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0518 FAQ

As of December 1, 2018, Members must only use AIC approved/licensed 0518 forms. If an AIC Member has created his/her own version of a progress inspection or narrative market rent standalone appraisal, these may be used and the Member is responsible for ensuring that they fully comply with CUSPAP 2018.

All software providers (ACI CRAL, a la mode, Bradford) have implemented the 0518 forms. If you work with an AMC that hasn’t implemented an AIC approved 0518 form (see table below), discuss with your AMC and use any software provider (ACI CRAL, a la mode, or Bradford) or the AIC fillable form.

When using a PDF format for your reports, you must take reasonable steps to protect your report including using a digital signature, locking and protecting the report. See Signature and Fraud in the Resource Library.

If you have any comments or questions, please contact AIC at .

As of today, the following is the status of the implementation of the 0518 forms as advised by the given AMC and software provider:

Appraisal Management Company Instructions
Nationwide Appraisal Company (NAS)

Only use 0518 AIC approved/licensed forms.

Available: AIC-licensed “NAS 0518” full Residential Appraisal Report form and assignment-specific forms.

RPS

Only use 0518 AIC approved/licensed forms.

Available: All AIC-licensed “RPS 0518” full Residential Appraisal Report form and assignment-specific forms.

Solidifi Only use 0518 AIC approved/licensed forms. If using Report Pro (ACI), please choose the “AIC Full Appraisal 05-2018” form and follow these instructions developed by Solidifi:
Forms Communication

Picklist Import Procedures 
FNF

Only use 0518 AIC approved/licensed forms.

Available: AIC-licensed “FNF 0518” full Residential Appraisal Report, 0518 Desktop and Drive-by in Report Pro (ACI). For other assignments, use the AIC 0518 form. 

Value Connect

Only use 0518 AIC approved/licensed forms.

Available: AIC-licensed “Value Connect 0518” full Residential Appraisal Report form and assignment-specific forms.

First Canadian Title (FCT)

Only use 0518 AIC approved/licensed forms.

Members doing assignments for FCT should use AIC 0518 forms in Report Pro (ACI).

Appraisal Software Companies Instructions
ACI (Report Pro) Only use 0518 AIC approved/licensed forms.
Bradford Only use 0518 AIC approved/licensed forms.
alamode Only use 0518 AIC approved/licensed forms.

COVID-19

Please visit the COVID-19 page.

General

1. How do I determine the intended use?

The Rule 6.2.2: identify the intended use of the Member’s opinions and conclusions

GUIDANCE: You must state what you assume your report will be used for. Do not use a generic term like “mortgage financing”; this is a very broad term and could be taken to mean first, second, third, or fourth mortgage, or non-conventional or even syndicate mortgages.

Remember that there are more issues raised and insurance claims filed for reports used for mortgages beyond the conventional first mortgage. If you intend to complete appraisals on higher risk assignments, which may include desktops, drive-bys, high-ratio mortgages, or second, third and fourth mortgage financing, you must carefully weigh the costs and benefits of taking on these types of assignments against the additional liability risks they may attract.

Conventional mortgages are those that require a down payment of at least 20% of the purchase price and do not have to be insured against default.

If you complete an assignment for mortgage insurers such as CMHC, Canada Guaranty or Genworth, remember to consider that the Intended Use is likely Non-Conventional (do not click Conventional).

If your client does not know the specific Intended Use of your report, assume it is a conventional first mortgage or consider providing a draft report until the client can narrow down the use. You should not contact your client’s client (the borrower) or any of their representatives without your client’s consent.

