nbefore the Appeal <\/p>\n
Committee needs to
\nappreciate that the <\/p>\n
committee\u2019s role is limited
\nto a review process which <\/p>\n
depends upon which of
\nthe three standards of <\/p>\n
review apply.\u201c<\/p>\n
Appeal committee
\nLeonard Lee, AACI, P. App. \u2013 Chair
\nAllan Beatty, AACI, P. App., Fellow
\nDavid Babineau, AACI, P. App., Fellow
\nJohn Shevchuk, Associate
\nTo contact this committee, email:
\nappeal@aicanada.ca<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada28<\/p>\n
Streamlining the
\nadjudication hearing process<\/p>\n
T<\/p>\n
By Vesa Jarvela, AACI, P. App., Member, Adjudicating Committee
\nAdjudicating<\/p>\n
Adjudicating committee
\nJohn Ingram, AACI, P. App. \u2013 Chair
\nPat Cooper, AACI, P. App
\nPeter Lawrek, AACI, P. App
\nKenneth Smith, AACI, P. App
\nMichael Wootton, AACI, P. App
\nvesa Jarvela, AACI, P. App
\nTo contact this committee, email
\nadjudicating@aicanada.ca<\/p>\n
he role of the Adjudicating Committee
\n(AC) is to hear referred cases involving
\nallegations of member MISCONDUCT, <\/p>\n
and to hear appeals to decisions taken by the
\nCounsellor of Professional Practice. To this end,
\nthe AC arranges formal hearings that are held
\ntwice per year, generally in the spring and fall.
\nRecognizing Canada\u2019s geographic vastness and
\nthe fact that our membership extends from coast
\nto coast, scheduling AC hearings can present
\nchallenges. Based on past experience and, in an
\nattempt to maximize accessibility, AC hearings
\nare held each spring in vancouver, BC and each
\nfall in Ottawa, ON. As might be expected, these
\nhearings are intended to facilitate in-person
\nattendance and are held in a local hotel with a
\nformal set-up <\/p>\n
While these venues serve to facilitate atten-
\ndance, it is nevertheless acknowledged that, for
\nsome members, attending in person may not
\nalways be possible or, in other instances, costs or
\nscheduling could impede attendance. Because it
\nis not the AC\u2019s intention to create hardship in an
\nalready arduous situation, the Appraisal Institute of
\nCanada (AIC) Regulations offer alternatives.<\/p>\n
For example, the Regulations permit the
\nCounsellor of Professional Practice \u2013 a position
\ncreated in the AIC\u2019s reorganization several years
\nago \u2013 to either process or refer files. Robert
\nPatchett, Counsellor, Professional Practice is
\ngenerally the first point of contact for complaints
\nsubmitted to the AIC. Briefly, the Regulations
\npermit the Counsellor to deal directly with
\ncomplaints that warrant no more than a practice
\nsanction. A practice sanction is applicable when
\nthere has been a breach of the AIC\u2019s Bylaws,
\nRegulations, policies or CUSPAP, with examples
\nincluding invalid insurance, and not being prop-
\nerly registered in the co-signer registry or in the
\nfee\/non fee category. More serious complaints <\/p>\n
requiring a conduct sanction, however, would
\nnormally be referred directly to the Investigat-
\ning Committee or to the AIC\u2019s Professional
\nPractice Advocate.<\/p>\n
As part of the process, the member is
\nexpected to cooperate fully with the Counsellor,
\ntypically through a verbal interview process and\/
\nor through written replies to the Counsellor\u2019s
\ninquiry. Ultimately, it is the Counsellor who deter-
\nmines the outcome and, on consent, imposes the
\nappropriate practice sanction where appropriate.
\nA significant benefit of the process is that files
\nhandled exclusively by the Counsellor generally
\nresult in reduced processing times.<\/p>\n
Following a different stream, a complaint
\ncan also be referred to the Professional
\nPractice Advocate and, should it warrant only
\na practice sanction, a similar process to that
\ninvolving the Counsellor would result. Again,
\nmember attendance would not be necessary;
\nrather, the process could be accomplished
\nthrough oral and\/or written inquiry with the
\ncommunications ultimately leading to the
\nimposition, on consent, of the appropriate
\npractice sanction.<\/p>\n
For files that ultimately find their way to
\nadjudication, the Regulations permit the AC\u2019s
\nHearing Panel to hold any combination of
\nelectronic, teleconference, oral or written
\nhearings, with provision to permit calling and
\nexamining witnesses, presenting evidence and
\nsubmissions and conducting cross examination.
\nTherefore, it is apparent that activities typically
\ntaking place during an in-person hearing can
\nfrequently be accommodated within the scope
\nof a teleconference hearing, provided advance
\narrangements have been made. However,
\nby their very nature, hearings conducted via
\nwritten communication can generally accom-
\nmodate only those situations where matters are
\nrelatively straight-forward and direct, without
\nthe need for back-and-forth dialogue. <\/p>\n
In these ways, by acknowledging and
\nresponding to those situations where personal
\nattendance of members is not absolutely essen-
\ntial, the AIC\u2019s new Regulations serve to streamline
\nthe AC hearing process. Notwithstanding these
\nefforts to address logistical difficulties with
\nin-person hearings, an adjudication hearing is
\na serious matter and an integral component of
\nAIC\u2019s professional practice process. Accordingly, a
\nmember\u2019s personal attendance at these hearings
\nis always the preferred option. <\/p>\n
\u201cAn adjudication hearing
\nis a serious matter and <\/p>\n
an integral component of
\nAIC\u2019s professional practice <\/p>\n
process. Accordingly,
\na member\u2019s personal
\nattendance at these <\/p>\n
hearings is always the
\npreferred option.\u201d<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 29<\/p>\n
Knowing when to say NO<\/p>\n
F<\/p>\n
Robert Patchett
\nLL.B, CD, AIC Counsellor, <\/p>\n
Professional Practice<\/p>\n
From the Counsellor\u2019s Desk<\/p>\n
rom time to time, we are all called upon
\nto deny a request \u2013 whether it is telling
\na child that there will be no dessert <\/p>\n
unless the broccoli is eaten, turning down an
\ninvitation to dine out with friends, or having to
\nforgo attendance at an event. In the office, you
\nwill be obligated to say no in cases where there
\nare potential conflicts of interest. What is spoken
\nof less often is the occasional need to say no to a
\nclient \u2013 particularly a good client.<\/p>\n
Ideally, the decision to turn down a client
\nwould be due to your being too busy to take
\non new work or because you have a vacation
\nplanned and could not start a new project for
\nseveral weeks. However, the reality of the current
\neconomic climate might make it more difficult to
\nsay no to potential work, as you may not be as
\nbusy as you were during the heady days of the
\nreal estate boom market.<\/p>\n
If you are experiencing a quiet period in your
\nbusiness, it might be the ideal opportunity to
\ndevelop new business clients, broaden your skill
\nset, and read a book. Human Resources and Skills
\nDevelopment Canada reports that many profes-
\nsionals use a downturn in their market to return to
\nschool to acquire new skills, and to look for new
\nmarkets and opportunities for their products. The
\nbuggy whip from the horse and buggy days is still
\nbeing made today and continues to have a niche
\nmarket, even though we all drive an automobile.<\/p>\n
In the book The Power of a Positive No: How to
\nsay No and Still Get to Yes, William Ury1 suggests
\nthat, in order to be able to say \u2018YES,\u2019 at times you
\nhave to say \u2018NO.\u2019 It is what he describes as the \u2018YES, <\/p>\n
NO, YES?\u2019 approach. Ury gives readers a strategy
\nto avoid situations where they reluctantly take on
\nobligations by saying yes and then feel resentful
\nfor doing so. He helps readers have the conviction
\nto say \u2018NO\u2019 when they really mean \u2018NO,\u2019 and to take
\nthe next leap of offering the requestor a \u2018YES?,\u2019 so
\nthat turning him down is still framed as a positive
\nexperience of accepting his offer.<\/p>\n
With Ury\u2019s \u2018YES, NO, YES?\u2019 technique, the first
\n\u2018YES\u2019 is followed by your contemplation of what is
\nin your best interest and your consideration of what
\nyou want to protect with by saying \u2018NO.\u2019 Thus,
\nwhen you say \u2018NO,\u2019 it is founded on something of <\/p>\n
importance that you value and the person receiving
\nyour \u2018NO\u2019 understands you are not rejecting him,
\nbut honoring something you value instead. After
\nproviding your listener with a firm and respectful
\n\u2018NO,\u2019 you suggest an alternative which becomes
\nyour \u2018YES?\u2019 In other words, you make a suggestion
\nthat another solution be considered. <\/p>\n
If it is applied to appraisal practice, you, as the
\nappraiser, would like to receive assignments from
\nyour clients on reasonable terms including a fair
\nfee, and with the necessary time to complete the
\nassignment competently and professionally. How-
\never, competition from peers, non-appraisers and
\nintermediaries in the collateral valuation process
\nmay be creating artificial pressures to lower fees
\nor speed up turn around times. The one size fits all
\ndoes not work, therefore, you may have to say,
\n\t\t\u2022\t\u201cYES\u201d\tI\twould\tlike\tto\ttake\ton\tthat\tassignment,
\n\t\t\u2022\t\u201cNO\u201d\tit\tcannot\tbe\tdone\tthat\tfast\tfor\tthat\tfee.
