Book 1 - Appraisal Institute of Canada

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Volume 54, Book 1, 2010Published by the44Contents6 Time – your most valuable asset7 Le temps – Un atoutdes plus importants!8 The year ahead10 Regard sur l’année qui vient13 2010 AIC AnnualConference14 Responding to arapidly changingmarketplace17 Evolving court ruleson expert evidence18 Bringing your marketing online20 CUSPAP – What’s new for 2010?21 NUPPEC – quoi de neuf en 2010?22 Takingownership – whyyou matter23 Peer reviewersidentify common errors24 Appraisal standards –The rules of art or science?26 Candidates and use of the term‘appraiser’27 Working incollaborationfor change28 WAVOinvites yourparticipation29 Candidates’FAQs for CPY30 Spotlight on ContinuingProfessional Development32 PGCV grads enhance careeropportunities34 Designations/Candidates/Students35 Member satisfaction – homeand auto insurance36 News39 Possible valuation issues withlife lease housing42 Strategic asset management(real property)46 Calendar of EventsAbout our cover • Sur le coverAIC’s Marketing and Communications Committee is assembling a corporate image library to reduce our reliance on stock photographyand to provide a consistent bank of AIC-tailored digital images as part of our brand identity. These will be used in various media applicationsto enhance the AIC brand and services. The initial stage of this project has been completed in the Winnipeg area under the guidanceof AIC member, Laura Kemp. Below is a list of all AIC members who are either featured on this cover or will be in other AIC resources. Wethank them for their collaboration on this project.Le Comité sur le marketing et les communications de l’ICE s’affaire à monter une photothèque afin de réduire le recours aux entreprisesd’archives photographiques et bâtir une banque d’images numériques convenant spécifiquement à la notoriété de la marque de l’ICE. Cesphotographies seront utilisées dans diverses applications médiatiques pour rehausser la marque et les services de l’ICE. L’étape préliminairede ce projet a été complétée dans la région de Winnipeg sous la direction de Laura Kemp, membre de l’ICE. Dans les lignes qui suivent, voustrouverez une liste de tous les membres de l’ICE qui ont été mis en vedette dans ce cover ou qui le seront dans d’autres ressources de l’ICE. Nousles remercions pour leur collaboration à ce projet.Alexander R. Warga, AACI Darryl R. Pratt, AACI Deana Halladay, CRA Erin J. MacKenzie, CRAGary Page, Student Gordon J. Tomiuk, AACI (Fellow) Gordon J. Daman, AACI Gregory W. Fehr, CandidateIan R. Toogood, CRA Kelly L. Clement, Candidate Kenneth F. Smith, AACI Laura J. Kemp, CandidateLinda D. Sherrett, CRA Rebecca L. Dowswell, CRA Robert J. Grycko, CRA Ron M. Neufeld, CRARon E. Suchy, Candidate Surinder M. Pal, AACI Wendy J. MacKenzie, CRACanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada403-200 Catherine Street,Ottawa, ON K2P 2K9Phone: (613) 234-6533 Fax: (613) 234-7197Web site: www.aicanada.caContact us at: info@aicanada.caBoard of DirectorsConseil d’administrationPresident – PrésidentSheila Young, AACI, P.App (AB)President Elect – Président désignéGrant Uba, AACI, P.App (ON)Immediate Past-president –Président sortantGeorge Maurice, AACI, P.App, Fellow (ON)Vice-Presidents – Vice-présidentsKimberly Maber, AACI, P.App (SK)John Yannacopoulos, AACI, P.App (BC)Directors – DirecteursGreg Bennett, AACI, P.App (NL)George Ward, AACI, P.App (BC)Michael Mendela, AACI P.App (ON)Alfred Mullally, AACI, P.App (NS)Andre St-Arnaud, CRA (QC)David Shum, AACI, P.App (AB)David Babineau, AACI, P.App, Fellow (NB)Lorne Mikulik, AACI, P.App (MB)Scott McEwen, AACI, P.App (PE)Chief Executive OfficerGeorges Lozano, MPA, OttawaDirector of Marketing & CommunicationsJoanne Charlebois, OttawaManaging Editor –Rédacteur administratifCraig Kelman, WinnipegAssistant Editor –Rédacteur en chef adjointCheryl Parisien, WinnipegEditorial BoardAIC would like to thank the followingindividuals for their assistance and support:Grant Uba, AACI, P. App – ChairJohn Peebles, AACI, P. AppAndré Beaudoin, CRADavid Lopatka, AACI, P. AppJoanne Hayes, AACI, P. AppRob Grycko, CRAJane Londerville, B.Sc., M.B.A.,AACI (Hon)Associate Professor, University of GuelphThe articles printed in this issue represent authors’ opinions only and are notnecessarily endorsed by the Appraisal Institute of Canada. Copyright 2010 bythe Appraisal Institute of Canada. All rights reserved. Reproduction in wholeor in part without written permission is strictly prohibited. Subscription, $40.00 peryear. Printed in Canada. Les articles imprimés dans ce numéro ne repésentent quel’opinion de leur auteur respectif, mais ne sont pas néces–sairement endossés parl’Institut Canadien des Évaluateurs. Tous droits reservés 2008 par l’InstitutCanadien des Évaluateurs. La reproduction totale ou partielle sous quelque formque se soit sans authorisation écrite est absolument interdite. Abonnement $40.00par année. Imprimé au Canada.