The following terms are provided as helpful reminders:

Non-Conventional (“High Ratio”) Mortgage Loans – “Non-conventional, or “high ratio”, loans have higher loan to value ratios (less equity) at origination and generally require mortgage insurance to mitigate risk. By law, residential mortgages underwritten for the purpose of purchasing, renovating or improving a property must be insured if their loan to value ratios are greater than 80 percent.” (Source: OSFI B20 Guidelines)

Conventional (“Low Ratio”) Mortgage Loans – “Conventional, or “low ratio”, mortgage loans have lower loan to value ratios (more equity) at origination and do not require mortgage insurance by law since their loan to ratio value ratios are equal to or less than 80 percent.” (Source: OSFI B20 Guidelines)

First Mortgage – “A first charge on property that ranks ahead of any other mortgage, based on the date and time of its registration on title.” (Source: Real Estate Council of Alberta)

Second Mortgage – “A mortgage registered against a property which is already encumbered with a first mortgage, that mortgage having been registered at a date and time that precedes the second mortgage.” (Source: Real Estate Council of Alberta)

Non-Conforming Loans

(iii) Non-Conforming Mortgage Loans

Non-conforming mortgage loans are a subset of conventional mortgage loans and are broadly defined as having higher-risk attributes or deficiencies relative to other conventional mortgages. OSFI expects FRFIs to impose a maximum LTV ratio less than or equal to 65 percent for non-conforming residential mortgages. In general, the maximum lending threshold for a non-conforming loan should decrease as the risk of the transaction increases. (e.g., due to presence of multiple higher-risk attributes or deficiencies in a loan application, the presence of higher risk factors around property valuation, etc.) (Source: OSFI B20 Guidelines)

2. I do not see that my software provider/AMC has 0518 yet. Where do I find the new report or the “report pak”?

Most software providers and AMCs have been using 0518 for several months. If not, they will be completing updates during the course of the following week and will be sending out instructions. If you do not see it available by December 1, 2018, contact your software provider or AMC.

3. What exactly does mandatory use of the AIC Full Residential Appraisal Form – 0518 mean?

An AIC Member has three options:

  1. Use the most current version of the AIC Full Residential Appraisal Form 0518 as posted on the AIC website.
  2. Update their own residential appraisal forms based on 0518 and CUSPAP 2018 requirements. Members who have created their own forms for their company’s use must ensure that their forms are updated to meet current CUSPAP requirements.
  3. Use a licensed version of the AIC 0518 form that is provided by appraisal software companies and/or appraisal management companies.

Members can no longer use the 0912 or the 0404 versions of AIC report forms.  Failure to submit a full residential report based on the most current version of the AIC Full Residential Appraisal Form 0518 may be considered willful non-compliance with AIC Rules and Regulations and, by extension, coverage (under the AIC Insurance Program) may be denied.

4. Percent complete is no longer on the appraisal form, but my Client is asking for a Percent Complete. What do I do?

The percentage complete field was included in the old 0912 Form. It was intended to be used for new construction, additions and renovations.

This field has not been included on current AIC Forms. A single-entry field is not considered able to provide adequate information regarding the percentage of completeness of a property under construction/undergoing renovations.

If a lender requires a percent complete, the AIC recommends using a Progress Inspection addendum in order to provide adequate detail as to the percentage of completeness of the property.  For example, reporting 98% complete without supporting detail may mean that the remaining 2% that is reported as incomplete could be anything – from missing moulding/trim to missing exterior doors to a disconnected water/septic line, each of which can have a different impact on the value.

The AIC does not recommend simply stating 97-100% complete in the report without a proper explanation.

Reporting Methods

A member has the following four reporting method options when asked to provide a Percent Complete:

  1. Provide a Full Residential Appraisal Report with a Progress Inspection addendum;
  2. Provide a Progress Inspection Standalone report
  3. Provide a Full Residential Appraisal Report with an “As Is” addendum that includes a Percent Complete
  4. Provide a narrative report or narrative addendum including the percentage complete

“As is”/”As if Complete” Assignments

A client may request an “As Is” value in addition to the “As Is Complete” or an “As If Remediated” value.   A request for two values is more common for new construction, additions and renovations, but for a subject that is not under construction, a client may want a better understanding especially when those missing items affect the value.

These types of assignments may require two separate sets of comparable sales, analyses or adjustments – one to support the “As Is” value and another to support the “As If Complete” value in the single report.   If the missing items are minor such as missing carpet, it could still be most appropriate to use the same comparable sales with an adjustment for condition for both the “as is” and “as if Complete” values.