\nThese are my reasons \u2013 \u201cYES?\u201d The consumer
\nwill say that I am not a professional if I fail
\nto inspect, spend only five minutes, or fail to
\nconsider all the improvements. The appraisal
\nreviewers will say the adjustments make no
\nsense without a more detailed explanation. <\/p>\n
Without doubt, we all like to say \u2018YES\u2019 when
\nwe can. The challenge in human nature is to
\nknow when to say \u2018NO\u2019 and to deliver it so that
\npeople understand that you mean it. Saying \u2018YES\u2019
\nwhen you really mean to say \u2018NO\u2019 delays the
\nproblem, but does not make it go away. So, next
\ntime your client says, I need it tomorrow, just say
\n\u2018NO\u2019 by saying \u2018YES, NO, YES?\u2019 Ury\u2019s book and
\nothers on interest-based negotiation are recom-
\nmended reading to refine your own negotiation
\nskills and to learn how to apply them. <\/p>\n
end notes
\n1 The Power of a Positive No: How to Say No and Still Get to Yes, <\/p>\n
William Ury, published by Bantam Books 2007<\/p>\n
\u201cThe challenge in human
\nnature is to know when <\/p>\n
to say \u2018NO\u2019 and to
\ndeliver it so that people <\/p>\n
understand that you
\nmean it.\u201d<\/p>\n
No \u2013 adverb (a negative used to express dissent,
\n denial, or refusal, as in response to a question or <\/p>\n
\u2013 verb (used with object) to reject, refuse
\n approval, or express disapproval of.<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada30<\/p>\n
Write once, write right
\nHow to successfully complete
\nthe applied experience written
\nexamination<\/p>\n
By Duane Bates, AACI, P. App., Member, Learning Advisory Committee
\nLearning Advisory<\/p>\n
etting to the stage of writing the
\napplied experience exam requires
\nexceptional time and hard work. As <\/p>\n
such, Candidates should not take this exam lightly
\nand must ensure they are appropriately prepared
\nfor this challenge. This article details the steps that
\nCandidates should consider to confidently and
\ncompetently promote successful achievement.<\/p>\n
What is being examined?
\nBefore you start preparing, think about what is
\nbeing asked of you throughout this exam. It is your
\nopportunity to show the marker that you have
\nacquired sufficient experiences and competencies
\nthrough guided mentorship, such that you can
\napply the First Principles of Value appropriately in a
\ngiven situation.<\/p>\n
This exam is not one you can study for from
\na text book. Therefore, before you apply to write
\nthis exam, ask yourself whether or not you have
\nattained sufficient experience to successfully write
\nit. Ask your mentor for an honest opinion, because
\nit is better that you gain more experience first than
\nlearn of this need through failure. <\/p>\n
How to prepare for the exam
\nAIC has prepared several online tools to help
\nCandidates prepare for the applied experience
\nexamination:
\n\u2022\t The\tRevised\tEdition\tof\tFirst Principles of Value
\n\u2022\t Sample\tCRA\tand\tAACI\tApplied\tExperience\tExam
\n\u2022\t Sample\tGrading\tSheet\tand\tMarking\tCriteria
\n\u2022\t Tips\tfor\tWriting\tthe\tExamination
\n\u2022\t Exam\tWriting\tStrategies
\nThe AIC Applied Experience Written Examination <\/p>\n
web site can be found at: http:\/\/www.aicanada.ca\/
\ncmsPage.aspx?id=164<\/p>\n
The UBC Real Estate Division\u2019s web site also
\nsummarizes these resources at: www.realestate.
\nubc.ca\/aeexam<\/p>\n
You cannot study for this exam as you would
\nfor a regular course exam, but you can prepare.
\nReview the First Principles of Value very closely,
\nand be prepared to speak to each with reference to
\nyour own value-related experiences. Refer to the
\nsample exam questions so that you know what
\nto expect, and read the sample exam in advance
\nso that you do not have to read the instructions
\nduring the exam time. Think of good examples
\nfrom your work experience that highlight challeng-
\ning problems related to one or more First Principles,
\nand structure answers that discuss them \u2013 this
\nwill help you become familiar with the logic and
\nstyle of answer required, and you may be able to
\nuse these examples on your exam. Ensure that you
\nknow the address or can adequately describe the
\nlocations of these examples. <\/p>\n
How to write the exam
\nefficiently and effectively
\nYou have talked to your mentor, you have suf-
\nficient experience required to tackle the exam,
\nyou have reviewed the First Principles of Value,
\nyou went through the sample exam so you
\nknow what kind of questions to expect, and,
\nmost importantly, you looked at the grading
\nsheet and criteria for the allocation of marks.
\nNow what? <\/p>\n
Have a mental plan in place for how you will
\napproach the exam. Some points to keep in mind:<\/p>\n
\u2022\t Equate marks with time available and words
\nrequired: The exam is three hours \u2013 allot your
\ntime accordingly. You have one case study and
\nthree work experience questions to answer. You
\nhave read the marking guide, so you know how
\nthe grading is weighted \u2013 if you have a 40-mark
\nquestion, you should be allotting roughly 72
\nminutes for that portion of your exam. If you
\nfinish after an hour of writing, you may want to
\nreview your answers to ensure there is enough
\ncontent to justify the 100 marks. Ensure your
\nwork experience examples give enough detail
\nfor the marker to identify the specific property
\nand understand the scenario being described.<\/p>\n
\u2022\t Get easy marks first: Answer first the questions
\nthat you find the easiest. This will help your
\nconfidence, calm you down, and may even give
\nyou extra time to tackle the more challenging
\nquestions later on in the exam.<\/p>\n
\u2022\t No marks if we cannot read it: write legibly! We
\nrealize it is three hours of writing, but you must
\nensure that you write legibly and preferably with
\na pen (leave the pencils at home; you can cross
\nthings out and use additional exam booklets if
\nneeded). Remember, if the marker cannot read
\nyour writing, the chances of receiving a success-
\nful grade are reduced dramatically.<\/p>\n
\u2022\t Answer the question \u2013 no more, no less: Read
\neach question fully. You will receive no marks for
\nanswers to questions that are not being asked.
\nThis cannot be stressed enough \u2026 READ THE
\nQUESTION. <\/p>\n
\u2022\t Paint a picture, not a sketch: When asked to
\ndescribe a property, do not be vague in your
\nanswer. For example, \u201cA house with a basement <\/p>\n
G<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 31<\/p>\n
on a quiet street,\u201d will get you zero marks. A
\nmore appropriate response would be, \u201cA 1,200
\nsquare foot 1970s bungalow, with full-finished
\nbasement, located at the NW corner of Main
\nand Fraser Streets, Woodpile, Saskatchewan.
\nNeighbouring and adjacent properties are similar
\nin age in utility. Middle and high school are
\nwithin walking distance, transit is available on
\nthe corner, neighbourhood strip mall with 12
\nunits one block away. Neighbourhood is stable
\nand considered to have average demand. Pricing
\nlevels have been stable for the last year due to
\nstable local economic conditions.\u201d <\/p>\n
You have to paint a picture for the marker, realizing
\nthat we likely come from a different part of Canada
\nthan you. For property location, if you cannot
\nremember the address, then give a description \u2013
\nthe marker must be able to tell that it is real, not a
\nhypothetical example.
\n\u2022\t Explain your assumptions: Assumptions are <\/p>\n
acceptable and expected when answering the
\ncase study portion of the exam, as long as they
\nare reasonable and kept in perspective of the
\nsituation being addressed. If the case study
\nindicates there has been no market activity in
\nthe area, do not respond by assuming that you
\nhave adequate sales in the area to support an
\nestimate of market value. Assumptions should
\nnot be used as a crutch to easily get through
\nthe case study; this will return a failing grade.
\nFor example, saying, \u201cHighest and best use
\nis assumed to be the current use\u201d without
\nexplanation equals zero marks. You must explain
\nto the marker the steps you would take to arrive
\nat that conclusion.<\/p>\n
\u2022\t Give answers, not questions: Do not answer the
\ncase study question with more questions, this
\nwill likely result in a failing grade. Asking a string
\nof erroneous questions does not demonstrate
\nto the marker that you have logically thought
\nthrough the First Principles of Value to arrive at a
\nconclusion for the situation presented.<\/p>\n
\u2022\t Appropriate work examples: Your work experi-
\nence examples should be appropriate for your
\nlevel of experience. If you are writing the CRA
\nexam, then avoid work examples of properties
\nthat do not conform to the CRA limitations. As a
\nCRA Candidate, if you discuss properties beyond <\/p>\n
the CRA\u2019s limitations, then be cautious to explain
\nthe limitations of your role and where additional
\nassistance was required. Otherwise, it is a breach
\nof professional ethics. <\/p>\n
\u2022\t Cautious terminology: Avoid slang terms, acro-
\nnyms, and improper terminology. For example: <\/p>\n
– In Canada, we use CUSPAP, not USPAP;
\n – If you are describing a retrospective report, do <\/p>\n
not call it a retroactive report;
\n – AIC uses market value, not fair market value <\/p>\n
(an accounting term);
\n Avoid using acronyms in your examples, as <\/p>\n
markers are from various regions of Canada and
\nmay be unfamiliar with the terms, e.g., Accred-
\nited Municipal Assessor of Alberta (AMAA),
\nProperty Assessment Appeal Board (PAAB), etc.<\/p>\n
\u2022\t Answer everything: Try and get an answer down
\nfor all questions. If you miss answering one of the
\nwork experience examples due to lack of time,
\nit leaves little margin for error to pass the exam,
\ngiven the minimum total pass mark of 70%
\nneeded on both case study and work experience.<\/p>\n
\u2022\t Be general and comprehensive: When answer-
\ning the case study portion of the exam, avoid
\nanswering it solely from the specialized or lim-
\nited perspective of your current job. Explaining
\nto the marker that you need not be concerned
\nwith market value because of assessment law
\nin your province will undoubtedly not cover all
\nFirst Principles of Value. Answer the ques-
\ntion from a wider, more general, and more
\ncomprehensive perspective.<\/p>\n
\u2022\t Consider Point Form: To best answer the case
\nstudy, you must work through all of the First
\nPrinciples of Value. Using expanded point form
\nto go through each principle can be an efficient
\nand effective way of ensuring you are covering
\nall aspects of the case study.<\/p>\n
\u2022\t \u2018I\u2019 not \u2018we\u2019: Be careful about the \u2018team\u2019
\napproach \u2013 when answering the work
\nexperience example questions, explain to
\nthe marker what \u2018you\u2019 did, not what \u2018we\u2019
\ndid. This does not preclude teamwork, but
\nyou must tell what you did in that team to
\naddress the First Principle being described. <\/p>\n
\u2022\t Explain\tsuitability:\tThere\tare\tthree\tparts\tto\tthe
\nwork experience question: description, suitability
\nand details. The second part is easily overlooked, <\/p>\n
but, if answered appropriately, it segues nicely
\ninto the details of the example.<\/p>\n
Answer the 5 W\u2019s and do not forget the H
\nFinally, keep in mind these last few important
\npoints for success:
\n\u2022\t Answer\tthe\twho, what, when, where, why, and <\/p>\n
do not forget the how. At the end of the day, the
\nhow is what the marker is looking for. How did
\nyou determine highest and best use, how did
\nyou find market evidence to justify the adjust-
\nment made, how did you analyze the economic
\nvariables of the situation, how did you ensure
\nthat you reviewed all possible legal issues that
\ncould have an effect on your estimate of market
\nvalue, how did you ensure the property rights
\nwere those of the fee simple\u2026.and so on. <\/p>\n
\u2022\t Make\tit\teasy\tfor\tthe\tmarker\tto\tlogically\tgo
\nthrough your exam and understand how you
\nhave related everything back to the First Prin-
\nciples of Value. Keep the verbosity in check. For
\nexample, \u201cIt is assumed that the property rights
\nappraised are those of the fee simple interest.\u201d
\nDo not go into an elaborate dissertation on the
\nconcept of the Bundle of Rights if unnecessary.<\/p>\n
\u2022\t Last,\tbut\tnot\tleast,\tremember\tyou\tare\tputting
\nforward a professional argument for review and
\nexamination. Do not assume the marker knows
\nwhat you are trying to say, tell the marker what
\nyou are saying. Logic of argument, composition
\nof material and rationale behind assumptions
\nall play a factor. Writing clearly, logically, and
\nthoroughly without being long-winded and
\nrepetitious will serve you well in presenting a
\nwell-written exam. <\/p>\n
Learning Advisory committee
\nDavid Highfield, AACI, P. App. \u2013 Chair
\nApril Green, Candidate
\nSuzanne de Jong, AACI, P. App.