* The Appraisal Institute of Canada reserves the right to reject advertisingthat it deems to be inappropriate.** The publisher and the Appraisal Institute of Canada cannot be held liable forany material used or claims made in advertising included in this publication.Indexed in the Canadian Business Index and available on-line in the CanadianBusiness & Current Affairs database.ISSN 0827-2697Publication Mails Agreement #40008249.Return undeliverable Canadian addresses to: Appraisal Institute of Canada,403-200 Catherine St., Ottawa, ON K2P 2K9. Email: info@aicanada.caPublication management, design and production by:3rd Floor – 2020 Portage AvenueWinnipeg, MB R3J 0K4Phone: 866-985-9780 • Fax: 866-985-9799E-mail: info@kelman.ca • Web: www.kelman.caDesign/Layout: Tracy ToutantAdvertising Manager: Kris FillionAdvertising Co-ordinator: Lauren CampbellDo your part for the environment – reuse and recycle.

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President’s MessageLe temps – Unatout des plus importants!Sheila YoungAACI, P. App, Président de l’ICEL’une de mes résolutions pour 2010est de lier mon plan d’apprentissageaux objectifs que j’aimerais atteindre.Cela semble simple mais dans le passé, monamour de l’apprentissage m’a lancée sur desvoies qui n’étaient pas pertinentes à montravail. La concurrence sur le marché estmaintenant plus vive que jamais donc l’idéede posséder un avantage concurrentiel sembleconstructive.Tous les gens sont occupés, moi-mêmeinclusivement. Le fait de trouver du tempspour parfaire ses connaissances est doncdifficile. Nous pouvonspasser le temps à« L’une de mes résolutions pour 2010 est de lier mon pland’apprentissage aux objectifs que j’aimerais atteindre. »faire tant de choses utiles comme gagnersa vie ou même apprécier un peu de loisiret de relaxation. Dans cette veine d’idées,ma résolution consiste en fait à utiliser montemps sagement. Un cours ou deux en soiréeme paraît donc une bonne idée. Aussi, queles cours soient offerts par l’U.C.-B. ou moncollège communautaire local, je peux obtenirdes crédits de PPC pour le temps et les effortsque j’y consacre.Un cours en gestion de projets pourraitavoir une certaine valeur. La gestion deprojets consiste à planifier, organiser et àgérer les ressources dans le but d’atteindre unobjectif. Dans un milieu multidisciplinaire, jetravaille avec des ingénieurs, des comptableset d’autres experts-conseils pour formuler desrecommandations à des personnes ou desclients qui doivent prendre des décisions. Lagestion de projets m’aidera à diriger un projetplutôt que de contribuer tout simplement àdes projets gérés par d’autres. Bien que plusstressant, le leadership est habituellementbeaucoup plus profitable.« L’art de la diplomatie » pourraitbien occuper quelques soirées d’hiverégalement. Comme présidente de l’ICE, onm’a demandée d’agir comme médiatriceimpartiale dans des cas de désaccordentre membres et même entre d’autresassociations d’évaluateurs. Durant mesvoyages au nom de l’ICE et ma participationà de nombreuses réunions sur des questionsintéressant les évaluateurs du Canada, j’aiconstaté que les membres de l’ICE sontconsidérés comme des leaders impartiauxet pratiques dans le milieu de l’évaluation.Le fait de pouvoir expliquer ma positionde façon diplomatique m’aiderait commemédiatrice et faciliterait mon succès auprèsdes experts-conseils et des clients.Une soirée ou deux consacrées à la «projection d’une image professionnelle »semblent également positives. Commeplusieurs autres évaluateurs, je suis plus àl’aise en jeans. Toutefois, est-ce que les jeansreflètent l’image que je veux projeter dansce milieu concurrentiel? Je sais que dans lepassé je n’ai pas toujours été visible pourmes clients. C’est comme si nous travaillonsdans un environnement virtuel. Nousvisitons souvent des propriétés sans quepersonne ne s’y trouve et nous travaillons dela maison. J’aime bien être à l’aise, mais uneimage soignée est probablement plus utile.Je peux toujours me changer avant la partiede billard ou avant de m’installer sur le sofapour lire le plus récent roman.Voyons voir ce que 2010 a en réserve.Si rien de plus, j’aurai au moins obtenudes crédits de PPC et je serai en mesure decoordonner la couleur de mes vêtements.Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 7

