Building Cost Replacement for a Reserve Fund Study or Insurance Purposes - Licence not Required
Purpose: To explain a person does not require a real estate appraiser’s licence to estimate replacement costs for reserve fund studies or insurance purposes.
This bulletin applies to everyone.
If you perform an assessment of only the replacement cost of improvements for insurance purposes or a reserve fund study for a condominium corporation, this assessment is not an estimate of the value of an interest in real estate. It is an estimate of the replacement costs of the building. This does not constitute acting as a real estate appraiser under the Act. You do not require a licence from RECA for such activity.
A real estate appraiser is a person who, for money or other remuneration, estimates the defined value of a specific interest in real estate. Where a person signs a real estate appraisal report where the report makes an estimate of a defined value, the person requires a licence from RECA. A person who holds themselves out as a real estate appraiser or gives real estate appraisal services, requires a licence from RECA.
Black’s Law Dictionary defines "real property" as land and anything growing on, attached to, or erected. Black’s Law Dictionary defines an “interest in real estate” as a fee simple, life estate or other legal interest in land. A building affixed to land is not an interest in real estate.
An “estimate of the defined value of an identified interest in real estate” as set out in the Act, means an estimate of the value of all of the legal interest in the land and improvements affixed to the land including a house, buildings, etc.
In accordance with the meanings of "real estate" and “real estate appraiser” in the Act, appraisal activities falling within the scope of the Act must include an appraisal of real estate, including real property, and in the case of real property, the appraisal must include the land upon which buildings are situated.