\nWayne Kipp, AACI, P. App.
\nvikki Leslie, Qualifications Officer, AIC – ON
\nCharles Abromaitis, AACI, P. App.
\nDuane Bates, AACI, P. App.
\nDavid Shum, AACI, P. App.
\nTo contact this committee email:
\nlac@aicanada.ca<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada32<\/p>\n
Spotlight on Continuing Professional Development<\/p>\n
T<\/p>\n
Learning Advisory<\/p>\n
he UBC Real Estate Division continues its series of live, online, web-
\nbased seminars or webinars on Friday, December 4, 2009, from 8
\nam-10 am Pacific time (11 am-1 pm Eastern time). These CPD Fridays <\/p>\n
webinars consist of a two-hour presentation with an expert instructor,
\nwho will present an interactive online classroom session and answer any
\nquestions you may have. By attending the session and completing two
\nhours of pre-reading on your own, you will receive four AIC CPD credit hours.
\nThere is no quiz or exam required to receive these credits.<\/p>\n
In this article, we highlight two upcoming webinars in the UBC Real
\nEstate Division\u2019s CPD Fridays series \u2013 Feed Your Future!<\/p>\n
cpD 111: Decision Analysis
\n\u2013 Making better real property Decisions
\nPresented December 4, 2009 by Bruce Turner, AACI, P. App. <\/p>\n
This course is the second in a series of three professional development
\ncourses adapted from the UBC Real Estate Division\u2019s BUSI 460 course: Critical
\nAnalysis and Forecasting in Real Estate. <\/p>\n
The first course in this series, CPD 110: Creative Critical Thinking –
\nAdvancing Appraisal to Strategic Advising, establishes the creative critical
\nthinking foundation necessary for effective client service in real estate
\nconsulting. CPD 111 advances this further, helping appraisers move from
\nvaluation technician to strategic advisor. In this course, the focus turns to
\ndecision analysis and how this can help clients and employers make better-
\ninformed real estate decisions. <\/p>\n
The specific goals of this course are to enable the participant to:
\n\u2022\tCritically\tanalyze\tthe\tcontext\tfor\treal\testate\tproblems.
\n\u2022\tAccurately\tdiagnose\tcomplex\treal\testate\tproblems.
\n\u2022\tIdentify\tand\tsupport\tpotential\treal\testate\tsolutions,\tgoals,\tand\tactions\t\t<\/p>\n
that are objective and comprehensive, facilitating sound decision-
\n making by clients.<\/p>\n
There are various methods of decision-making, some informal and some
\nformal. For example, following intuition or a \u2018rule of thumb\u2019 can be perfectly
\nappropriate in some circumstances. Other situations may need a more
\nsystematic analysis of alternatives that best align with the client\u2019s objectives
\n\u2013 this more formal process is termed \u2018decision analysis.\u2019 <\/p>\n
The first step in decision analysis is to frame the decision, getting to the
\nheart of exactly what problem your client actually needs to solve. Once the
\ndecision is framed, then decision analysis techniques can offer a systematic
\napproach to making better decisions \u2014 \u2018better\u2019 in the sense that they
\nare based on logic, consider all available data, and evaluate all possible
\nalternatives, generally with some form of quantitative approach.<\/p>\n
Decision trees are one example of a tool that helps clients better choose
\nbetween a number of complex alternatives. Decision trees help answer the
\nfollowing questions:<\/p>\n
\u2022\tWhat\tare\tthe\tkey\tuncertainties?
\n\u2022\tWhat\tare\tthe\tpossible\toutcomes\tof\tthese\tuncertainties?
\n\u2022\tWhat\tare\tthe\tchances\tof\toccurrence\tof\teach\tpossible\toutcome?
\n\u2022\tWhat\tare\tthe\tconsequences\tof\teach\toutcome?<\/p>\n
It is crucial to understand key factors in uncertain events and to estimate
\nthe likelihood and consequences of various possible outcomes. In doing so,
\nthe decision maker must always question potential influence of bias or other
\ndecision-making traps. <\/p>\n
In summary, CPD 111 will build on CPD 110\u2019s creative critical thinking
\nmindset so that you can add value by better helping to solve your clients\u2019
\nreal estate problems. This will entail being aware of your client\u2019s context
\nand environment, considering their needs and objectives, and then thinking
\nthrough decisions strategically towards meeting their needs. <\/p>\n
As a final step, the course will also explore how we can all better learn
\nfrom our experiences.<\/p>\n
EXPERIENCE IS INEvITABLE; LEARNING IS OPTIONAL<\/p>\n
FEED YOUR FUTURE
\nwith CPD FRIDAYS<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 33<\/p>\n
cpD 114: Valuation for financial reporting
\n\u2013 real property Appraisal and ifrS
\nPresented December 4, 2009 by John Peebles, AACI, P. App. <\/p>\n
In this follow-up to the very successful June 2009 presentation on this
\nsubject, we will introduce participants to what International Financial
\nReporting Standards (IFRS) means for real property valuation and, at the
\nsame time, provide an update on events during the past year since this initial
\npresentation.<\/p>\n
On January 1, 2011, IFRS will replace Canada\u2019s current Generally Accepted
\nAccounting Principles (or GAAP) for publicly accountable profit-oriented
\nenterprises. In other words, December 31, 2010 will be the last day of
\nfinancial reporting under Canadian GAAP for many organizations. <\/p>\n
A number of influential appraisers are saying that IFRS adoption in
\nCanada brings with it a potential for an expanded scope of real property
\nvaluation and consulting work, starting as early as 2009. Entities preparing
\nfor IFRS in 2011 are beginning to secure valuation services in 2009 \u2013
\nmeaning appraisal firms that are ready, willing, and able to take on IFRS-
\nrelated work are already experiencing an expansion in their scope of work.<\/p>\n
This course answers questions about how IFRS may impact the
\nCanadian appraisal community, in particular, those who practice in the
\nfield of industrial, commercial, and investment (IC&I) property valuation
\nand consulting. After completing this course, participants should be able to
\nanswer these questions:<\/p>\n
\u2022\tWhat\tis\tthe\tlikely\tvolume\tof\tnew\tvaluation-related\twork\tcoming\tsoon?
\n\u2022\tHow\tsignificant\tis\tthe\topportunity\tfor\texpansion\tof\tmy\tclient\tbase\tand
\nservices offered?
\n\u2022\tWhat\tcan\tindividual\tappraisers\tand\tthe\tAIC\tdo\tto\ttake\tadvantage\tof\tthis
\nopportunity and avoid the threats?