CEO REPORTThe year aheadGeorges Lozano, MPAAIC Chief Executive OfficerLooking ahead instead of backwards issomething that we have been advocatingwith respect to the profession for manyyears now. In this respect, I would like to take thisopportunity to offer a look ahead and provide youwith some insight into the programs and activitiesthat we are planning to undertake in 2010.The past year was unsettling for many Canadiansas a result of the economic slowdown and itsimpact on the job market. The appraisal professionwas not spared and a significant number of membersreported lower work volumes and continuedpressure on fees, especially in the residentialmarket. While the economy seems to be turningaround, we expect the year ahead to be challengingin more ways than one.At the end of 2009, membership renewalnumbers were down from the previous year withactive membership now at 4,265 (not including544 retired members) as at the time of writing.Most of this attrition came from Candidates –especially new Candidates who found it difficultunder the economic circumstances to maintaintheir membership in the Appraisal Institute ofCanada (AIC). This is unfortunate given the careerpotential that designated members have and thegrowing opportunities that we see in the realestate marketplace.But the news was not all negative with respectto membership, as 2009 saw enrolment in the UBCpostgraduate certificate in valuation program growto over 700 students. About half of these studentsare already Candidates working towards their AACIdesignation and the other half are expected to jointhe Institute over the next couple of years. As theeconomy rebounds, the Institute is hopeful that its“AIC is looking to 2010 as a challenging year thatwill require us to explore new ways to deliver qualityservices in a highly cost-effective manner.”members will find meaningful work and rewardingcareers offering a wide range of valuation andrelated advisory services. But for now, AIC is lookingto 2010 as a challenging year that will requireus to explore new ways to deliver quality servicesin a highly cost-effective manner.2010 will see the launching of a few newprograms and the improvement of several of ourongoing initiatives. The programs and activitiesundertaken by AIC are linked to strategic objectivesthat are set by the Institute’s Board of Directorsand reviewed from time to time to ensuretheir currency. Last fall, the Board reviewed itsobjectives during a strategic planning session.During that meeting, the Board discussed theInstitute’s stated vision that members will berecognized nationally and internationally ashighly qualified professionals who have theexpertise and integrity to:• provide a broad range of services related tothe principles of value in real estate;• lead projects, initiatives and organizationsrelated to property; and• provide support, strategic advice anddecisions regarding real estate and relatedproperty.To achieve the vision, it is understood thatthe Institute’s professional designations mustreflect the highest standards of professionalism,knowledge and skills within the industry.8Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

The Institute and its members must be recognizedas the leading multi-disciplinary real estate valuationprofessionals and the Institute’s organizationalmodel must be cost-effective and highly beneficialto the membership. It is these concepts thatguide the Institute in its forward planning and theimplementation of its programs.In 2010, AIC will continue to work towardsachieving these objectives by introducing newprograms that advance our goals, and by improvingexisting programs.In the area of Professional Affairs, a numberof initiatives are being proposed to continue tosupport members in their day-to-day work. Onesuch initiative, which has been given the workingtitle of Professional Excellence Program, is aimedat providing information and training primarilythrough the Institute’s website to answer memberquestions, provide best practices, and makeavailable technical information that will helpimprove the quality of appraisal work and help tomitigate problems that can lead to complaints andeven claims.To help Candidates achieve their designationas quickly as possible, the mentoringprogram is being reviewed and willbe revised with the aim of increasingaccessibility to qualified mentors andgenerally improving the mentoringexperience for both the Candidatesand their mentors.In the area of Professional PracticeStandards, last year saw the Institute overhaulthe Standards with the aim of making themcompliant with the International ValuationStandards (IVS). This has been achieved andthe 2010 Standards are IVS compliant. Thiswill provide appropriate guidance to membersinvolved in valuation for financial reporting. Asyou are aware, Canada will adopt internationalaccounting standards beginning in 2011and, under international financial reportingstandards, real property assets will be reportedat market value. AIC’s 2010 Standards wereprepared with this in mind. In the year ahead,additional work on the Standards will includeupdating the Professional Practice Seminar,retraining