Book 1 - Appraisal Institute of Canada

Professional quality, clear communications,
and delivery on time and on budget are the ingredients for a
successful assignment and a satisfied customer.
Make sure you clearly understand
what your client’s needs are and
only accept the engagement if you
are certain that it is within your
realm of expertise. One of the best
ways to limit your professional
liability risk is to limit your services
to those for which you are well
qualified. The Institute’s professional
liability insurance covers members
only for the kinds of services that
are identified in the Standards and
for which members are trained.
If you do not have the know-how
to undertake a particular type of
assignment, consider taking specialized
training such as the courses
available through the professional
development program offered by the
Institute and its provincial associations.
Once you have determined
that you are competent to perform
the work that the client needs to
have done, work with the client to
define the assignment as clearly as
possible. Outline expectations of
both the client and yourself before
any work begins.
An important way to achieve this
is through a written letter of engagement.
Consider giving your clients
a written letter of engagement or
other formal means of outlining what
services you will, and will not, be
providing. Review and sign this document
with your client to ensure that
you share the same understanding
of the work to be performed.
Ensure that engagement letters,
including a detailed description
of the scope of services you will
provide, the limitations of the
services, client responsibilities, and
other agreed-upon engagement
terms, are signed by the client.
Well-prepared engagement letters
are an effective tool in defending
against allegations that you failed to
provide services that were, in fact,
never agreed to. However, remember
that a good engagement letter alone
cannot protect you in the event of a
lawsuit, if the service obligations are
not met.
In addition to a letter of
engagement, all important
communications with clients and
other professionals that may work
for the client should be documented.
This is especially important when
more than one professional is
involved in providing services to the
same client.
Make sure everyone on your
staff documents every step in
the process for all assignments.
Encourage everyone who is involved
to review documentation on any
similar previous actions, before
they initiate any new ones. Review
your documentation procedures.
See if there are any holes in your
process, and take steps to address
them. The Standards require that
all work records be retained for a
period of at least seven years. The
period may exceed seven years
due to such things as legislative
requirements, which may vary
across Canada for differing types of
assignments.
In today’s world, anyone who
performs a professional service is a
prime candidate for a lawsuit. The
appraisal profession is no exception.
Be professional at all times and
ensure that required due diligence is
done on every assignment. Develop
strategies to minimize or limit
exposure to potential claims.
Clarify your responsibility for fraud
detection and take affirmative steps
in each engagement to assess the
potential for fraudulent reporting
of information and corresponding
procedures to provide reasonable
assurance of detection. Electronic
reports that are digitally signed and
sealed with quality encryption software,
such as that offered through
the Institute, offer the best protection
against fraud.
Should a claim arise, you will
want to know how to handle it.
Make sure you know how to report
a claim and what information you
should have handy. You will also
want to know when your policy
requires you to report a claim or
circumstances that could lead to a
claim. Document these procedures
and file them where you can find
them easily.
Exercise the practice of defensive
appraisal in all engagements.
In all stages of an engagement, ask
yourself this question, “Am I able to
defend my work” This should be
the last check on your work before
signing off on a report.
The above measures are by no
means exhaustive and there are
many more ways that a professional
can take care of business
in a manner that protects both the
practitioner and the public. But, in
the end, it boils down to being sensitive
to clients’ needs, and ensuring
that the work product adheres to the
Standards while meeting the client’s
expectations. Professional quality,
clear communications, and delivery
on time and on budget are the ingredients
for a successful assignment
and a satisfied customer.
C a n a d i a n
Appraiser
E C
Volume 51 • book 1 • 2007 valuateur
a n a d i e n 11