The AIC is continually working with industry stakeholders (AMCs, brokers, lenders) to provide direction as to which of the above four reporting method is the most appropriate in a given scenario.

Remember that it is misleading to state a value for a partially completed improvement by simply deducting the cost to complete (or percentage) from the value as if complete.  (See CUSPAP 18.5.6.-9  (https://www.aicanada.ca/members-home/professional-practice-resources/cuspap-html/#_Toc500403283)

As-is and As-if-complete

5. What is the “as is” and “as if complete” in the Certification? Can I include two values in one report?

The majority of appraisals completed reflect current value in current “as is” condition, but for new construction or improvement programs like “purchase plus improvement” or renovations, an appraiser typically completes an “as if complete”.

In cases where a Client requests two values, a Member can produce two separate appraisal reports; one “as is” and one “as if complete”.  While this creates additional work, the scope of some assignments are better fulfilled with two reports that can eliminate confusion between the two physical descriptions (before and after renovations), the hypothetical conditions and extraordinary assumptions that are required for an “as-if complete”, the two sets of comparables, and the two sets of adjustments or analyses required for “as is” and “as if complete”.

Because a narrative report or two separate reports was not often practical, Members typically wrote the words “as is” or “as if complete” or both immediately after the final value.

In some cases, (see Case Summary 30 at https://www.aicanada.ca/members-home/professional-practice-resources/case-summaries/), the two values were not clearly identified, so new addenda have been added.  If your Client requests “as is” and “as if complete” values, you should provide one value in the report and add an addendum to reflect the second scenario.

  • Identify the Purpose as estimating two market values

  • Use the main body of 0518 to reflect the before or after property characteristics for either the “as is” or “as if complete”

 

  • Tick the appropriate box depending on which value is represented in the Certification (you may wish to discuss with your Client and/or fellow appraisers which is best.)

  • Complete either the “as is” or “as if complete” addendum for the second value. Depending on the assignment, you may have to include an appropriate separate second set of comparables, analyses or adjustments as needed. If the assignment is minor renovations, it may be appropriate to use the same comparable sales with a minor adjustment for condition.
  • Add the required hypothetical conditions and extraordinary assumptions (see CUSPAP Comment 7.11)

 

For more information, see the “As If Complete” Professional Excellence Bulletin AT https://www.aicanada.ca/members-home/professional-practice-resources/professional-excellence-bulletins/.

Limited Uses and Limited Detrimental Conditions Addendum

6. What is the new Limited Uses and Limited Detrimental Conditions addenda?

The Limited Uses and Detrimental Conditions Addendum is a tool for reporting specific uses, characteristics of the subject property, the site and/or the neighbourhood that could affect the valuation of a property.  It is a new two-page form designed for specific clients who may use AIC Members’ observations of these uses and/or conditions to make lending decisions.

The addendum includes information that is often already found within the appraisal report – the addendum gathers this same information and reports it in a checkbox format.

This addendum was specifically designed for lenders. Members should only include this addendum in reports when specifically requested by their client.  

Recognizing, detecting or measuring detrimental conditions is often beyond the scope of a Member’s expertise. If you are made aware of detrimental conditions through disclosure by the client and/or commonly-known facts, you should record this as an observation in the report.

In completing the checklist in the addendum, you should record only those conditions that are:

  • observable during the process of a standard inspection for valuation purposes; and
  • are within the limits of your particular expertise in this area

If the information is not reliable or you may not have the competency with a specific detrimental condition that is part of the assignment, you should consider declining the assignment altogether.  (For further education, consider UBC BUSI 352 Case Studies in Residential Appraisal and BUSI 400 Residential Property Analysis).

Failure to address known detrimental conditions in a report could result in a misleading report.

7. Can I use the new Limited Uses and Limited Detrimental Conditions Addendum as a standalone report?

No, the Limited Uses and Limited Detrimental Conditions Addendum is designed to be attached to 0518 when requested by a client.

8. I observed a detrimental condition when I inspected a subject property – should I fill out the addendum?

No, unless your client has specifically requested that the Limited Uses and Limited Detrimental Conditions Addendum is part of the assignment, you do not need to include it with the report.

