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COVID-19

**Above all else, please follow the guidance of health authorities**

This page is updated frequently, please check back regularly.

Communiqués

FAQCOVID-19

1. What are the current government requirements/advisories on COVID-19?

Please go to the Government of Canada’s webpage for the most up-to-date information on the COVID-19 emergency and the Government of Canada’s latest health advisories. 

Information may also be found on your provincial government’s websites.  Access them through your Provincial Association.

2. Is Appraisal considered an “Essential Service” during the COVID-19 pandemic emergency?

AIC continues to monitor the situation closely.  This page will be updated regularly.  For more information about the situation in your province, please contact your provincial association.

AIC reminds members that, whether designated as an essential service or not, Public Health Authorities’ directives still apply.  AIC Strongly recommends that Appraisers minimize or avoid onsite inspections and instead consider completing reports without onsite inspections.

Currently, the answer varies across provincial jurisdictions, however, the Government of Canada has released a list of essential services, which includes:

  • Workers who are needed to support financial transactions, advice, and services (e.g., banknote processing, payment, clearing, and settlement; wholesale funding; insurance services; benefit, compensation and pension services, wealth management; and capital markets activities)
  • Workers who are needed to provide consumer and business access to banking and lending services (e.g. bank branches, ATMs, customer call centres, facilities management, and to move currency and payments (e.g., armored cash carriers)

While this language does seem to imply that appraisers are included, AIC has requested clarification from the Government of Canada.  This page will be updated as more information becomes available. 

The Government of Alberta has deemed real estate appraiser services an essential service, categorizing real estate appraisal under real estate agent services. Licensed real estate appraisers are exempted from restrictions during the COVID-19 outbreak as long as they follow all public health guidelines, including physical distancing measures.

New Brunswick is permitting appraisal services so long as appraisers follow all social distancing and hygiene recommendations

Ontario has designated Banking & Activities Related to Credit intermediation as “essential”.  AIC has consulted with the Premier’s office and was informed that that appraisal services would fit in the supply chain category providing services to banks and lending institutions, thereby designating Appraisers as “Essential”.  AIC reminds members that Public Health Authorities’ directives still apply.  AIC Strongly recommends that Appraisers minimize or avoid onsite inspections and instead consider completing full inspections without onsite inspections, or other reports without onsite inspection.

ALL Ontario Members should stop face-to-face business, including in-person on-site, interior inspections and maintaining public office hours. Public Health Authority directives regarding physical distancing and self-isolation should continue to be followed in all instances.
  
The Ontario Government gave the “essential” label to real estate professionals in Ontario to permit transactions to close – NOT to allow our Ontario Members to carry on with normal business practices during the closure of non-essential workplaces in Ontario during the COVID-19 emergency. 

All Ontario Members should be moving to remote work to comply with the Ontario government’s decision to close as many workplaces as possible during the COVID-19 emergency. 

Quebec has similarly designated Services to Financial Markets as “Essential”.  AIC – Quebec is seeking clarification from the office of the Premier regarding the applicability to Appraisers.

Saskatchewan has designated appraisal as an Allowable Business.

British Columbia has similarly designated Services to Financial Markets as “Essential”.  AIC – Quebec is seeking clarification from the office of the Premier regarding the applicability to Appraisers.

 

 

3. What to do if I get intercepted by police trying to cross a provincial border to complete an assignment?

While every jurisdiction has different rules (see FAQ#2 above), we recommend that appraisers keep a copy of the applicable government list of essential businesses (see FAQ#2 above) along with a letter from your employer or your business card and show it to the officer as evidence that you are providing essential services.

4. What message about Value Uncertainty do I communicate to Clients during the COVID-19 emergency?

The AIC recommends communicating to your Clients that there is valuation uncertainty due to the COVID-19 emergency.   

The COVID-19 emergency has heightened uncertainty in both local and global markets. Global financial markets have seen steep declines since late February 2020.  It is prudent to ensure that your clients are made aware of this market uncertainty.

Inform clients whether, as of the effective date of your report, less weight should be applied to pre-COVID-19 market evidence used as a basis for your opinion/estimate of value. 

Estimates of value and opinions should be reported along with full disclosure of any valuation uncertainty present in your market sector and geographical region.   

The AIC recommends:

  • informing clients that both less certainty and a higher degree of caution should be applied to valuation than in more typical market conditions.    
  • informing clients that values can change quickly and more often than under more typical market conditions.   
  • revisiting property values more often if clients need to better understand the impact of changing markets

Some clients may be comfortable taking greater risks during times of uncertainty – your expertise will be valuable to them by providing:

  • discussions of different scenarios,
  • modelling of outcomes
  • identification of potential future risks.

Text to include in your letter of transmittal and text for Extraordinary Limiting Conditions and Extraordinary Assumptions is found in General Reporting.

FAQ – GENERAL REPORTING

Introduction

The emergency has affected the way all AIC Members conduct their business, with perhaps the greatest impact being felt by Members performing traditional residential appraisal with an interior inspection hosted by a property owner/occupant.   