\n\u2022\tIf\tI\tpractice\tas\tan\tinstitutional\tappraiser,\thow\twill\tIFRS\timpact\tmy
\norganization and my valuation related activities?<\/p>\n
One potential threat is a significant shortfall in trained, experienced
\nappraisers who are qualified and capable to meet this demand. This should
\nbe a \u2018wake-up\u2019 call for the appraisal profession \u2013 start preparing for the
\nadoption of IFRS now! Because, if the demand for IFRS valuation materializes
\nand the appraisal profession cannot respond, others will.<\/p>\n
The lesson closes with a series of opinions from valuation professionals
\nwho are currently preparing for IFRS. These valuation professionals share
\ntheir views on the business opportunities, challenges, and practice issues
\nappraisers may face in the next two years as Canadian business and
\ngovernment prepares for the transition to IFRS. <\/p>\n
While this course will provide participants with a baseline understanding
\nof the role of IFRS, it will also prepare them to deal with future more
\npractice-specific courses that are currently in planning. Looking beyond,
\nthe UBC Real Estate Division and Appraisal Institute of Canada will develop
\nfurther learning materials on this subject once more information becomes
\navailable on IFRS implementation in Canada. For example, we anticipate
\ndeveloping a series of case studies that illustrate the practical application of
\nnew and adaptive valuation processes to meet the requirements for financial
\nreporting of real estate values. <\/p>\n
upcoming CPD Friday webinars:
\n\u2022\tFriday,\tDecember\t4,\t2009:
\n – CPD 114: valuation for Financial Reporting \u2013 Real Property Appraisal and IFRS
\n – CPD 111: Decision Analysis \u2013 Making Better Real Property Decisions
\nFor more information on these and other UBC CPD offerings, please visit our
\nwebsite: www.realestate.ubc.ca\/webinar or www.realestate.ubc.ca\/cpd <\/p>\n
For more information contact Notarius at
\n514-281-1442 or toll free 1-800-567-6703<\/p>\n
http:\/\/www.notarius.com<\/p>\n
N o t a r i u s \u2019 d i g i t a l s i g N a t u r e<\/p>\n
t h e o f f i c i a l s i g N a t u r e a N d t h e e l e c t r o N i c
\ns e c u r i t y s e a l f o r P r o f e s s i o N a l s M e M b e r s o f :<\/p>\n
Ordre
\ndes ing\u00e9nieurs<\/p>\n
du Qu\u00e9bec<\/p>\n
S e r v i n g p r o f e s s i o n a l s<\/p>\n
For more information contact Notarius at
\n514-281-1442 or toll free 1-800-567-6703<\/p>\n
http:\/\/www.notarius.com\/en\/clientele_ICDE_en.html<\/p>\n
NO T A R I U S\u2019 D I G I T A L S I GNA T U R E<\/p>\n
T H E OF F I C I A L SI GNA T U R E AND T H E EL E C T R ONI C
\nSE C U R I T Y SE A L F O R PR O F E S S I ONA L S MEMB E R S O F:<\/p>\n
Ordre
\ndes ing\u00e9nieurs<\/p>\n
du Qu\u00e9bec<\/p>\n
S e r v i n g p r o f e s s i o n a l s<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada34<\/p>\n
Designations\/Candidates\/Students<\/p>\n
The Appraisal Institute of Canada (AIC), together with the provincial associations and the provincial bodies affiliated with the AIC, commend the following
\nmembers who completed the rigorous requirements for accreditation as a designated member of the AIC during the period July 11, 2009 to Oct 13, 2009:<\/p>\n
L\u2019Institut canadien des \u00e9valuateurs (ICE), en collaboration avec les associations provinciales et les organismes provinciaux affili\u00e9s \u00e0 l\u2019ICE, f\u00e9licitent les membres
\nsuivants qui ont compl\u00e9t\u00e9 le programme rigoureux d\u2019accr\u00e9ditation \u00e0 titre de membre d\u00e9sign\u00e9 de l\u2019ICE durant la p\u00e9riode du 11 juillet au 13 octobre, 2009:<\/p>\n
AIC designations granted \/ D\u00e9signations obtenues de l\u2019ICE<\/p>\n
Candidates \/ Stagiaires
\nAIC welcomed the following new Candidate members during the period July 11, 2009 to October 13, 2009:<\/p>\n
L\u2019ICE souhaite la bienvenue aux personnes suivantes qui ont joint les rangs des membres stagiaires durant la p\u00e9riode du 11 juillet au 13 octobre 2009:<\/p>\n
ALbertA
\nMark Berestiansky
\nSheena A. Kereliuk
\nTerence Kook
\nEdwin Lee
\nYvette Lee
\nAdrian S. Miller
\nGreg B. Moore
\nBrad Slomp
\nYang Wang<\/p>\n
britiSH coLuMbiA
\nShawn R. Anderson
\nCourtney Brooke Eyre
\nSong Jing
\nAdam Palmer
\nRavinder Singh Punia
\nRupinder Rai
\nTracy L. Shymko
\nGorka E. Zabala<\/p>\n
MAnitobA
\nJennifer Anderson <\/p>\n
noVA ScotiA
\nSean Lonar
\nJennifer Rafuse<\/p>\n
ontArio
\n Donna Aldridge
\nColin David Boyne
\nJames G. Burton
\nJared G. Coffell
\nAndrew J. Crook
\nRyan Gulyas
\nKeenan G. Lane
\nJeff Roy MacPhail<\/p>\n
Jeffrey Charles McDowell
\nCynthia L. Morey
\nTramy Thi Nguyen
\nRyan Richard Parker
\nFrazer S. Pearson
\nMark E. Pruefer
\nKitch Russell
\nAndrew valyi
\nPrakash venkat
\nMaithel Lee Wilson
\nKent Wong
\nMark Andrew Zuccon <\/p>\n
Students \/ \u00c9tudiants
\nThis category of membership serves as the first step on the path to designation for those completing their requirements for Candidate membership.
\nStudents considering the appraisal profession as a career option are also welcomed to this category of membership.<\/p>\n
Cette cat\u00e9gorie de membre constitue la premi\u00e8re \u00e9tape sur la voie de la d\u00e9signation pour ceux qui s\u2019affairent \u00e0 compl\u00e9ter les exigences de la cat\u00e9gorie de membre stagiaire.
\nLes \u00e9tudiants qui contemplent une carri\u00e8re comme \u00e9valuateur professionnel sont bienvenus \u00e0 joindre cette cat\u00e9gorie de membre.<\/p>\n
SASkAtcHeWAn
\nJimmy Cheung <\/p>\n
internAtionAL
\nTania N. Wardle <\/p>\n
Accredited Appraiser Canadian Institute
\nWe welcome and congratulate these individuals as fully accredited members of the
\nInstitute through the granting of their AACI, P. App. designation.
\nAccueillons et f\u00e9licitons comme membres pleinement accr\u00e9dit\u00e9s de l\u2019Institut et leur
\naccordons avec fiert\u00e9 la d\u00e9signation AACI, P. App.<\/p>\n
ALbertA
\nGary P. Swanson <\/p>\n
britiSH coLuMbiA
\nStephen M. Blackloc
\nEllaina Laliotis
\nMegan J. McFarlan
\nMeng Mandy Zhao <\/p>\n
neW brunSWick
\nJason R. White <\/p>\n
AACI, P. App<\/p>\n
ontArio
\nJustin C. Chiarotto
\nEdward J. Galka
\nPhilippe R. Hebert
\nDan S. Laven
\nDavid R. Leathem
\nPeter J. Spivey
\nJason Stipancic
\nMaria Surina <\/p>\n
Quebec
\nMaxime Fournier <\/p>\n
CRA<\/p>\n
ALbertA
\nStacy A. Cooper
\nKeely Migchels
\nDonna Simmers
\nPrabhdeep Singh<\/p>\n
britiSH coLuMbiA
\nKristin N. Linquist
\nNathan Nottingham
\nChristineTraynor <\/p>\n
noVA ScotiA
\nRobert M. Gordon
\nRenee A. Walker<\/p>\n
Canadian Residential Appraiser
\nThese members are congratulated on the successful completion of the CRA designa-
\ntion requirements.
\nNous f\u00e9licitons ces membres pour avoir compl\u00e9t\u00e9 avec succ\u00e8s le programme menant \u00e0 la
\nd\u00e9signation CRA.<\/p>\n
nortHWeSt
\nterritorieS
\nDenis Alain <\/p>\n
Quebec
\nNicole Dubreuil
\nYves Kirouac
\nYann-Fr\u00e9d\u00e9rick
\n Lizotte-Nitka<\/p>\n
SASkAtcHeWAn
\nRobert J. Cantin
\nDarcy Huisman<\/p>\n
ontArio
\nCrystal L. Brum
\nThomas D. Cull
\nHeather A.Fuller
\nMonique v. Gillespie
\nAndrew B. Grace
\nSteve Johnson
\nAaron Wai Lun Kwong
\nPaul G. Martin
\nL. Darcy McPhail
\nAlison L. Ouimette<\/p>\n
britiSH coLuMbiA
\nAdam Kamal Naamani <\/p>\n
ALbertA
\nAllan Dale Colpitts <\/p>\n
neWfounDLAnD
\nWilliam W. Harbin<\/p>\n
MAnitobA
\nSheila L. Michalski
\nGary Page<\/p>\n
ontArio
\nRobert Biasi
\nShari Lynn Injic
\nJudy Lok
\nStefan H. Stefanov<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 35<\/p>\n
PRESIDENTIAL CITATIONS
\nThe Presidential Citation is awarded by the Institute to recognize, in a meaningful way, an individual or organization who has made a significant contri-
\nbution to the growth and enhancement of the appraisal profession. <\/p>\n
President, Sheila Young, AACI recently awarded Presidential Citations to the following AMC Task Force members: <\/p>\n
In presenting the citations, Sheila thanked each of the recipients for their specific contributions to completing their mandate and investigating
\nmember concerns on AMCs. Sheila also commended their dedication to the betterment of the profession and the Institute in particular.<\/p>\n
At the AIC-Manitoba AGM in early November, Sheila also presented a Presidential Citation to outgoing Investigating Committee Chair, John Hutchin-
\nson, AACI. John served several years on this committee and completed his term as Chair in June 2009. She also presented a Presidential Citation to Greg
\nWilkinson, AACI, who served as AIC\u2019s first AIC Special Investigator. This volunteer position was established in 2006 to provide independent investigation
\nof complaints submitted against members of the professional practice committees. <\/p>\n
News<\/p>\n
JACK WARREN
\nSCHOLARSHIP RECIPIENTS – 2009
\nThe Jack Warren Educational Trust Committee is pleased to announce the recipients of the
\n2009 scholarships. Congratulations go to Vi Thi Dang, AIC Candidate, North vancouver, BC;
\nAlex Messina, vancouver, BC; and Wendy Wood, AIC Candidate, Kelowna, BC, this
\nyear\u2019s recipients of the Jack Warren Education Trust Scholarship.<\/p>\n
The annual scholarships are available to individuals from across Canada pursuing careers in real estate appraisal. <\/p>\n
For more information or to obtain an official application form, please contact the Appraisal Institute of
\nCanada\t–\t\tBritish\tColumbia,\t#845\t\u2013\t1200\tWest\t73rd Avenue, vancouver, BC, (604) 266-8287, or visit our
\nwebsite www.appraisal.bc.ca: click on publications, brochures and the Jack Warren Educational Trust.<\/p>\n
AD HOC AMC TASK FORCE ON AMCS REPORT
\nAt its October meeting, the Appraisal Institute of Canada (AIC) Board of Directors received the report and recommendations from the Ad Hoc Task
\nForce and the following motions were passed:<\/p>\n
\u2022\t THAT\tthe\tBoard\treceives\tin\tconfidence\tthe\treport\tsubmitted\tby\tthe\tAd\tHoc\tTask\tForce\ton\tAppraisal\tManagement\tCompany\tIssues.