However, Members must still note any observed detrimental conditions and the impact on value in the body of a report as required by CUSPAP 6.2.8, but an addendum is not a mandatory part of a Full Residential Appraisal Report – 0518.

9. If I click the Detrimental Condition check box in the main body of a report, do I need to fill out the Limited Uses and Limited Detrimental Conditions Addendum?
  • Yes – if the scope of work requested by your client requires the inclusion of a Limited Uses and Limited Detrimental Conditions Addendum.
  • No – if the scope of work requested by your client does not require the inclusion of a Limited Uses and Limited Detrimental Conditions Addendum. The Limited Uses/Detrimental Conditions can be addressed with narrative comments in the comments area of a specific section of the report (e.g., Subject, Neighbourhood, Site).
10. My subject property has a detrimental condition, but it is not listed in new addendum. What do I do?

A Member must still typically identify any observed detrimental conditions and consider the impact on value within the report as required by CUSPAP 6.2.8. When appropriate under CUSPAP, a member may invoke an assumption or limiting condition or rely on another professional to assist with a cost to remediate a detrimental condition.

A Member should identify, discuss and take photographs (with consent) of detrimental conditions where observed so that the client is aware they exist.  The Limited Use and Limited Detrimental Condition Addendum is intended only to assist clients in making decisions about a limited number of uses and detrimental conditions, not all uses and detrimental conditions.

11. Why are solar panels listed on the Limited Uses and Limited Detrimental Conditions Addendum?

Solar panels are not necessarily detrimental, but they have both pros and cons that clients should be aware of.   While solar panels are accepted as good for the environment and often a source of additional income to the homeowner, they also may be less appealing to some purchasers because of the look of the home or if restrictions are in place because it is subject to a solar contract.

Progress Inspection Report

12. If a client requires a progress report on a construction project renovation to advance a loan payment, and the Full Residential Appraisal Form – 0518 has been completed, how do I complete a Progress Inspection Report?

A “Cost to Complete” is not a Progress Inspection Report.

A Progress Inspection Report (PIR) may be an extension of the original report or a standalone Consulting Assignment.

If an original appraisal report has been completed:

  • The Progress Inspection Report:
    • can be prepared to estimate percentage complete without reference to value
    • is an extension of the original report.

If an original appraisal report has not been completed:

  • The Progress Inspection Report:
    • is prepared to estimate percentage complete without reference to value
    • is considered a stand-alone, consulting report
    • must be prepared in compliance with the Consulting Standard.
    • When completing a stand-alone progress report, you must:
      • Complete a walk-thru survey of the subject property; and
      • Observe and report on the physical condition of the subject property.

A specific item can be identified and the percentage of its completion can be indicated in the “% Comp.” column using percentages only.

No dollar value should be in this report; only percentages complete (See CUSPAP 11.7).

A Member can use their own PIR rather than use the AIC’s 0518 Progress Inspection Report Form to report on the progress of construction and/or renovation as long as it complies with CUSPAP 2018.

13. I did not complete the original appraisal. Can I complete a Standalone Progress Inspection Report?

Yes, a Member can complete a standalone Progress Inspection Report but it must follow the 14 rules under Consulting Standard 10.1.

No costs or values should be in this report; only percentages of completion.  (See CUSPAP 11.7).

14. Can I change the items and numbers in AIC Progress Inspection Report?

Yes, a Member should modify the Progress Inspection Report as it relates to an assignment.  A Member can also use their own Progress Inspection Report rather than use the AIC’s Progress Inspection Report Form to report on the progress of construction and/or renovation as long as it complies with CUSPAP 2018 and has similar effect for an assignment.  A Progress Inspection Report should not be modified in a way to reference monetary value as this can be misleading.

Members often modify the Progress Inspection Report for custom-built or unique design construction since the form is designed for average construction of a typical home, not for custom/unique designs or renovation.  For renovation construction draws, a Member can modify items or design their own CUSPAP compliant form for renovations.