standards lecturers, and movingto deliver an online version of the DistanceLearning Professional Practice Seminar.With respect to peer review, the program isnow in its second phase of pilot testing and, by allaccounts, has been very successful to date. In 2010,further testing will be conducted with the view ofestablishing peer review as a permanent programof the Institute.In 2009, the Institute adopted a Green Policyand, in 2010, we will explore different ways to ‘gogreen,’ including reducing paper and other costsby increased use of electronic documents, virtualmeetings, and other low carbon footprint technologies.Further, the green concept will be carriedover into the Institute’s research with respect togreen valuation. As a signatory of the VancouverValuation Accord, AIC is looking into the area of sustainabledevelopment from a valuation perspectiveand developing guidelines for green valuation.The Institute’s Research and DevelopmentCommittee has been working on a program for2010 including the identification of research topics.Green valuation has been identified as a highpriority research area and the committee will belooking at the possibility of cooperating with other“In 2010, we will look to the membership to play anincreasingly important part in helping the leadership of theInstitute to make the right decisions and lead the professionforward in these challenging, but also promising times.”“The Institute and its members must be recognized as theleading multi-disciplinary real estate valuation professionalsand the Institute’s organizational model must be costeffectiveand highly beneficial to the membership.”organizations to undertake studies in this emergingarea of valuation.In the area of marketing and communications,2010 will see the continued evolution of theadvertising messages complemented by a seriesof promotional pieces placed in national mediathat will continue to send a strong message toclients and stakeholders that AIC members areleading professionals and real property expertswho can provide a wide range of valuation andrelated consulting services. In addition, 2010 willbe the year that a new recruitment initiative will beundertaken with the aim of raising awareness of theprofession among college and university studentsacross Canada.While member services are an importantcomponent of AIC’s programs, representation is alsoan area on which the Institute has been focusing,particularly in the latter half of 2009. Meetingshave been held with stakeholders and clients in thepublic and private sector to raise awareness of theprofession and its concerns, to provide suggestionsand advice, and to offer assistance with the aim ofprotecting the public and ensuring the integrity ofthe real estate market. In this respect, AIC has metwith representatives from the federal governmentand its central agencies, like-minded associations,the lending community, and related organizations.In 2010, the Institute started anew by hostinga forum of valuation associations to discuss issuesof common concern. The first Advisory Councilmeeting of the year was held at the end of January.These meetings, which are held twice a year,provide the Institute with the opportunity to receiveinput from the stakeholder community as well as toupdate stakeholders with respect to changes at theInstitute and within the profession.In 2009, AIC established a special Task Forceon Appraisal Management Companies. The TaskForce delivered a report to the Board late in the yearContinued on page 12click here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 9

REPORT du Chef de la directionRegard sur l’année qui vientGeorges Lozano, MPAChef de la directionUn regard sur l’avenir plutôt que sur lepassé est une pratique que nous avonsadoptée depuis maintenant plusieursannées au sein de la profession. Dans cette veined’idées, je profite donc de cette occasion pour vousoffrir un aperçu de l’année qui vient et vous donnerune idée des programmes et activités que nousprévoyons amorcer en 2010.L’année écoulée s’est révélée troublante pourplusieurs Canadiens comme résultat du ralentissementéconomique et son impact sur le marchéde l’emploi. La profession d’évaluateur n’a pas étéépargnée et un nombre important de membresont fait part d’une réduction de leur charge de travailet d’une pression continue sur les honoraires,en particulier sur le marché résidentiel. Bien quel’économie semble maintenant caractérisée par unnouvel essor, nous prévoyons que l’année qui vientsera tout de même difficile de plus d’une façon.