Book 2 - Appraisal Institute of Canada

Undue appraiser influence takes many forms.
At the very low end, when an appraiser receives
a request from an appraisal management company
or a lender stating what the value of the
property is, or should be, this may be considered
as improper influence. See CUSPAP Ethics Standard
Comment 5.14 for a discussion on this issue. As
a professional, you are expected to ignore these
statements and to produce your report in an
unbiased manner. It would be inappropriate for you
to contact your client to say that you are unable
to confirm their preconceived notion of value and
seek further instructions.
In the middle ground, there may be the
perception that a client’s instructions may alter
the definition of fair market value, or unduly
restrict you in some fashion. For example, they
might suggest that you are only permitted to use
a comparable within a certain geographic radius
of the subject property or that the adjustments
cannot exceed a predetermined percentage. As a
professional, you should endeavour to satisfy your
client’s request, however, where it is not possible,
it is important to recognize that it is your professional
opinion of value and that, in your report,
you should set out the ways in which this criteria
affected market value or how difficult this made
the assignment. It would be inappropriate for you
to simply comply with these requests without an
independent analysis of market conditions.
The high end of undue appraiser influence may
be where your client directs you to use a specific
comparable or to rely on unsubstantiated facts,
or makes a suggestion that failure to meet the
client’s value requirements may affect your ability
to earn a livelihood. As a professional, your ethical
obligation is to confront these challenges to your
integrity and to not succumb to them. It would be
inappropriate to react to these intimidations and
it is reasonable for you to decline any assignment
where you are uncomfortable with the pressures
being placed on you.
The suggestion that failure to meet a client’s
demands may result in a complaint to the Institute
may also be perceived as a form of undue influence.
However, you should always welcome a
review by the Institute and welcome the opportunity
to publicly expose those who would attempt
to unduly influence the appraisal process.
If an appraiser is concerned about undue influence,
he or she may contact the Counsellor Professional
Practice via email Counsellor@aicanada.ca or
toll free 866-726-5996.
Real Estate Fraud Task Force
George Maurice, AACI, P. App – Chair
Paula Malcolm-Schaller, CRA
Kimberly Maber, AACI, P. App
Ed Saxe, CRA
George Ward, AACI, P. App
To contact this committee by email
fraudinfo@aicanada.ca
Each of these may be viewed as
examples of undue appraiser influence:
(1) by improper influence, through coercion,
extortion, collusion, compensation,
instruction, inducement, intimidation,
or bribery from a party with a
direct interest in the property or the
transaction;
(2) by influence of an appraiser or otherwise
encouraging a pre-determined value, a
direction in value, or a specific result;
(3) by any suggestion that an appraiser’s
livelihood may be jeopardized including
non-payment, failure to timely
compensate an appraiser for work
completed or denial of future work; and
(4) by threat or intimidation of the
submission of a complaint to the
Institute, if a pre-determined value, a
direction in value, or a specific result is
not obtained.
Canadian Property Valuation Volume 52 | book 2 | 2008 Évaluation Immobilière au Canada 33