\n\u2022\t THAT\tthe\tBoard\trefers\tthe\trecommendations\tcontained\twithin\tthe\treport\tto\tthe\tappropriate\tcommittees.
\n\u2022\t The\tAIC\tcommittees\tare\tasked\tto\treport\tback\twith\tan\timplementation\ttimeline\tand\tbudget\tand\tany\tconcerns\tby\tMonday,\tJanuary\t25,\t2010.\t<\/p>\n
Where this is not possible, a submission timetable should be provided in lieu.
\n\u2022\t THAT\tthe\tAIC\tpresident\twill\trefer\tthe\treport\tto\tprovincial\taffiliate\tpresidents\tto\treceive\tthe\treport\tand\tto\tconsider\tthe\tlobbying\trecommendations\t<\/p>\n
contained therein.<\/p>\n
George Ward, AACI, Chair<\/p>\n
Dan Wilson, AACI<\/p>\n
Paula Malcolm-Schaller, CRA<\/p>\n
Dino Giuliani, AACI<\/p>\n
Richard Graves, CRA<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada36<\/p>\n
News<\/p>\n
2008-2009 BURSARIES AND AWARDS
\nOver the last several years, the Appraisal Institute of Canada (AIC) has introduced a series of academic awards that recognize the achievements of
\nstudents undertaking appraisal studies in programs delivered through AIC\u2019s partners in professional education. <\/p>\n
uniVerSity of britiSH coLuMbiA
\nAppraisal Institute of Canada Bursary
\nA bursary of $1,000 is offered by the Appraisal Institute of Canada to an undergraduate student specializing in the Real Estate Division of the Faculty
\nof Commerce and Business Administration. The recipient for 2008-2009 is Christopher Czorna, vancouver, BC. <\/p>\n
Appraisal Institute of Canada Prize
\nA\t$500\tprize\tis\tawarded\tannually\tto\tthe\tstudent\treceiving\tthe\thighest\tstanding\tin\tBUSI\t330\toffered\tby\tthe\tReal\tEstate\tDivision,\tSauder\tSchool\tof
\nBusiness. The 2009 winner is Bob Bickerton. <\/p>\n
uniVerSity of gueLpH
\nAppraisal Institute of Canada Scholarship
\n2009 marks the first year the Appraisal Institute of Canada has offered this $1000 scholarship to a student registered in the Real Estate and Housing
\nmajor of the Bachelor of Commerce degree program. This scholarship is awarded to a student who has completed at least 9.0 credits, but no more
\nthan\t12.5\tcredits\twith\ta\tminimum\t70%\taverage\tduring\tthe\tlast\ttwo\tfull-time\tsemesters.\tThe\twinner\tof\tthis\tyear\u2019s\tscholarship\tis\tKevin Bros.<\/p>\n
SenecA coLLege, toronto
\nAppraisal Institute of Canada Award
\nAn\tannual\taward\tin\tthe\tamount\tof\t$500\tis\tpresented\tto\ta\tgraduating\tstudent\tin\tthe\tReal\tProperty\tAdministration\tProgram\t(RPA),\twho\thas,\tin\tthe
\nopinion of a Seneca faculty panel, demonstrated academic excellence in RPA 112 and one or more of the additional AIC curriculum courses at the
\nCollege, and an active interest in the field of real property as a career, as well as made valuable contributions to the classroom environment.
\nThe 2009 award winner is Andrew Valyi, AIC Candidate, of Whitby, Ontario. <\/p>\n
Kevin Bros (R) receives his award from AIC President – Elect
\nGrant Uba, AACI, P. App.<\/p>\n
Andrew Valyi (L) receives his award from AIC Past-President
\nGeorge Maurice, AACI, P. App., Fellow.<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 37<\/p>\n
ASK NOT WHAT AIC CAN DO
\nFOR yOU, BUT WHAT yOU
\nCAN DO FOR yOURSELF AND AIC<\/p>\n
ON THE MOVE<\/p>\n
Roman
\nCherwonogrodzky,
\nCRA, SRA, a residential and
\ncommercial appraiser with IRR
\nResidential Appraisers & Consultants
\nin Houston Texas was recently
\nawarded the Appraisal Institute\u2019s 2009
\nAnglyn Award.<\/p>\n
Each year, a first-year participant
\nof AI\u2019s Leadership Development
\nand Advisory Council, who exhibits
\noutstanding participation in all
\nfour breakout sessions, is awarded
\nthe Anglyn Award \u2013 an award that
\nexemplifies leadership, integrity and
\ncontribution on the part of a first-year
\nparticipant.<\/p>\n
Houston-based Cherwonogrodzky
\nis the AI\u2019s unofficial \u2018ambassador\u2019
\nto Eastern Europe, including Russia
\nand the Ukraine. He is the Appraisal
\nInstitute of Canada\u2019s only non-
\nretired CRA with an SRA currently
\nworking and residing in the US.
\nHe is originally from Canada and
\nholds an associate\u2019s degree in urban
\nland economics from University of
\nBritish Columbia and a CRA from the
\nAppraisal Institute of Canada.<\/p>\n
Photo by O. Seniw<\/p>\n
The Appraisal Institute of Canada (AIC) has increasingly become the \u2018go to organization\u2019 among
\nreporters sourcing material for their appraisal related stories. Progressively more, AIC is receiving
\nmedia requests that our members provide their expertise on numerous issues for segments on Tv,
\nradio and in print.<\/p>\n
Joanne Charlebois, AIC Director, Marketing & Communications, has conducted media training
\nfor AIC\u2019s Board of Directors and, in conjunction with the Mont Tremblant conference, trained 21 AIC
\nmembers and Executive Directors.<\/p>\n
AIC is often required to call upon AIC designated members to respond to media inquiries from
\ncoast to coast. When the phone rings and AIC is calling to ask if you would be willing to represent
\nyour profession, are you ready? The following resources are available for AIC members on the
\nmember\u2019s only website at http:\/\/www.aicanada.ca\/cmsPage.aspx?id=295 :<\/p>\n
\u2022\t 6\tsteps\tfor\tidentifying\tkey\tpoints\tand\tusing\tthem\tappropriately
\n\u2022\t How\tto\tanswer\tdifficult\tquestions
\n\u2022\t 7\taxioms\tfor\tgiving\teffective\tinterviews
\n\u2022\t Focus\tyour\tattention\ton\tthe\trelevant\tkey\tpoints
\n\u2022\t How\tto\tprepare\tfor\tan\tinterview<\/p>\n
You may wonder WIFM (what\u2019s in it for me) to collaborate with AIC when called upon. In addi-
\ntion to promoting your profession, it is an opportunity to get exposure for yourself, which is a
\nform of business development. Your employer will also appreciate you raising your organization
\nor firm\u2019s visibility.<\/p>\n
Lora Wylie, CRA (ON), who recently collaborated with AIC, responded when asked: \u201cI do not
\nreally know what to expect, however, I do know that it is the kind of exposure the AIC members
\nhave been asking for and, as such, I am hoping it will give us a bit more presence in the public eye.
\nThanks\tagain\tfor\tthe\tkind\twords\tand\tI\twill\tdo\tmy\tbest\tto\trepresent\tAIC\tin\ta\tprofessional\u00a0light\u00a0on
\nthe HGTv segment.\u201d<\/p>\n
Being proactive with the media is a pillar of the AIC Marketing Plan. Further training sessions
\nare planned in conjunction with the AIC 2010 conference in victoria in early June. AIC members
\nwho wish to represent the appraisal profession and AIC when media wish to interview an AIC
\nmember, should contact Joanne at joannec@aicanada.ca.<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada38<\/p>\n
News<\/p>\n
IMPORTANT INFORMATION
\nCONCERNING PROFESSIONAL
\nLIABILITy INSURANCE<\/p>\n
Are you properly registered in the insurance program? If not, you may
\nnot be properly insured for the kind of work you are performing. <\/p>\n
All members of the Appraisal Institute of Canada (AIC) must participate
\nin the program in either the \u2018fee\u2019 or \u2018non-fee\u2019 member categories in
\naccordance with the type of work they do and the liability it attracts.<\/p>\n
A \u2018fee appraiser\u2019 means a member who renders \u2018professional
\nservices\u2019 on a fee-for-service basis. A professional service may be
\nprovided on a fee basis directly to a client or indirectly on behalf of an
\nemployer or a contractor to whom a fee is paid.<\/p>\n
\u2018Non-fee appraisers\u2019 are members who are salaried employees of
\npublic or private sector organizations and who provide \u2018professional
\nservices\u2019 to an employer for the internal use of the organization.<\/p>\n
The insurance policy defines \u2018professional services\u2019 as real estate
\nappraisal services including opinions and\/or counseling rendered by a
\nmember of the Institute who, at the time of providing the services, was
\nqualified and authorized to do so under the By-laws and Regulations of
\nthe Institute. <\/p>\n
Members who are providing and taking responsibility for
\n\u2018professional services\u2019 as described above, whether in the public or
\nprivate sector, full-time or part-time, directly or indirectly on a \u2018fee\u2019
\nbasis, must be registered as \u2018fee\u2019 members with respect to the AIC
\nprofessional liability insurance program and pay the appropriate
\ninsurance levies. <\/p>\n
Maintaining professional liability insurance is a key element for
\nany professional, where consumers expect their professionals to carry
\nadequate insurance, even if this is not an express term or condition in
\nyour contracts for professional services.<\/p>\n
The registration of membership class as either \u2018fee\u2019 or \u2018non-fee\u2019
\nfor insurance purposes is at the discretion of the members. This
\nhonour-based system requires members to declare annually whether
\nthey are \u2018fee\u2019 or \u2018non-fee\u2019 and pay the corresponding insurance levies.<\/p>\n
When you receive an invoice for the 2010 insurance program levy
\nfrom Martin, Merry and Reid, there will be information about the
\n\u2018fee\u2019 and \u2018non-fee\u2019 member categories. Please read this carefully and
\ncontinue on to the declaration section where you need to declare which
\ncategory you fall under by checking the appropriate box, signing the
\ndeclaration, and remitting the appropriate levies. It is essential that this
\nbe done correctly. <\/p>\n
If you have any doubt about your status as a \u2018fee\u2019 or \u2018non-fee\u2019
\nmember and need more information, please contact Martin, Merry and
\nReid at (416) 366-3333. <\/p>\n
IN MEMORIAM<\/p>\n
Les membres suivant de l\u2019Institut canadien des \u00e9valuateurs sont d\u00e9c\u00e9d\u00e9s.