À la fin de 2009, le renouvellement desadhésions était inférieur par rapport à l’annéeprécédente, le nombre de membres actifs sesituant à 4 265 (sans compter les 544 membres àla retraite) au moment d’écrire ces lignes. La part laplus importante de cette baisse est imputable à lacatégorie des stagiaires, en particulier les nouveauxstagiaires qui, dans les conditions économiques quiprévalaient, ont éprouvé de la difficulté à maintenirleur adhésion à l’Institut. Cela est malheureuxcompte tenu du potentiel de carrière qu’ont lesmembres agréés et les occasions qui se multiplientsur le marché de l’immobilier.Toutefois, toutes les nouvelles au sujet desmembres ne sont pas négatives puisqu’en 2009,plus de 700 étudiants étaient inscrits au certificatd’études supérieures de l’U,C.-B. en évaluation.« L’ICE considère que 2010 sera une année difficile qui nousobligera à revoir notre façon d’offrir des services de qualitéd’une façon hautement efficace par rapport aux coûts. »Environ la moitié de ces étudiants sont déjà desstagiaires qui visent le titre AACI alors que les autresdevraient adhérer à l’Institut au cours des quelquesprochaines années. Avec la reprise économique,l’Institut a confiance que ses membres trouverontun travail sensé et une carrière enrichissante offrantune grande variété de services consultatifs en évaluationet dans les secteurs connexes. Pour le momentcependant, l’ICE considère que 2010 sera une annéedifficile qui nous obligera à revoir notre façon d’offrirdes services de qualité d’une façon hautementefficace par rapport aux coûts.En 2010, nous verrons le lancement de quelquesnouveaux programmes et l’amélioration de nosinitiatives permanentes. Les programmes et lesactivités de l’ICE sont liés aux objectifs stratégiquesétablis par le Conseil d’administration de l’Institutet revus de temps à autre afin d’assurer leurpertinence. L’automne dernier, le Conseil a revuses objectifs lors d’une séance de planificationstratégique. Durant la réunion, le Conseil a réitéréla vision de l’Institut voulant que les membressoient reconnus aux paliers national et internationalcomme des professionnels hautement qualifiés quiont l’expertise et l’intégrité pour :• fournir une grande variété de services liésaux principes de la valeur dans le secteur del’immobilier;• diriger des projets, initiatives et organismes dansle secteur de l’immobilier; et10Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

• offrir soutien, conseils stratégiques et prendredes décisions concernant les biens immobilierset connexes.Pour réaliser la vision, il est entendu que les titresprofessionnels de l’Institut doivent refléter lesnormes les plus élevées de professionnalisme,de connaissances et d’aptitudes à l’échelle del’industrie. L’Institut et ses membres doivent êtrereconnus comme les professionnels multidisciplinairesde choix dans le domaine de l’évaluationimmobilière et le modèle organisationnel del’Institut doit être efficace par rapport aux coûts ethautement rentable pour les membres. Ce sont cesconcepts qui guident l’Institut dans sa planificationde l’avenir et la mise en œuvre de ses programmes.En 2010, l’ICE continuera de poursuivre sesobjectifs en offrant de nouveaux programmesqui nous en rapprocheront et en améliorant lesprogrammes existants.En ce qui touche les affaires professionnelles,un certain nombre d’initiatives sont proposées enappui continu au travail quotidien des membres.L’une des initiatives en question consiste enle Programme d’excellence professionnellequi vise à offrir de l’information et uneformation principalement via le siteWeb de l’Institut en répondant auxquestions des membres, en offrantdes pratiques exemplaires et en disséminantl’information technique quiaméliorera la qualité des travaux en évaluationet atténuera les problèmes qui peuvent mener àdes plaintes, voire même des réclamations.Afin d’aider les stagiaires à obtenir leurs titresle plus rapidement possible, le programme dementorat fera l’objet d’un examen dans le butd’accroître l’accessibilité à des mentors qualifiés etaméliorer de façon générale l’expérience de mentoratà la fois pour les stagiaires et leurs mentors.Du côté des normes de pratique professionnelle,l’Institut a, l’an dernier, remanié les normesde sorte qu’elles soient conformes aux normesinternationales d’évaluation. Ce travail est complétéet les normes 2010 sont conformes aux IVS. Lanouvelle version du document permettra de mieuxguider les membres qui se livrent à des évaluationsaux fins de rapports financiers. Comme vous lesavez, le Canada adoptera les normes comptablesinternationales à compter de 2011 et dans le cadredes normes internationales régissant l’informationfinancière, les biens immobiliers devront êtredéclarés à la valeur marchande. Les normes 2010de l’ICE ont donc été préparées en conséquence. Aucours de l’année qui vient, le travail additionnel surles normes visera la mise à jour du Séminaire sur lapratique professionnelle, le recyclage des conférencierssur les normes et la prestation d’une versionen ligne du Séminaire sur la pratique professionnellequi