A Member may also use costing breakdowns such as Marshall Swift Core Logic, Hanscomb or reliable local contractor costs, especially when appropriate for unique or custom-built homes.

If a Member alters the percentages and the ordering of components in the AIC form based on their knowledge of their local market and the type of property in question (basic, custom, rural),  they should ensure that they clearly indicate in their report the source(s) supporting their variations.

15. Can I report the cost to complete within a Progress Inspection Report?

No costs or monetary values should be in this report; only percentages of completion. (See CUSPAP 11.7).

A cost to complete is within the expertise of many Members, but it is a different assignment with a different scope.   It will depend on the scope and intended use, but a cost to complete may require assessing the remaining items, remaining demolition and retrofit costs if applicable.  A Member may need to obtain local costs or seek out estimates from other professionals.

16. Why can’t I just use the cost the homeowner provided as the cost to complete?

A Member is responsible to use reliable data and it is common for estimated costs of a “do-it-yourselfer” to be exponentially lower than those of a professional contractor. If the Member is able to collect, verify and reconcile (CUSPAP 10.1.10) reliable and credible data, a homeowner’s estimate may be used.   A Member should be validating data in the workfile. In rare cases, fraud can occur where a borrower has overestimated costs. A Member should recognize “red flags”, such as when an installation of a $5,000 sink forms part of a purchase plus improvement.

CUSPAP 18.5.8 recommends a cost to complete as a second assignment since construction costs and other factors can change over time.

17. Why can’t I just use the Cost Approach for the cost to complete?

It will depend on the context but a Cost Approach may not be appropriate as a basis for a cost to complete. The Cost Approach is intended for new construction, therefore it is not appropriate for most renovation assignments – the cost may not capture the extra demolition or retrofit costs.

Market Rent Report

18. Why are Land Use Controls in a rent report?

Identifying land use controls has always been a requirement under CUSPAP. While zoning is the most recognized control, a Member must consider other controls such as community plans, environment/flood, rental housing rules or even parking. It is not uncommon to find additional rules about rooming houses or student rentals that may be relevant to the assignment.

A market rent assignment is an estimation of market rental value, which is predicated on the Highest and Best Use of a property that is determined to a large extent by the legally permissible uses allowed by local municipal land use controls.  As such, land use controls must be noted and analysed.

19. How should an AIC Member Complete a Request for Market Rent using the 0518 Form?

AIC Members often receive requests to provide market rent information. Following are the three scenarios when a client may require a value for market rent and how AIC Members are expected to complete the assignment using the 0518 Form to ensure they comply with CUSPAP 2018.

Scenario 1:  A client requires an estimate of market value and market rent for an identified property.

In this scenario, an AIC Member must ensure that the Market Value with Market Rent report complies with the Real Property Appraisal Standard.

  • To comply, an AIC Member must complete a:
  • Full Residential Appraisal Form – 0518; and
  • Market Rent Addendum OR a qualitative narrative addendum.
  • When completing the Full Residential Appraisal Form – 0518 report be sure to:
    • Tick off “To Estimate Market Value” box in the Assignment Section; AND
    • Tick off “ To Estimate Market Rent” box in the Assignment Section
  • Indicate which Addendums are included in the report within the Certification Section.
  • When completing the Market Rent Addendum, be sure to provide comparable data as well as each data source, which may include the members’ database, property managers, landlords, Kijiji, Craiglist, newspaper ads or billboards.   If a CMHC or other market research report is used as supporting data, it should also be included in an addendum.
  • If there is a current rental contract in place for the property, note the actual rent the property is earning in the report to meet the requirements of CUSPAP 6.2.14, 6.2.17 and 6.2.21. 

Scenario 2:  A client requires only market rent, not market value, on a specific property.

If a stand-alone Market Rent report on an identifiable property is required, the Market Rent report must comply with the Real Property Appraisal Standard. To comply, AIC Members must:

*Please note that the one-page Market Rent Addendum alone will not comply with the Real Property Appraisal Standard. This addendum is designed only to be used in conjunction with a 0518 Full residential appraisal.

