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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. COVID-19 National and Provincial Government Information

The most up-to-date information on the COVID-19 pandemic and the Government of Canada’s latest health advisories can be accessed on the Government of Canada’s COVID-19 webpage.  

Check your provincial government’s webpage for the most up to date guidance for your province.

Nova Scotia has issued directives, which also apply to appraisers.

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

2. My Provincial Government is lifting some restrictions. What does this mean for me and my business?

Above all else, follow national and your provincial Public Health Advisories (PHA) with regards to protecting yourself and your family from contracting or spreading COVID-19, keeping in mind your personal circumstances. 

Some situations MAY allow for full appraisals including inspection by AIC Members.  It is your decision to decide what is safe and appropriate in each assignment.  Contact both your client (lender, broker, AMC, etc) and occupants of the property to determine what is reasonable.   You may want to remind your client that a full appraisal without an inspection can still be completed – be prepared to explain the alternatives you can offer.

A full appraisal, with an interior inspection by an AIC Member, is the most accurate method but most banks, private lenders and mortgage insurers continue accept alternative appraisals by AIC Members. 

The Government of Canada’s webpage will have the most up-to-date information on the COVID-19 pandemic and provide its latest public health advisories on physical distancing, Personal Protective Equipment, non-surgical mask use, hand hygiene, cleaning of surfaces, etc. 

A reminder that the AIC Professional Liability Insurance Program does not cover claims related to COVID-19 transmission while performing a professional service.

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

The definition of an “essential service” varies from province to province.  Check your provincial webpage to understand what is considered to be an “essential service” in your province.

Designation as an essential service does not mean that you can carry on with normal business practices during the COVID-19 pandemic.  Regardless of a provincial designation as an “essential service”, you should continue to follow all government PHA directives regarding physical distancing, Personal Protective Equipment, non-medical-grade mask use, hand hygiene, cleaning of surfaces, self-isolation, workplace closures etc., in all circumstances.

AIC continues to monitor the situation closely.  This page will be updated regularly.  

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 following provinces have provided AIC with the following additional information:

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”. 
  
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. 

Quebec has similarly designated Services to Financial Markets as “Essential”.  

Saskatchewan has designated appraisal as an Allowable Business.

British Columbia has similarly designated Services to Financial Markets as “Essential”. 

Manitoba has designated Real Estate Services as “Essential”.\

4. 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.

5. What message about Value do I communicate to Clients during the COVID-19 pandemic?

The AIC recommends communicating to your Clients that there is valuation uncertainty in (Market Value/Market Rent, etc.) the market due to the COVID-19 pandemic.

The COVID-19 pandemic 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.

  • For current market value assignments, Members must use current market-specific information available as a basis for value opinions unless current data is not available. 
  • For pre-COVID retrospective appraisals, Members typically do not use current data or include messaging around uncertainty.
  • For relocation, prospective appraisals and income-producing properties that use discounting of future income, Members should be extra diligent in explaining data and uncertainty.

Estimates of value and opinions should be reported along with full disclosure of any 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.

6. COVID-19 and Fraud

As COVID-19 continues have an impact on Canadian individuals and businesses, watch out for associated scams.

Fraudsters want to profit from consumers’  and business’ fears, uncertainties and misinformation.   

Remember to take steps to safeguard your appraisals from fraud by protecting your reports and signature.  Please see Digital Signature and Fraud.

If you suspect having been a victim of fraudulent activities or suspect fraudulent activities are occurring, you may wish to contact any of the following authorities:

Canada Anti-Fraud Centre (RCMP): https://antifraudcentre-centreantifraude.ca/

Government of Canada: https://www.canada.ca/en/services/finance/fraud.html

Competition Bureau: https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04339.html

 

These resources also have examples of what to look out for. Here is what the Canada Anti-Fraud Centre says to look out for:

https://antifraudcentre-centreantifraude.ca/features-vedette/2020/covid-19-eng.htm

 

FINTRAC

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is Canada’s financial intelligence unit. Its mandate is to facilitate the detection, prevention and deterrence of money laundering (including in real estate) and the financing of terrorist activities, while ensuring the protection of personal information under its control.