\nAu nom de tous ceux qui oeuvrent de pr\u00e8s ou de loin au sein de l\u2019Institut
\net de la profession, nous exprimons nos plus sinc\u00e8res condol\u00e9ances \u00e0 les
\nfamilles, amis et associ\u00e9s.<\/p>\n
The following members of the Appraisal Institute of Canada have
\npassed away. On behalf of everyone connected with the Institute and
\nthe profession, we extend our sincerest sympathies to the families,
\nfriends and associates.<\/p>\n
chiu-yin chan, AAci, p. App
\n vancouver, BC
\nSadie Moranis, candidate
\n Toronto, ON<\/p>\n
pentti penttila, AAci, p. App
\n Sudbury, ON
\nHelen Harris, candidate retired
\n St. Catharines, ON<\/p>\n
CRITICAL DATES
\nThe following dates are provided as a reminder to Appraisal Institute of
\nCanada (AIC) members of critical dates throughout the year:<\/p>\n
December 24, 2009 \u2013 AIC Ottawa offices close for the holidays
\nfrom December 24-January 1 inclusive.<\/p>\n
December 31, 2009 \u2013 AIC designated members must have com-
\npleted and posted their minimum six annual CPD credits obtained
\nbetween January 1 and December 31, 2009. Random audits will take
\nplace in the early months of 2010.<\/p>\n
January 1, 2010 \u2013 Due date for payment of AIC insurance premiums.
\ne-invoices were sent November 6, 2009.<\/p>\n
January 1, 2010 \u2013 As of January 1, 2010, only experience gained
\nsince enrolment in the Applied Experience Program (AEP) will be con-
\nsidered valid for the purpose of obtaining the AACI or CRA designation.<\/p>\n
friday, January 22, 2010 \u2013 Deadline for article submission for next
\nissue of Canadian Property Valuation magazine<\/p>\n
friday, february 26, 2010 \u2013 Launch of AIC Conference online
\nregistration<\/p>\n
June 2-5, 2010 \u2013 AIC Annual Conference, victoria, BC<\/p>\n
friday, June 4, 2010\t\u2013\t\tAIC\tAGM\t\u2013\tVictoria,\tBC\t\u2013\t3:15\tpm<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 39<\/p>\n
any veteran apprais-
\ners contend that
\nappraising has never
\nbeen more difficult.
\nWith sales volume <\/p>\n
approaching non-existent and financing often
\nunattainable, appraisers face an unprecedented
\ntask in attempting to value real property in a
\nmarket that barely functions. The Art of Apprais-
\ning in a Recession, a recent Appraisal Institute
\nAtlanta Area Chapter symposium, brought
\ntogether five appraisal industry leaders to explore
\nthe hurdles confronting appraisers in their day-
\nto-day practices \u2013 and to offer solutions. <\/p>\n
What follows is a representative sampling of
\nthe questions posed and the responses offered
\nduring the April 2 symposium.<\/p>\n
Lack of comps
\nThe panel was consistent that a shortage of data
\nrequires becoming more flexible; even research-
\ners with the highest standards must sometimes
\nre-evaluate the distinction between what is
\npreferable and what is acceptable. <\/p>\n
Marlon Day, SRA, president of M L Day and
\nAssociates, Inc., offered his thoughts on this diffi-
\ncult dilemma as it pertains to residential appraisals:
\n\u201cThe first step that I take in solving the problem of
\nlimited or lack of availability of comparable sales <\/p>\n
is to review historical sales data for the particular
\nmarket. Oftentimes, the data will show a wealth
\nof sales activity that may have occurred outside of
\nyour typical search parameter of six to 12 months.
\nAnalyzing historical sales data and determining
\na reasonable market condition adjustment may
\npresent itself as a credible option when there are
\nno comparable sales available.\u201d<\/p>\n
Of course, using more dated transactions
\nheightens the importance of market conditions
\nadjustments and increases the importance of a deep
\nand thorough understanding of market trends and
\nchanges. \u201cIn conjunction with this method,\u201d Day
\nadds, \u201canalysis of current listings and interviews with
\nreal estate professionals within the particular market
\ncan provide the necessary support for the results of a
\nhistorical sales data analysis.\u201d<\/p>\n
John Cherry, MAI, CRE, managing director of
\nButler Burgher Group, recommends a similar tact
\nfor appraising commercial property, and suggests
\nexpanding the search of comparable sales to
\ninclude a longer time frame and a larger geo-
\ngraphic area. While making sense of less-than-
\nideal data can be difficult, market research from
\ninterviewing brokers, bankers, sellers, buyers and
\nother appraisers will help determine appropriate
\nmarket conditions and location adjustments. <\/p>\n
\u201cIn the case of literally no sales, the appraiser
\nmust consider that the subject highest and best <\/p>\n
use may not be a subdivision,\u201d reports Harris \u2018Bo\u2019
\nSimpson, MAI, CRE, in response to a question about
\nthe development of a subdivision. He adds that the
\nlack of competitive product in a given market should,
\nin itself, at least raise the question of feasibility. <\/p>\n
However, if a subdivision is believed to be a
\nreasonable form of the highest and best use, and
\nthere are no recent lot sales, Simpson recom-
\nmends that the appraiser extract retail lot prices
\nfrom nearby home sales (sometimes known
\nas a lot-contribution ratio analysis). \u201cThis may
\nrequire considerable research and judgement.
\nIn numerous markets, demand for higher priced
\nhomes is declining, and it is often reasonable
\nto conclude that subdivisions, once planned for
\nupper price points, will eventually be reintro-
\nduced at much lower prices. If this is true for the
\nsubject property, then a lower retail lot price will
\nalso be appropriate, and the projected absorption
\nschedule may be significantly different than for
\nthe original product planned. However, the net
\npresent value may actually be higher for a more
\nmoderately [i.e., lower] priced product.\u201d<\/p>\n
market research
\nIf older sales are to be considered, there are
\nsome tools or resources to help measure changes
\nin market conditions to develop and support
\nadjustments. The key to appraising in a reces-<\/p>\n
By Brad Carter, MaI; Sandra MCalISter WInter, MaI; and Carolyn Chen SaWyer, MBa<\/p>\n
the art
\nof appraISIng IN a <\/p>\n
recessIoN<\/p>\n
The following article originally appeared in Valuation magazine.
\nCopyright 2009. Appraisal Institute. All rights reserved. Reprinted with permission.<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada40<\/p>\n
sion is \u201cmore market research,\u201d reminds Cherry.
\nHelpful resources include personal interviews
\nwith brokers and other market participants on
\ncapitalization and discount rates, as well as trend
\nanalysis from investor surveys (such as those
\npublished by Korpacz, Realtyrates.com, Cushman
\n& Wakefield, Marcus & Millichap and CBRE), and
\npublished economic data (job growth, popula-
\ntion growth, etc.). He recommends keeping an
\nupdated library of data. The Appraisal Institute\u2019s
\nweb site and Lum Library are also excellent
\nresources for such data.<\/p>\n
Cherry says that first-hand market research
\nalso is needed to answer questions like, \u201cWhat is
\nthe absorption period in normal <\/p>\n
times? How long will it take to recover and return
\nto \u2018normal times?\u2019 What is the competition, both
\nexisting and under construction?\u201d His advice came
\nin response to how to appraise a mostly unoc-
\ncupied property when there is no leasing activity
\nand, therefore, no absorption rates at competitive
\nproperties to analyze.<\/p>\n
He also points out that a large supply
\nof product could result in a longer holding
\nperiod before a normalized rate of absorp-
\ntion can resume. Another important aspect is
\nthe \u201cwillingness of management to meet the
\nmarket,\u201d including the willingness to reduce
\nrent and offer more concessions. If manage-<\/p>\n
ment is prepared to be <\/p>\n
influenced by market forces and compete
\naggressively, this could mean an increase in
\nthe absorption rate. <\/p>\n
resIdeNtIaL
\nImpactINg commercIaL
\nThere is unquestionably a link between the
\nhealth of the housing market and demand for
\nsupporting commercial development, but it is not
\nalways easy to measure. According to Simpson,
\n\u201cFor years, the Appraisal Institute has encour-
\naged appraisers to incorporate fundamental
\nsupply and demand analysis into their work. This
\ninvolves taking demographic growth projections
\nand deriving conclusions for the demand for
\nreal estate products. I think the appraiser
\ntoday needs to be a student of
\neconomics if he or she <\/p>\n
WIth SaleS voluMe approaChIng <\/p>\n
non-exIStent and fInanCIng often <\/p>\n
unattaInaBle, appraISerS faCe an <\/p>\n
unpreCedented taSk In atteMptIng to <\/p>\n
value real property In a Market that <\/p>\n
Barely funCtIonS.<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 41<\/p>\n
is going to be able to understand and navigate
\nfinancial markets, human behaviour, market
\ntrends and ascertain the impact on real estate.\u201d<\/p>\n
Impact of forecLosures
\nIf it is a market where the only sales are from
\nbanks to investors, do those sales reflect \u2018market
\nvalue?\u2019 Market value is the most probable sales
\nprice a particular property can achieve in an
\nopen market between willing parties. \u201cTherefore,
\nif foreclosures represent the only (or majority of)
\ntransactions within a particular market, it would
\nbe reasonable to consider the transactions to be
\nreflective of market activity as of a specific date,\u201d
\nDay explains.<\/p>\n
Foreclosures bring downward pressure on
\nboth home and lot prices, Simpson says. <\/p>\n
\u201cAs long as foreclosures continue, buyer
\nexpectations will be influenced,\u201d he <\/p>\n
reasons. He cautions that apprais-
\ners must exercise judgement in <\/p>\n
determining whether bank sales
\nrise to the level of defining <\/p>\n
the market, but suggests
\nthat even those that do not
\ncould still be of interest.