sera offert à distance.Du côté de l’examen par les pairs, le programmeen est maintenant à la deuxième phasedu projet pilote et semble connaître un succèsretentissant à ce jour. En 2010, les tests se poursuivrontdans le but de faire de l’examen par lespairs un programme permanent de l’Institut.En 2009, l’Institut a adopté une politiqueécologique et en 2010, nous devons explorerdifférentes façons de « virer au vert », y compris laréduction du papier et d’autres coûts en ayant deplus en plus recours aux documents électroniques,aux réunions virtuelles et à d’autres technologiesqui n’ont qu’un faible bilan en matière de dioxydede carbone. De plus, le concept écologique serainclus dans les projets de recherche de l’Institutà la lumière des évaluations respectueuses del’environnement. Comme signataire du VancouverValuation Accord, l’ICE étudie attentivement lesecteur du développement soutenable du point devue des évaluations et de l’élaboration de lignesdirectrices régissant les évaluations respectueusesde l’environnement.Le Comité sur la recherche et le développementde l’Institut s’est penché sur un programmedevant être mis en œuvre en 2010, y comprisl’identification de sujets de recherche. L’évaluationrespectueuse de l’environnement a été identifiéecomme secteur prioritaire et le comité examinerala possibilité de collaborer avec d’autres organismespour amorcer des études en ce sens.Au niveau du marketing et des communications,l’an 2010 verra la prolongation des messagespublicitaires, complémentés par une séried’articles promotionnels qui seront placés dans lesmédias nationaux. Ces outils nous permettrontde continuer à disséminer un solide message auxclients et intervenants à l’effet que les membresde l’ICE sont des professionnels de premier ordreet des experts de l’immobilier qui sont en mesure« L’Institut et ses membresdoivent être reconnuscomme les professionnelsmultidisciplinaires dechoix dans le domaine del’évaluation immobilière etle modèle organisationnelde l’Institut doit être efficacepar rapport aux coûts ethautement rentable pourles membres. »d’offrir une grande variété de services en évaluationainsi que des services connexes de consultation.Également, l’année 2010 verra un nouvel effort derecrutement avec, comme objectif, d’accroître lasensibilisation à l’endroit de la profession chez lesétudiants des niveaux collégial et universitaire àl’échelle du Canada.Bien que les services aux membres soientun élément important des programmes de l’ICE,la représentation est également un secteur surlequel l’Institut a concentré, en particulier durant ledeuxième semestre de 2009. Des réunions ont eulieu avec les intervenants et les clients des secteursprivé et public pour les sensibiliser à la profession età nos préoccupations, et offrir suggestions, conseilset aide dans le but de protéger le public et assurerl’intégrité du marché immobilier. À ce chapitre,l’ICE s’est réuni avec les représentants du gouvernementfédéral et ses agences centrales, ceuxd’associations aux vues similaires, des institutionsprêteuses et d’organismes connexes.En 2010, l’Institut a tenu un forum àl’intention des associations qui œuvrent dansle secteur de l’évaluation afin de discuter lessujets d’intérêt commun. La première réunion del’année du Conseil consultatif s’est déroulée versla fin de janvier. Ces réunions, qui ont lieu deuxfois l’an, offrent à l’Institut l’occasion de sonderl’opinion des intervenants et de les tenir aucourant des changements qui marquent l’Institutet la profession.Suite à la page 12click here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 11

CEO REPORT continuedContinued from page 9.and this report has now been reviewed. In 2010,Board‐approved recommendations will be implemented.An important part of this exercise hasbeen and will continue to be communications withthe membership and with the appraisal managementcompanies to ensure that any problems areavoided and that the public is well served.Overall, 2010 promises to be a busy yearfilled with challenges, but also the expectation ofachievement. In order to succeed, the Institute willrely not only on its staff, but also on the many volunteersserving on the Board and on committees.While volunteers play a crucially important part inthe success of the Institute, the achievement of ourobjectives is only possible with the full support ofthe membership, and that is a priority at all times.In 2010, we will look to the membership to play anincreasingly important part in helping the leadershipof the Institute to make the right decisions andlead the profession forward in these challenging,but also promising times.REPORT du Chef de la direction continuedSuire de la page 11.En 2009, l’ICE a créé un groupe d’études spécialsur les compagnies de gestion en évaluation. Legroupe a présenté son