Some real estate representatives are required to report suspicious transactions to the authorities.  If you have reasonable grounds to suspect  money laundering, you can contact FINTRAC here: https://www.fintrac-canafe.gc.ca/contact-contactez/1-eng

 

For comments or questions, contact us at

FAQ – GENERAL REPORTING

Introduction

The pandemic 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 pandemic, 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 pandemic?

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 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.

 

Remember that for relocation, prospective appraisals and income-producing properties using discounting of future income, Members consider market conditions which may include foreseeable future events.

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 properties for inspection purposes is contrary to local health authority advice and is not possible at this time.  This 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. 

When you have relied on a property owner’s photographs or video-tour of a property, 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 for Real Property Appraisal and Machinery and Equipment Appraisals.  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 in the AIC 0518 Full Residential Appraisal Form, Scope item #2 indicates a “site visit and observation…”.
4. During the COVID-19 pandemic, 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:

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

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 must describe in the Scope of report (see CUSPAP 7.5):
    1. The method of inspection and the virtual platform used,
    2. The date and time of inspection, and
    3. The name and contact details of the person who performed the video tour of the property interior
5. 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. 

You should follow all PHA guidance regarding Personal Protective Equipment.

Survival of Coronavirus on Surfaces

6. I am using different technology to get interior photos or videos of properties. Do I still need permission?

Yes, under PIPEDA and provincial privacy legislation, you must obtain meaningful consent to use photographs and videos.    The AIC has provided a Consent form HERE.  

Remember that you are required under CUSPAP to create a workfile which includes photographs and videos.

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. How do I describe my inspection in the Scope section of a Full Appraisal 0518 Form?

Remember that in the AIC 0518 Full Residential Appraisal Form, Scope item #2 indicates a “site visit and observation…”. 

  • If you went to the property and:
    • performed an exterior inspection
    • did not perform an interior inspection due to COVID-19 PHA restrictions
    • used alternative methods to document the characteristics of the property
      • explain what you did and did not do in the Scope section.
      • clearly state the sources of information used in the Report
  • If you did not go to the property due to COVID-19 PHA restrictions
      • explain what you did in the Scope section.
      • clearly state the sources of information used in the Report
2. How do I describe my inspection in the Certification section of a Full Appraisal 0518 Form?

If you went to the property and:

  1. performed an exterior inspection 
  2. did not perform an interior inspection due to COVID-19 PHA restrictions
  3. used alternative methods to document the characteristics of the property

For the PERSONALLY INSPECTED THE SUBJECT PROPERTY statement:

  • tick the YES box in the Certification section
    • 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 (see FAQ #1)

clearly state the sources of information used in the Report If you went to the property and:

  1. performed an exterior inspection 
  2. did not perform an interior inspection due to COVID-19 PHA restrictions
  3. used alternative methods to document the characteristics of the property

For the PERSONALLY INSPECTED THE SUBJECT PROPERTY statement:

  • tick the YES box in the Certification section
    • 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 (see FAQ #1)
  • clearly state the sources of information used in the Report

If you did not go to the property due to COVID-19 PHA restrictions and used alternative methods to document the characteristics of the property.

For the PERSONALLY INSPECTED THE SUBJECT PROPERTY statement:

  • tick the NO box in the Certification section
  • add text in the Scope Section (See FAQ #1)
  • clearly state the sources of information used in the Report

 

3. Where do I add in/refer to COVID-19-related Extraordinary Assumptions and Limiting Conditions in a Full Appraisal 0518 Form?

You can use the text from General Reporting FAQ #2 &3 and refer to them here:

And include them in the Extraordinary Items Addendum.

4. What if the AIC 0518 form provided by the AMC does not allow me to add a Range of Value?

The Full Appraisal Form is designed for entering a single estimate of value, however CUSPAP also permits the use of directions in value or ranges of value.

When you cannot perform an onsite inspection and end up relying on information provided by other sources to develop an estimate of value in a Full Appraisal Form, you are advised to – ideally prior to accepting the assignment – suggest providing a range of values estimate instead of a single value estimate with your AMC and/or client.

5. 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

6. 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