\n\u201cEven a transaction that
\ndoes not meet all the
\ncriteria of \u2018market value
\ndefinition\u2019 could still
\ncontribute significantly <\/p>\n
toward defining the market
\nfor an asset,\u201d Simpson says. <\/p>\n
Day expressed similar sentiments on the
\nimpact distressed sellers have on all market par-
\nticipants: \u201cThere is generally a lack of willingness to
\npay more for a particular property when there is a
\ncomparable\/viable alternative offered for less.\u201d<\/p>\n
Historically, it would be proper to consider
\nthe possibility of a stigma when appraising a
\nproperty that has been advertised for foreclosure,
\nas evidenced by the fact that brokers were not
\nquick to publicize that a property listed for sale
\nwas in the hands of a lender. Today, however, some
\nassociation to a foreclosure is not a stigma. In fact,
\nbrokers use \u2018bank-owned\u2019 as a selling point.<\/p>\n
According to Paul Aase, MAI, CCIM, who
\nfocuses on special assets as director at Roberts
\n& Associates, properties in many markets must <\/p>\n
have something identifying them as distressed
\nassets just to draw attention from potential
\nbuyers. Given the wealth of properties available,
\nand the dearth of buyers willing and able to
\nexecute a transaction, purchasers do not need to
\nspend time with any seller they do not perceive
\nto be extremely motivated. This trend has
\nbecome so prevalent that traditional sellers have
\nbeen forced to represent themselves as being at a
\ndisadvantage. As evidence, Aase cites the numer-
\nous examples of properties being marketed as
\n\u2018pre-foreclosure\u2019 deals, as sellers try to convey
\nthat they are motivated enough to warrant a
\nbuyer\u2019s attention \u2013 even if they are not a bank.<\/p>\n
Another important point to consider is
\nexposure period. If a property is exposed to the
\nmarket for an extended period, can the value
\nexceed the highest offer? Does it really matter
\nwhat line of business the seller is in (such as
\nbanking), or how they acquired the property
\n(such as through foreclosure)? <\/p>\n
Citing the principal of substitution, Simpson
\nadds that, in many over-supplied areas, lender-
\nowned properties are actually defining the
\nmarket, as all other sellers must be price-com-
\npetitive to attract the limited buyers shopping
\nthe numerous alternatives. \u201cAgain,\u201d Simpson
\nadvises, \u201cthe appraiser needs to use some judge-
\nment in this area.\u201d<\/p>\n
coNcLusIoN
\nThe solutions the panel presented, based on their
\nday-to-day practices, not only offer guidance
\non solving challenging appraisal problems, they
\nfocus on what banks and review appraisers
\nlook for in times of recession. Users of appraisal
\nservices want to see that whatever limited data
\nis available has been properly analyzed, and that
\nthe appraiser has educated himself or herself
\nsufficiently through firsthand market research
\nsuch as personal interviews with brokers, buyers
\nand sellers. In a market that barely functions,
\nappraisers must be more flexible, perform more
\nmarket research and, of course, exercise careful
\njudgement. <\/p>\n
authors
\nbradley r. carter, MAi, cre, cciM
\nGreystone valuation Services, Inc. <\/p>\n
carolyn chen Sawyer, MbA
\nGreystone valuation Services, Inc. <\/p>\n
Sandra McAlister Winter, MAi
\nSunTrust Bank
\nPresident, Appraisal Institute
\n Atlanta Area Chapter
\nvice-Chair, Georgia Real Estate
\n Appraisers Board<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada42<\/p>\n
roperty owners, in association
\nwith one another, can choose <\/p>\n
to place restrictions on their
\nindividual property rights.
\nCommercial property owners <\/p>\n
may choose to do this as part
\nof a business improvement dis-<\/p>\n
trict; residential owners may act
\nthrough their homeowner\u2019s association <\/p>\n
or by vote of a strata council in a strata title com-
\nmunity.1 An important question for valuation is
\nwhether the imposition of restrictions affects the
\nmarket value of the units. The research presented <\/p>\n
here studies the effect of one particularly <\/p>\n
strong restriction: strata by-laws that forbid
\nowners of condominium units in the strata from
\nrenting their units. <\/p>\n
What effect rental restrictions should have
\non prices and values is not clear. Restrictions
\nreduce a potential investor\u2019s return, making a
\nunit in a building that forbids rental of lower
\nvalue to investors.2 This will push down market
\nvalues by reducing demand. On the other hand,
\nowner-occupiers might prefer a building with
\nrental restrictions, such that they would pay a
\npremium. First, if renters are perceived to be risky
\nor undesirable, then restricting them makes the
\nbuilding more attractive to owner-occupiers. <\/p>\n
Do restrictions
\non renting increase <\/p>\n
evidence from Vancouver*<\/p>\n
By Tsur somerville, Chris Kay, and seung Dong You<\/p>\n
condominium values?<\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 43Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 43<\/p>\n
value for a home being in such a community and
\nthe source of these effects, either from enhanced
\nsecurity, reduced traffic flow, or restrictive
\ncovenants that limit the risk of actions by one
\nhousehold having a negative effect on the value
\nof neighbouring houses. General effects for the
\npresence of an HOA range from Agan and Tabar-
\nrok\u2019s (2005)\tfinding\tof\ta\t5.4%\tpremium\tfor\thouses
\nin a community with an HOA to Hughes and Turn-
\nbull (1996), who find the price premium for being
\nin a community stricter covenants is between 2%
\nand 6%. The gated aspect itself adds 6% to value
\nin Bible and Hsieh\u2019s (2001) study. The findings in
\nthis research appear to be quite sensitive to the
\nlocation of the analysis. Two other studies have
\nfound much larger effects: Pompe (2008) finds an
\n18.6% premium for gated communities in beach
\nresorts, while LaCour-Little and Malpezzi (2001)
\nfind that in a St. Louis neighbourhood , house
\nprices are 26% higher in a gated community \u2013 17 <\/p>\n
percentage points from the presence of an HOA and
\nnine percentage points from the gate. The precise
\nrelevance of these studies of single-family housing,
\ntypically in more suburban locations for the valua-
\ntion of urban condominiums is not clear.<\/p>\n
Two studies have looked explicitly at restric-
\ntions in condominium units, though not at the
\nrestrictions on leasing that is the focus of our work.
\nAllen (1997) compares condominiums with and
\nwithout age restrictions in Florida and found that
\nbuildings that limit the occupancy to older residents
\nreceived a 20% premium to similar un-restricted
\nunits. Cannaday (1994) presents a simple model
\nthat suggests limited constraints are more valuable
\nto owners in a building than stricter constraints.
\nExamining a set of condominiums in Chicago, he
\nfinds that allowing cats only raises property values
\nby\t5.5%\trelative\tto\tforbidding\tpets\tentirely,\twhile
\nallowing dogs, either small or large, lowers values.
\nBoth of these effects are surprisingly large, given <\/p>\n
Second, if there is no benefit, why would owners
\nvote for these restrictions, which require a supra-
\nmajority\tof\t75%\tto\tpass?\t<\/p>\n
Transaction data on condominiums in
\nvancouver, BC and the adjacent suburbs of
\nRichmond and Burnaby is used to measure the
\neffect of these restrictions on unit values. This
\nissue is of particular importance in vancouver.
\nApartment-type\tbuildings\tmade\tup\t65%\tof\tnew
\nconstruction\tin\tVancouver\tin\t2007-08\tand\t50%
\nof starts between 1996 and 2008, compared
\nwith\t45%\tand\t28%\trespectively\tin\tToronto.
\nUnlike other cities, in vancouver, these starts
\nare almost entirely strata titled buildings sold
\nto individual buyers rather than rental buildings
\nowned by a single individual or entity.3 Investors
\nmake up a substantial share of the owners of
\ncondominium units in the vancouver area. In the
\ncity,\t35%\tof\tcondominium\tunits\tappear\tto\tbe
\ninvestor owned.4 The figure is lower in vancou-
\nver\u2019s suburbs, but still significant at 22%. The
\nabsence of new purpose-built rental construction
\nand the decline of the existing stock of purpose-
\nbuilt rental units means that investor-owned
\ncondominium units, along with basement suites,
\nare and can be expected to be an important
\npart of the rental housing stock in the vancouver
\narea.5 Restrictions on the ability of investors to
\nrent their units can be expected to not only affect
\nvalues, but the ability of the vancouver area to
\nsupply rental housing options. <\/p>\n
While this is the first study we know of to
\nexamine the effect of restrictions on leasing on
\ncondominium values, there is a body of research
\nthat has attempted to identify the effects of
\ncollective property rights restrictions through
\nprivate covenants on property values. The main
\nbody of this work has looked at gated communi-
\nties and \u2018homeowner associations\u2019 (HOAs), in
\npart, because of the criticism the gated commu-
\nnity has received from planners and sociologists.6
\nAmong economists, the objective of research has
\nbeen to identify the magnitude of any effect on <\/p>\n
Do restrictions
\non renting increase <\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada44<\/p>\n
that the formal \u2018cost\u2019 of
\nimposing restrictions is <\/p>\n
quite low, and that, if the
\npremiums are so high, we <\/p>\n
would expect more units to be
\n\u2018supplied\u2019 via strata corpora-<\/p>\n
tion by-laws.
