By Kenneth Smith, AACI
Member, Adjudicating Committee
Many shades of
grey in ethical behaviour
W e spend much of our time
as conscientious appraisers
attempting to ensure our
appraisal reports conform to the rules and
ethical standards adopted by the Appraisal
Institute of Canada (AIC), and detailed in the
for professionals, and the AC will always
consider this principle in their deliberations.
Given that real life is never black and white,
let’s look at the grey areas. By way of example,
consider this: you complete an appraisal for
mortgage lending purposes on a house and
particularly when it happens several times.
This example may seem far fetched, but
stems from an actual case.
When deciding how to proceed in a given
situation, step back, look in the mirror, and ask
yourself: have I disclosed everything of which
Canadian Uniform Standards of Professional small acreage in a remote rural area. There is no the reader should be aware? Is this point clear or
Appraisal Practice (the Standards). organized multiple listing service. Land titles misleading in the way it is presented? Do I have the
Does my report have sufficient support for searches are slow and registrations delayed; necessary expertise within my scope of practice?
the comparable sales adjustments? Are my so they are not commonly completed for Would a ‘reasonable appraiser’ agree with me?
highest and best use conclusions reasonable residential appraisals within the market area. Members are also encouraged to make
and defendable? Did I verify and disclose any The lender makes a loan based upon good use of extraordinary assumptions when
and all of the sales and listing history for the your appraisal, and one year later is forced to warranted. Almost any assignment can
subject property? foreclose. A substantial loss is incurred. It turns be tackled in an ethical manner, providing
It can be very stressful trying to remember out the property sold for significantly less than assumptions and limiting conditions are clear
everything we need to consider as professional your value estimate just