During the COVID-19 emergency, Members completing reports for assignments for: Real Property Appraisals, Reviews, Reserve Fund Studies, Consulting, Machinery and Equipment Appraisals, and Mass Appraisal can find guidance on:

  • Extraordinary Limiting Conditions, Extraordinary Assumptions, and Communicating with your client:
  • Onsite inspections, Alternatives to onsite inspections, onsite inspections of vacant property
  • using technology to do your part to prevent the spread
1. What Limiting Conditions can I add to a report to address the COVID-19 emergency?

Insert this type of language on Letters of Transmittal, in Extraordinary Items, and wherever you enter a value.

Significant Value Uncertainty

The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organization as a “Global Pandemic” on 11 March 2020, has impacted global financial markets.  Travel restrictions have been implemented by many countries.

Market activity is being impacted in many sectors. As at the valuation date (effective date), we consider that we can attach less weight to previous market evidence for comparison purposes, to inform opinions of value. Indeed, the current response to COVID-19 means that we are faced with an unprecedented set of circumstances on which to base a judgement.

Consequently, less certainty – and a higher degree of caution – should be attached to our valuation than would normally be the case. Given the unknown future impact that COVID-19 might have on the real estate market, we recommend that you keep the valuation of this property under frequent review.

OR

Values and opinions contained in this report are based on market conditions as at the time (effective date) of this report. This report does not provide a prediction of future values. In the event of market instability and/or disruption, values and opinions may change rapidly and such potential future events have been NOT been considered in this report. As this report does not and cannot consider any changes to the property or market conditions after the effective date, clients and intended users are cautioned in relying on the report after the effective date noted herein.

2. What Limiting Conditions and Extraordinary Assumptions should I add to my reports to address reports completed without onsite inspections?

Insert this language on Letters of Transmittal, in Extraordinary Items, and wherever you enter a value.

Extraordinary Limiting Condition: Due to the Coronavirus pandemic, local health authorities are strongly advising (or mandating) limited exposure to or contact with other people.  Entering homes for inspection purposes is contrary to local health authority advice and is not possible at this time.  This report assignment was completed without physical access to the interior/exterior of this property.  Property details have been identified and collected through other means as noted in this report.

Extraordinary Assumption: Because of the inability to access and view the interior/exterior of this property, information and details concerning the interior/exterior finishing, quality and condition are taken from sources deemed reliable.  If any of these details are subsequently determined to be inaccurate, the appraiser reserves the right to amend the report and the value herein.

3. Can I complete a report without an onsite inspection? What should I add to or change in a report?

CUSPAP permits a Report without an onsite inspection. 

  • Extraordinary Limiting Condition and Extraordinary Assumptions

CUSPAP requires the inclusion of an Extraordinary Limiting Condition if an onsite inspection of a subject property is not performed.

Before invoking an Extraordinary Limiting Condition, a member must determine that the Scope of Work will result in analyses, opinions and conclusions that are credible and will not be misleading. 

An Extraordinary Assumption should also be included in the Report.  Extraordinary Assumptions can include:

  • uncertain information concerning the physical characteristics of the subject property is true
  • sources of information about the condition of the property used in the Report are reliable
  • all assumptions made about the condition of the property are true

A member must include explanations and justifications for using Extraordinary Limiting Conditions and Extraordinary Assumptions in the Report.

Anywhere an opinion of value  or an opinion on the completeness is stated in a report:

    • the Extraordinary Assumptions must be stated in their entirety, or
    • A reference to their exact location in the report must be provided.
  • Providing a Range of Values in a Full Report

CUSPAP permits the use of single point estimates of value, directions in value, or ranges of value.  In a situation where an onsite inspection is not possible and the Member relies on information provided by other sources than personal inspection for developing an estimate of value, the Member is advised to explore the possibility of providing a range of values estimate. 

  • Letters of Transmittal:
  • It should be clearly stated in the Letter of Transmittal:
    • that the property was NOT personally inspected or
    • to what extent the property WAS inspected (e.g. only the exterior was inspected)
  • It should be clearly stated in the Letter of Transmittal and the Report:
  • why the property was not inspected and, if applicable,
  • who directed the Member not to inspect the property
  • Scope of Work
  • The Scope of work must be clearly stated in the Report
  • Remember that Scope item #2 indicates a “site visit and observation…”.
4. What is the difference between a full report with no onsite inspection and a drive-by report?

A Drive-by report notes the characteristics of the front of a structure on a property observed from the street and uses this information as a basis for assumptions about the remainder (interior, rear of the structure, landscaping, etc.) of the property.

A Full Report without an inspection can use the following information:

  • available MLS data,
  • municipal permits,
  • assessment information,
  • client or owner information, (this can include photos of the structure supplied by the owner/occupant), and
  • any other available source to describe the physical characteristics of the structure and the remainder of the property.

A Full Report without an onsite inspection should be much more thorough and descriptive than a Drive-by assignment.

5. During the COVID-19 emergency, are there alternative ways to obtain information on a property without performing an onsite inspection personally?

