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  • The homeowner is the lender’s client.

    • The homeowner is able to ask its lender what the lender’s policies and practices are regarding whether or not the homeowner (the lender’s client) will:
      • pay for the report to be performed, and/or
      • get a copy of that report regardless of whether the loan is approved or denied
    • This is a business decision by the homeowner’s lender/mortgage broker.
    • An AIC member would not be aware of this information or of any arrangements made between the homeowner’s lender and the homeowner – their client.

    The lender is the AIC member’s client.

    • The AIC member’s client is the party hiring the AIC member and ordering the appraisal not the party who pays for the appraisal.
    • The lender provides instructions to the AIC member regarding how the report is to be completed.
    • AIC members are required to comply with the AIC’s standards of professional practice (CUSPAP).
    • CUSPAP requires an AIC member to maintain the confidential nature of their relationship with their client.

    The report belongs to the AIC member’s client.

    • The AIC member will need written authorization from their client to release the report to any third party – including the person who paid for the report.
    • Only the AIC member’s client and any intended user* identified in the report are authorized to receive a copy of and rely on the report
    • Because the AIC member is the author of the report, consent to release must also be obtained from the AIC member.

    *Intended User

    The AIC member’s client will tell the AIC member if there are any intended users to be identified in the report.

    • An intended user is any party authorized by the AIC member’s client to rely on the appraisal report.
    • unless the AIC member’s client consents to the release of the report to a third person
    • If there is an intended user as well as the AIC member’s client, the AIC member is required to obtain the written authorization from both their client and the intended user before releasing a copy of the appraisal report to someone else.
  • The homeowner is the lender’s client.

    • Just as the homeowner’s lender has policies and procedures for who pays for the report:
    • they will also have policies and procedures regarding who pays for a letter of transmittal.
      • This is a business decision by the homeowner’s lender/mortgage broker.
      • The homeowner is able ask his/her lender what their policies and practices are regarding payment for a letter of transmittal.

    What is a letter of transmittal?

      • A letter of transmittal allows another intended user to rely on a report that was prepared for another AIC member’s client to make a lending decision.

    A letter of transmittal can save the time and added expense of having another appraisal prepared.

    • An appraisal does not determine market value but rather provides an estimate of market value.
    • This estimate is considered to be the most probable value that a property will garner in a specific real estate market over a specific period of time.
    • The accuracy of an appraisal is highly dependent on the availability and reliability of data, both of which will vary for each type of property and each location across Canada.   
    • There is an expectation of accuracy within the parameters of the conditions and assumptions and given the availability of information at the time, however there is no specific margin of error.  
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