\nOur data analysis starts <\/p>\n
with the universe of strata-
\ntitled condominium units in the <\/p>\n
cities of Burnaby, Richmond and
\nvancouver, BC. Limiting our analysis <\/p>\n
to buildings with at least five units
\ngives us a sample of 1,781 buildings <\/p>\n
with 107,611 individual units, which
\nis approximately 1\/4 of the housing <\/p>\n
stock in these three cities. We received
\ntransaction price and unit characteristic <\/p>\n
details for these units from the British
\nColumbia Assessment Authority (BCAA). <\/p>\n
When a strata-title property is listed on
\nthe Real Estate Board of Greater vancou-<\/p>\n
ver\u2019s (REBGv) multiple listing service (MLS),
\nthe listing agent has the option of indicating <\/p>\n
whether leasing of the unit is allowed by
\nthe strata corporation or not. We use these <\/p>\n
records for property listings in 2007-2009
\nto determine whether or not unit owners are <\/p>\n
allowed to rent their units. This limits our data
\nto approximately half of the universe of buildings <\/p>\n
(897 strata plans), but this includes about 70% of
\nthe units (72,071 individual units).<\/p>\n
Rental restrictions are not trivial. Approximately
\n13% of the units are in buildings that forbid the <\/p>\n
leasing of units in the building. There is a clear
\ngeographic pattern: 6.6% of units are restricted in <\/p>\n
vancouver, compared with 14% in Richmond and
\n26% in Burnaby. Strata corporations with restrictions
\nare\tsmaller\t(a\tmean\tof\t62\tunits)\tcompared\twith\t85\t<\/p>\n
units in those that do not forbid leasing. Not surpris-
\ningly, the share of units owned by investors in buildings
\nwith\trestrictions\tis\tlower\tthan\tthose\twithout:\t15%\tcom-
\npared\tto\t26%.\tThe\ttwo\tare\trelated,\tas\tthe\tlargest\t25%\tof\t<\/p>\n
buildings have a 31% investor share and only 11% of these <\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 200944<\/p>\n
have rental restrictions, as compared with a
\n26% investor share and 20% with restrictions
\nfor the smallest quartile of buildings. <\/p>\n
To estimate the effects of these restrictions
\non values, a hedonic analysis is performed on
\ntransaction prices. In a standard statistical appraisal
\napproach, a unit\u2019s transaction price is estimated
\nas a function of unit characteristics, the year and
\nquarter of the transaction, whether leasing is
\nallowed, and controls for each of the BCAA-desig-
\nnated assessment neighbourhoods.7 Transactions
\nfrom between January 2007 and April 2009 are
\nused and the analysis is conducted combining all
\nthe transactions, by year, and by city. <\/p>\n
We find that forbidding rentals in a build-
\ning lowers the price owners receive when they
\nsell by between 2.7% and 3.3%. This result
\nis robust and consistent across the different
\ntypes of statistical analysis conducted. The
\none exception is that units in strata buildings
\nin the West End of vancouver, an area with
\nvery high numbers of renters and rental build-
\nings, actually receive a premium of 10%. It
\nwould not be surprising that, in an area where
\nrenters are the dominant tenure, being able to
\ndifferentiate your product can yield a positive
\neffect on unit values. Excluding the West End
\nfrom the more general analysis strengthens
\nthe negative effect of restrictions on price: to
\n3.3%\tto\t5.4%.\t<\/p>\n
Along with price, unit owners can be
\nexpected to care about liquidity: how easy it
\nis to sell their units. We are unable to formally
\ntest this effect with the data we have. We
\nknow if a unit is sold, but not how long it took
\nto sell, or whether a seller withdrew the unit
\nfrom the market. We do analyze the effect of
\nrestrictions on whether a unit sells or not. We
\nfind that rental restrictions will raise the prob-
\nability that a given unit is sold by 1.2 to 2.8
\npercentage points. Given, that restrictions are
\nassociated with a decline in prices, this results
\nis more consistent with owners of units in
\nbuildings with restrictions being more likely <\/p>\n
Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada 45<\/p>\n
to sell, than an actual increase in liquidity.
\nThis study attempts to achieve two goals: <\/p>\n
a very narrow objective of giving valuators
\nand property owners a yardstick for assessing
\na certain type of owner-imposed restrictions
\non the ability of individual property owners to
\nexercise their rights: the restriction preventing
\nthe leasing of condominium units; and a second
\nmore general objective to increase our under-
\nstanding of the patterns of these restrictions
\nand identify aspects of their potential impact
\non housing markets. The results of the former
\nare quite clear: a general 3% decrease in prop-
\nerty\tvalue.\tThis\teffect\tis\thigher,\tcloser\tto\t4.5%
\nin areas where rental is not the dominant form
\nof tenure. Interestingly, the restrictions can
\nhave a positive effect in situations where the
\nrestrictions limit a clearly perceived and likely
\nuse. As to the second objective, the results
\nare more general, but they do highlight the
\nclear geographic variation in the application of
\nrestrictions; restrictions are more likely to occur
\nin older buildings with more owner-occupiers
\nand fewer investors. <\/p>\n
end notes
\n1 Strata title developments are typically condominiums, but <\/p>\n
can be townhouse or single-family detached and non-
\nresidential developments. <\/p>\n
2 The Strata Act in BC allows existing renters in a building
\nthat passes a strata by-law to forbid rentals to be
\ngrandfathered in perpetuity, and owners have a one year
\nwindow after a grandfathered tenant has left, during
\nwhich the unit may still be rented.<\/p>\n
3 CMHC Marketwire 12\/13\/07 http:\/\/www.marketwire.
\ncom\/press-release\/Canada-Mortgage-And-Housing-
\nCorporation-802631.html. <\/p>\n
4 We define a unit as investor-owned if the property tax
\nassessment is sent to an address other than the unit itself.
\nIf an investor has the assessment sent to the unit, we are
\nlikely to underestimate the number of investors. <\/p>\n
5 CMHC estimates this to be 20% of the rental stock in
\nthe vancouver metro area (see CMHC, Rental Market
\nReport: Vancouver and Abbotsford CMAs, Fall 2008). For a
\ndiscussion of the decline of the purpose-built rental stock
\nin vancouver see http:\/\/thetyee.ca\/Views\/2009\/03\/04\/
\nRentalHomes\/. <\/p>\n
6 See Blakely and Snyder (1997) as an example.<\/p>\n
7 For residential properties, there are 40 in Burnaby, 37 for
\nRichmond and 32 in vancouver (including areas near the
\nUniversity of British Columbia). For Burnaby and Richmond,
\na \u2018neighbourhood\u2019 may be specific to a type of property.<\/p>\n
references
\n Agan, Amanda, and Alexander Tabarrok. \u2018What Are Private <\/p>\n
Governments Worth?\u2019 Regulation.\t2005,\t(Fall):\t14-17.
\n Allen, Marcus T. \u2018Measuring the Effects of \u2018Adults Only\u2019 Age <\/p>\n
Restrictions on Condominium Prices.\u2019 Journal of Real Estate
\nResearch. 1997, 14 (3): 339-46).<\/p>\n
Bible, Douglas S., and Chengho Hsieh, \u2018Gated Communities
\nand Residential Property<\/p>\n
values.\u2019 Appraisal Journal. 2001, April: 140-46.
\n Blakely, Edward, and Mary Gail Snyder. Fortress America. <\/p>\n
1997. Washington, D.C.: Brookings Institution.
\n Cannaday, Roger E. \u2018Condominium Covenants: cats, Yes; <\/p>\n
Dogs, No.\u2019 Journal of Urban Economics.\t1994,\t35:\t71-82.
\n Hughes, William, and Geoffrey Turnbull. \u2018Uncertain <\/p>\n
Neighbourhood Effects and Restrictive Covenants.\u2019
\nJournal of Urban Economics. 1996, 39: 160-72.<\/p>\n
LaCour-Little, Michael, and Stephen Malpezzi. \u2018Gated <\/p>\n
Communities and Property values.\u2019 2001. CULER working
\npaper. University of Wisconsin-Madison.<\/p>\n
Pompe, Jeffrey. \u2018The Effect of a Gated Community on
\nProperty and Beach Amenity valuation.\u2019 Land Economics.
\n2008, 84 (3): 423-33.<\/p>\n
* This work was made possible with the generous support
\nof the Appraisal Institute of Canada, AIC – BC, The Real
\nEstate Foundation of BC, and the Real Estate Institute of
\nBC (REIBC). We thank the BC Assessment Authority and
\nthe City of vancouver for providing data. This article is
\npart of a larger effort on the effects of rental restrictions in
\npartnership with Michael Alexander of Smart Growth BC.
\nThe research was conducted under the auspices of the UBC
\nCentre for Urban Economics and Real Estate at the Sauder
\nSchool of Business.<\/p>\n
tsur Somerville, Director, UBC Centre for Urban
\nEconomics and Real Estate, Sauder School of Business, UBC
\nchris kay, Head of Acquisitions, Fairmont Pacific
\nDevelopment Ltd.
\nSeung Dong you, PhD Student, Sauder School
\nof Business, UBC<\/p>\n
authors<\/p>\n
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Canadian Property Valuation Volume 53 | book 4 | 2009 \u00c9valuation Immobili\u00e8re au Canada46<\/p>\n
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