rapport au Conseil vers la finde l’année et l’examen dudit rapport est maintenantcomplété. En 2010, les recommandationsapprouvées par le Conseil seront mises en œuvre.Un élément important de cet exercice a toujoursété et continuera d’être la communication avec lesmembres et les compagnies de gestion en évaluationdans le but d’assurer que les problèmes soientévités et que le public soit bien servi.Généralement, l’année 2010 promet d’êtretrès occupée et remplie de défis mais nous nousattendons aussi à de nombreuses réalisations.Pour réussir, l’Institut compte non seulementsur son personnel mais également sur les nombreuxbénévoles qui siègent à son Conseil et àses comités. En dépit du fait que les bénévolesjouent un rôle essentiel dans le succès del’institut, la réalisation de nos objectifs n’estpossible qu’avec le soutien de tous les membresqui se veut une priorité en tout temps. En 2010,nous inviterons les membres à jouer un rôle deplus en plus important en aidant la directionde l’Institut à prendre les bonnes décisions et àdiriger la profession en ces temps difficiles maiségalement prometteurs.Before any property transactionor site assessment, identify yourenvironmental risks...get ERIS.Canada's BEST source ofenvironmental risk informationfor real estateAn ERIS Report includes and identifies:• Waste disposal sites• PCB storage sites• Spills• Contaminated sites• Underground tanks• Nearby industrial facilitiesInformation Services include:• Aerial photographs • City Directory Search• Fire Insurance Maps • Property Title Search• Topographic MapsVisit www.eris.caCall toll free: 1-888-245-5460Email: info@eris.ca12Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

AIC’s 2010ConferenceCanada’s garden city Victoria, British Columbia, a city rich in history,music, raw beauty, and hospitality, plays host to AIC’s conferencefrom June 2 to June 5, 2010.Victoria Tourism entreats us to ‘Calm on Over.’ If you have not yet been toVictoria, you are in for a surprising treat, however, be forewarned – youmay never want to leave this beautiful part of the country.The Victoria Conference Organizing Committee is very eager to sharethe history, culture and spirit of their beloved city with their colleaguesfrom across the country, while at the same time offering a stellar andprogressive program. Focusing on the theme ‘Green and Global inthe Garden City,’ the committee has sought leading edge speakersof our industry.Join keynote speaker Guy Dauncey as he shares his positive vision ofa sustainable future and how AIC members can translate that visioninto action. To quote one of our members from last year’s conference:“Networking is king!” Following Guy’s opening presentation, joinD’Arcy Rezac as he shares his suggestions for developing effectivenetworking and communications skills.The interesting and diverse slate of programs includes:• Adjustment Reconciliation• Appraisal Succession and Business Valuation• Contaminated Sites: Assessments and Wildlife• Green AND Affordable? Opportunities and Challenges for the AppraisalProfession with the Next Generation of Housing• Changes to CUSPAP 2010 and IVS and IFRS• Due Process – Dancing with Adjudicating• LEED Building Assessment• Skills to Excel in the Next Decade• Complexities in Creating Value Added in Heritage Redevelopment• Aboriginal Land Claims• “You Be the Judge”• Plus many othersWe are also introducing these three sessions of interest to allmembers, but with special appeal for AIC Candidates:• Mentor! How to be a Good One. How to Find One• Preparing for the Professional Competency Interview (BDI)• A Study in Highest and Best UseOur networking evening will introduce you to Victoria at its best as wegather at the Sticky Wicket. No visit to Victoria is quite complete withouta traditional British pub meal and beverage. Conveniently located inthe heart of Victoria, mere steps from the Fairmont Empress, The StickyWicket Pub is a multi-level, multi-room, Cricket-themed, Victorian-erapub and restaurant, featuring rustic and charming décor with plenty ofcharacter that exudes the ambiance of the British Isles.The conference is being held at the Fairmont Empress Hotel, located in theheart of downtown, within walking distance to dozens of restaurants andpubs. The museums and historical section is just outside the hotel doors.We recommend that you book early as space is limited. Victoria is apopular destination during the summer. We invite you to familiarizeyourself with Victoria by visiting: http://www.tourismvictoria.com/.When visiting AIC’s conference website: http://aic2010.aicanada.ca, clickon the travel and accommodation icon and you will see that conferencespecials have been established with West-Jet, Air Canada, Budget and Avis.For further information, please contact Marie-Louise Doyle, AICConference & Meetings Planner, via email at maried@aicanada.caclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 13

