Resolution 2010-8 of the Real Estate Council of Alberta
Section 12 of the Real Estate Act, confirms the Real Estate Council of Alberta (the “Council”) has the authority to make rules prescribing or adopting standards of conduct and business standards for industry members; and,
Council passed a motion on November 3, 2010 approving amendments to Real Estate Appraisers Standards of the rules, and in particular 40(4), 76, 77, 78, 79, 80 and 110. new rule 38.1.
THEREFORE BE IT RESOLVED THAT:
The Rules will be amended as follows:
40(4) In the case of an appraiser or candidate, the executive director must be immediately notified when:
- the appraiser or candidate ceases to be a member in good standing of an appraiser association;
- the appraiser or candidate is no longer able to perform the duties and responsibilities of an appraiser or candidate outlined under these Rules; or
- there is a change in the address of the appraiser’s or candidate’s registered business office.
Division 4 – Real Estate Appraisal Standards
|76 This Division applies to all classes of real estate appraisers and a reference to an appraiser includes a candidate.
77 (1) An appraiser must perform assignments with impartiality, objectivity and independence and without accommodation of personal interests.
(2) An appraiser, when performing an appraisal assignment, must adhere to one of the following standards:
- Canadian Uniform Standards of Professional Appraisal Practice;
- International Valuation Standards; or
- Uniform Standards of Professional Appraisal Practice.
(2.1) When performing appraisals appraisers must:
(a) adhere to the standards of the appraiser association for which he is a member in good standing at the time of the appraisal;
(b) select comparables consistently and in accordance with date of sale, location, age, building style and size and may not ignore comparables available in the proximity of the subject property;
(c) maintain a record of the process followed to identify comparables and all relevant comparables not included in the appraisal report;
(d) ensure that the methodology used for the adjustments is consistent within a report and is verifiable through data where data exists;
(2.2) an appraiser must maintain all documentation, data and formulas used to arrive at an adjustment, an opinion of value or a range of values;
(3) An appraiser or candidate must indicate on his or her business card that they are an appraiser or a candidate, as the case may be.
(4) An appraiser must:
(a) ensure proper management and control of documents or records related to licensing, registrations and related regulatory requirements;
(b) ensure all documents and records related to real estate appraisal services required under the Act and these Rules are maintained or made available by the appraiser for the purposes of a review at the registered business office of the appraiser;
(c) only provide real estate appraisal services in the name that appears on the appraiser’s licence; and
(d) ensure the name of the appraiser is clearly indicated in the course of providing real estate appraisal services.
78 (1) An appraiser must not accept an appraisal assignment that is contingent on the result.
(1.1) An appraiser must not accept an appraisal assignment that is beyond the designation granted to them by their appraiser association unless done in conjunction with a qualified and competent appraiser authorized to sign that appraisal report.
(1.2) An appraiser must not accept an appraisal assignment if the client’s instructions contravene the Act or these Rules.
(1.3) An appraiser must not accept an appraisal assignment if the appraiser has reasonable grounds to believe the assignment will be used for purposes different than the intended use of the appraisal.
(2) An appraiser must not engage in appraisal assignments in which they have or may reasonably be considered by the public as having a conflict of interest.
(3) An appraiser must not perform an appraisal for a client unless, prior to commencing work on the appraisal, the appraiser has professional liability coverage with a minimum limit of $1,000,000.
(4) An appraiser must not knowingly develop, use or permit others to use, an appraisal report when the use of the appraisal may result in any person likely to be deceived.
(5) An appraiser must not:
(a) employ, permit or engage another real estate appraiser to provide real estate appraisal services in the appraiser’s name or on the appraiser’s behalf, directly or indirectly, as the case may be;
(b) employ a person to provide real estate appraisal services unless that person meets the requirements of the Act, Regulations, Rules and Bylaws.
Refusal to provide services
79 An appraiser must refuse to provide further services to a person who:
- instructs the appraiser to prepare an appraisal contingent on the result;
- attempts to unduly influence the appraiser during the appraisal process to prepare an appraisal report to a predetermined outcome;
- instructs an appraiser to prepare an appraisal for fraudulent or unlawful purposes.
Appraisal report requirements
80 (1) Every appraisal report must:
- identify the client or intended users;
(a.1) state the licensing classification of the real estate appraiser;
(a.2) state the standards adhered to by the real estate appraiser;
- state the intended use and purpose of the report;
(b.1) state all assumptions and limiting conditions used to perform the appraisal assignment;
- identify whether the appraisal is current, retrospective, prospective or an update;
- provide the reasonable exposure time for the market opinion;
- identify the effective date of the appraiser’s opinions and conclusions;
- identify the location and characteristics of the property and the interest appraised;
- identify any hypothetical conditions such as land use controls and proposed improvements;
- identify land use controls;
- state the existing use of the real estate and the proposed use of the real estate in the appraisal;
- define and resolve the highest and best use;
- describe and analyze all data relevant to the assignment;
- describe the relevant appraisal procedures applicable to the assignment;
- where comparables are excluded or any usual valuation procedure is excluded, the reasons for the exclusions;
- state the reasoning to support all analyses, opinion and conclusions of each valuation approach;
- state the effect of leases or any type of rental agreement on the value of the real estate when the opinion of value relates to real estate encumbered by a lease or other rental agreement;
- if the appraisal relates to an assemblage, describe the impact the assemblage has on the final value estimate;
- describe and reconcile the data, analyses and conclusions of each valuation approach into a final value estimate;
- report the final value estimate; and
- bear the name and signature of the appraiser who prepared the report.
(2) Where the individual who prepared the report is a candidate:
- that person must be supervised by an authorized appraiser with the appropriate designation and qualifications to review the appraisal; and
- the supervising appraiser must sign the report before it is provided to the client.
(2.1) Before reviewing and signing an appraisal report under subsection 80(2) an appraiser must ensure the candidate is authorized under these Rules.
(2.2) An appraiser who receives a report prepared by a candidate not authorized under these Rules must immediately notify the executive director.
(3) By signing the report the appraiser is confirming the appraisal has been completed in accordance with the standards as described in the report and that he or she accepts responsibility for the accuracy, content and integrity of the report.
(4) A candidate must ensure that the appraiser who reviews and signs the report under subsection 80(2) is authorized under these Rules and has the appropriate designation and qualifications to review the appraisal.
Division 4 – Requirements for Real Estate Appraisers
110 (1) A real estate appraiser shall keep and have available at his registered business office in Alberta all supporting documentation for each appraisal service performed in Alberta.
(1.1) Where an appraiser is employed or contracted by a third party, the appraiser must ensure that their employment agreement does not conflict or in any way alter the requirements under subsection (1) and under section 77 (2.2) of these Rules;
(2) An appraiser shall keep and maintain all records, including any service agreement, work files and notes, in the appraisal file.
(3) The records, accounts and supporting documents in relation to each appraisal assignment must identify each transaction by a sequential code system and must contain the following:
- any service agreement;
- work files and notes;
- the appraisal report; and
- data or documentation to support values of adjustment entries.
(4) A real estate appraiser shall keep the records of its business with respect to appraisal services in Alberta separate from those that pertain to any other business.
Dated at Calgary this 3 day of November 2010