Scenario 3:  A client requires a market rent report for a specific community or area with no specific property identified.

This scenario falls under the Consulting Standard since there is not a specific property identified. An AIC Member must complete the report in accordance with the Consulting Standard found here.

20. What if a client requires a Market Rent Report for a specific community or area with no specific property identified?

This scenario falls under the Consulting Standard since there is not a specific property identified. An AIC Member must complete the report in accordance with the Consulting Standard. AIC created a Market Rent Consulting Report form 0518 to assist AIC Members, which can be found here.

Desktop/Drive-by

21. Does CUSPAP allow Desktop or Drive-by Residential Reports?

Yes, provided it meets the requirements, especially 7.1.5., 7.3 and 7.5.2.to ensure the report type, the scope of work and the use of the report are appropriate.

A Member with concerns about the potential liability or risk associated with completing a particular Drive-by or Desktop residential assignment is encouraged to communicate these concerns to their Client and to recommend that a full Residential Appraisal Report is completed instead. If the Client insists on a Desktop or Drive-by Residential Report, the Member should consider declining the assignment altogether.

Drive-by and Desktop Residential Reports provide a viable – if limited – form of valuation. The AIC cautions that limited valuation assignments should be the exception, not the norm, as a full Residential Appraisal Report, performed by a qualified professional appraiser, remains the most reliable means to determine the market value of a property.

AIC Members are required to incorporate appropriate assumptions and limiting conditions, including Extraordinary Limiting Conditions and Extraordinary Assumptions (found here) where there is a partial inspection or no inspection at all. These conditions set out the premise of the report, and provide the necessary context to inform the intended user and to limit the potential liability for the lender and the appraiser.

22. My client has requested a Desktop or Drive-by Residential Report – are these covered by insurance?

Yes, a report that is CUSPAP compliant and is an AIC approved 0518 form will be covered under the terms and conditions of the AIC Professional Liability Insurance Program. However, in the case of Desktop and Drive-by assignments, the liability is limited as stated in Clause 1 of Extraordinary Assumptions and Limiting Conditions: “The Client has specifically requested an assignment with a limited scope of work and results in an abbreviated report format. By accepting this report, the Client and Intended User(s) understand that an inspection of the subject property has not been performed and accept the decrease in the reliability of this report, resulting in a higher level of risk assumed by a user of this report. The appraiser, the appraiser’s firm and/or any employee, director, officer or partner of the appraiser’s firm, as applicable, are limited in liability to $50,000 (fifty thousand dollars). Such limitation of liability applies in the event that anyone makes a claim that the appraiser is in any way liable for performing the appraisal or in preparing the appraisal report, including in respect of any allegations of negligence, breach of contract or for any other reason or claim.”

Failure to include the limiting conditions may result in a loss of coverage.

23. Why would I complete a Desktop Residential Report?

There are situations where a Desktop assignment may be appropriate, such as: the property is inaccessible, an occupant refuses entry, or a client wants a second opinion without disturbing the occupants.

The AIC recommends a full Residential Appraisal Report for most assignments. If an inspection is not reasonable or possible, use an Extraordinary Assumption and Extraordinary Limiting Condition (refer to CUSPAP 7.5.1., 7.10 and 18.23-26).

A full Residential Appraisal Report with an interior inspection may result in an estimate of value that is different from the estimate of value produced by a Desktop Appraisal Report. An interior inspection can reveal expensive upgrades, renovations or significant damage from mould, smoke, fire, animal, vandalism or other crimes. An appraiser may discover a notable difference in the livable floor area when measuring in comparison to MLS or municipal records – it is not uncommon to find additions, improvements or even new outbuildings on a property during an inspection that are not noted on an MLS listing or in municipal records.

24. What are the limitations for a Desktop and/or a Drive-by Residential Report?

A Drive-by or Desktop Residential Report must comply with the Real Property Appraisal Standard.

There are limitations for the use of a Desktop and a Drive-by Residential Report for financing assignments (CUSPAP 7.1.5).