Above all, members should follow the guidance and advisories of Public Health Authorities.   

  • Full Report without a personal onsite inspection:

Alternative sources of Data available to rely on:

  • MLS
  • municipal permits/bylaws/codes
  • client information
  • owner information
  • Assessment data 
  • Full Report with a Virtual Inspection instead of a personal inspection:

Members may consider using technology to complete virtual inspections.

  • Member:
    1. sets up an appointment for a virtual inspection to be conducted by the occupant/owner of the property
    2. connects with occupant and confirms their identity via photo ID
    3. Asks the occupant to perform a video tour of the entire property interior
    4. will direct occupant as to features of the property to focus on in the video tour
      • Virtual inspection should be recorded and saved for work-file
  • Member will describe in report:
    1. The conditions that have led to a virtual inspection being relied upon
    2. The method of inspection and the virtual platform used
    3. The date and time of inspection
    4. The name and contact details of the person who performed the video tour of the property interior
6. Can I perform an onsite inspection when the property is vacant?

Follow a similar process to FAQs 3 and 5.    

If property is vacant, temporarily unoccupied or under construction, Members must still follow the guidance of Public Health Authorities.  

Remember that coronavirus survives on surfaces for up to several days including frequently touched surfaces such as handrails, doorknobs, switches, etc.

Survival of Coronavirus on Surfaces

7. If I do not perform an inspection, will the report be covered by the AIC Professional Liability Insurance Program?

If a Member follows CUSPAP in completing the assignment, the AIC professional liability policy is designed to protect the Member. 

If an inspection is not possible, then the member must invoke:

  1. an Extraordinary Limiting Condition in the report to cover the inability to adhere to this Standard Rule (see FAQs #1 and #2 under General Reporting for samples)

AND

  1. include the mandatory minimum assumptions and limiting conditions (see FAQs #1 and #2 under General Reporting for samples)

AND

  1. an Extraordinary Assumption for the assumptions made in the report (see FAQs #1 and #2 for samples)

AND

  1. Revise the Scope of Work in the Report

Remember to discuss your practices and any limitations caused by COVID-19 with your client and note what you did (or were unable to do) in your Letter of Transmittal.  

See additional Information from Hub International Insurance Broker

AIC 0518 Residential Appraisal Form, Residential Mortgage Finance Assignments, and Residential Progress Reports

1. What changes should I make in the Scope and Certification sections of the AIC 0518 Residential Appraisal Form?

Scope of Work and Certification

In the Scope section:

remember that Scope item #2 indicates a “site visit and observation…”. 

  • If you went to the property and:
    • performed an exterior inspection and
    • did not perform an interior inspection due to COVID-19 restrictions
      • explain what you did and did not do.
    • If you did not go to the property at all due to COVID-19 restrictions
      • Explain what you did.

In the Certification section:

  • If you went to the property and:
    • performed an exterior inspection and
    • did not perform an interior inspection due to COVID-19 restrictions
      • For the PERSONALLY INSPECTED THE SUBJECT PROPERTY box:
        • Tick the YES box
          • If the software you are using allows: add some explanatory text in the DATE OF INSPECTION field
          • If the software you are using does not allow: add some explanatory text to the Scope section

  • If you did not go to the property at all due to COVID-19 restrictions
    • For the PERSONALLY INSPECTED THE SUBJECT PROPERTY box:
      • Tick the NO box
      • Add text to the Scope Section
      • The sources of information used in the assignment must be clearly stated in the Report
2. What if the AIC 0518 form provided by the AMC does not allow me to add a Range of Value?

While the Full Appraisal Form is designed for a single value, CUSPAP permits the use of single point estimates of value, directions in value, or ranges of value.  In a situation where an onsite inspection is not possible and the Member relies on information provided by other sources than personal inspection for developing an estimate of value in a Full Appraisal Form, the Member is advised to explore the possibility of providing a range of values estimate with their AMC and/or client.

3. What are best practices for Intended Use and Loan to Value Ratio (LTV)?

Setting a lower LTV for a mortgage financing report is at the appraiser’s discretion, but best practices mandate communicating those limits to the clients in advance.  

Submitting a report with a lower LTV cap is acceptable, but only if the appraiser informs the client of those limitations prior to accepting and / or completing the assignment.  You should inform your client as early as possible about any limitations in the report, including lower LTV or no on-site inspections.  AIC recommends using letters of engagement whenever possible. (sample here)

For further information, read:

CUSPAP Intended Use Communique – click here 

Frequently Asked Question #1 on limiting conditions – click here

4. Progress Inspection Reports

A member must include explanations and justifications for using Extraordinary Limiting Conditions and Extraordinary Assumptions in the Report.

Anywhere an opinion on the completeness of the property appears in a Progress Inspection Report:

  • the Extraordinary Assumptions related to the absence of an onsite inspection [see General Reporting FAQs 2 and 3] must be stated in their entirety, or
  • A reference to their exact location in the report must be provided.

Government resources

Important Insurance Information

Instructions and Consent Forms for Occupant