A Drive-by or Desktop Residential Report may be prepared for low risk mortgage financing assignments only under the following conditions:

  • the intended use is first mortgage financing;
  • the lender has determined that the borrower has the capacity and willingness to repay;
  • the loan-to-value ratio is in accordance with lending institution and federal lending policies;
  • reliable data is available on the subject property; and
  • the report includes appropriate assumptions and limiting conditions.

If these conditions cannot be met, you must consider turning the assignment down.

25. Can I complete a desktop appraisal for an insurer such as CMHC, Genworth, Canada Guaranty?

Yes, provided it meets CUSPAP requirements.

If your Intended User is an Lender, AIC recommends adding reasonable limits up to 80% LTV for conventional mortgage lending.
If your Intended User is an Insurer, AIC recommends adding reasonable limits up to 85-95% LTV for non-conventional mortgage insuring.

Example Insurer:

Example Lender:

26. Why would I indicate “first mortgage only” in a Desktop or Drive-by Residential Report?

While it is a not a Member’s role to make lending decisions, it is a Member’s responsibility to ensure the report type, its scope and its use are appropriate for the assignment (CUSAP 7.3 and 7.5.2).

AIC recognizes that in certain situations outside of their control, a Member’s liability may be extended beyond what they intended. A Desktop, Drive-by and every appraisal report is an estimate of value, not a guarantee, so it is expected that an estimate be used within the limits of its intended use.

AIC recommends and requires the inclusion of appropriate limiting conditions to inform the client of the limits of use for a report. Informing the client in advance and in the report helps prevent the misuse of a report and can assist in defending claims where a client may have used the report for an unintended use.

A first mortgage is the original mortgage taken on any one property. It is considered the primary loan on the property and will have priority over all other liens, loans, or claims on a property in the event of default.

Desktop and Drive-by assignments can be done for:

  • first mortgages;
  • renewals of first mortgages;
  • refinancing of first mortgages.

Desktop and Drive-by assignments cannot be done for:

  • second mortgages;
  • non-conforming loans.

If your Intended User is an Lender, AIC recommends adding reasonable limits up to 80% LTV for conventional mortgage lending.
If your Intended User is an Insurer, AIC recommends adding reasonable limits up to 85-95% LTV for non-conventional mortgage insuring.

Example Insurer:

Example Lender:

27. I was not allowed access to the subject property and was not provided with the occupant’s name. What do I put for “Occupied by”?

A Member is responsible for gathering sufficient information about the property.

A Member can and should confirm whether the property is occupied by an “owner”, a “tenant” or it is “vacant” where the occupant’s name is not discoverable or not appropriate.

28. Why does a Desktop and Drive-by Residential Report have Site Improvements?

A Member is responsible for gathering sufficient information from a street/curbside inspection.  While the information a Member gathers for a Desktop or Drive-by Residential Report may be limited, the Member can and should verify the site and improvement data from other reliable sources including: recent listings, assessment record and aerial maps.   If the information is not reliable, the Member should consider a full Residential Appraisal Report or decline the assignment altogether.

29. What types of financial institutions/lenders are governed by OSFI?

Federally Regulated Financial Institutions (FRFI) are regulated by the Office of the Superintendent of Financial Institutions (OSFI). The most common FRFIs are chartered banks.

It is reasonable for a Member to assume that, as FRFIs, chartered banks are adhering to OSFI regulations including those pertaining to underwriting procedures. Therefore, under normal circumstances, it is reasonable for Members to follow their normal practice and procedures to verify that FRFIs have met underwriting procedures; no extraordinary measures should be required.

30. What type of regulations exist for non-FRFIs?

Other types of financial institutions/lenders may be regulated by provincial legislation.  Provincial legislation often contains regulations similar to those of OSFI.  The most common provincially regulated financial institutions/lenders are credit unions.

Relocation Forms

31. What do I use for relocation assignments?

For relocation appraisals, the AIC will be working with the Canadian Employee Relocation Council (CERC). There is no 2018 CERC form, so a member may use the most recent CERC forms and take any steps necessary to ensure the completed form is CUSPAP compliant. Members should confirm with their clients as some relocation companies accept the 0518 Full Form.