Member profileResponding to arapidly changing marketplaceThe advent of Appraisal Management Companies (AMCs) is among the latest developments changing the marketplace in which today’s real estateappraisers must find a way to thrive. Over the years, the market for real property appraisal services has evolved with the introduction of newtechnologies including automated valuations and other risk assessment tools. Products such as mortgage and title insurance have reduced the needfor full appraisals. Appraisal management companies have flourished in Canada and in the United States. And then there is the economy – the downturn thatstarted in 2008 is still being felt coast to coast and it appears that recovery will be slow. The negative impact on AIC members has been significant.Kevin Fedynak, CRADave Cunningham, CRABarry Lebow, CRATake Kevin Fedynak, CRA, for example.Over the past 30 years, he built a trustedrelationship with the major banks. At onepoint, Halvorsen Fedynak & Company Inc.– of which Fedynak is a principal – receivedup to 150 requests per month for appraisalsin the Edmonton area from one majornational bank alone. Those days are goneand requests for appraisals have droppedsubstantially, primarily as a result of theeconomic slowdown. This has resulted in asignificant reduction in Halvorsen Fedynakstaff.This situation is certainly not unique toFedynak. In the Durham Region of Ontario,Dave Cunningham – a CRA since 1984– has also experienced a sharp reduction inhis mortgage appraisal work.Barry Lebow, CRA, has been in theappraisal profession for more than 40 years.He has always seen his work in the world ofOntario real estate valuation as a business,first and foremost. “We lose clients all thetime because it is the natural course ofbusiness,” he notes. For instance, in the1990s, Lebow and his partners built a largeclientele among Canada’s trust companies.When most of the trust companiesdisappeared, the firm’s revenue declinedfrom $1.5 million to $475,000 in one year.“So I went out and found another client,” says Lebow, adding that hegradually built a relationship with a developer specializing in buying andselling apartment buildings. “You have to continually go out and reinventyourself.”Over the years, Lebow has diversified into everything from estatesettlements to litigation work, insurance replacement valuations, divorcesettlements and expert witness appearances. “There is so much morefor an appraiser to do and with higher fees than the mortgage business,”he explains. In fact, today, his firm does anything but mortgage work,something in which Lebow sees no significant revenue.Similarly, Cunningham is now of looking at other options andopportunities. He has already started to do some work in litigation,relocation and power sales, although, he admits, not in any great volume.His attention has also turned towards distressed and contaminatedproperties, an area that is developing into a niche market. “I am looking atopportunities where I might need to reeducate myself and retrain myselfto do certain types of work. There are opportunities out there. Some ofthem are related to work I already do and that I am looking to expand. As aprofessional, I do not feel I have the skill sets yet, so I have been looking tosee what courses are available from the AIC or through other sources.”Lebow sees ongoing education and professional development asessential to maintaining an appraiser’s status as a professional. Continuouseducation is also a key component to attaining the highest level of businesspractice. Lebow divides the development of a business into four levels: i)unknown, ii) commodity, iii) secret expert, and iv) go-to expert.He notes that, after surpassing the entry level point of being anunknown, many appraisers are content to remain at the commodity levelproviding a specified, if often highly honed, service for a fee. However, theproblem with the commodity level is its vulnerability to market supply anddemand, bidding wars and undervaluing of service.14Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

To avoid falling into this situation, appraisers can develop a relationshipwith a client whereby that client will rely exclusively on their ‘secret expert’for information and services. However, these clients may not have a sphereof influence in their workplace. When the contact is gone, the work dries up.Or, as in the case of AMCs, the client’s sphere of influence may not extend tomaking the final decision on how valuations are ultimately assigned.A solution to this dilemma, Lebow explains, is to evolve the business tothe next level and earn a reputation as a ‘go-to expert.’ When the commonconsensus is that particular appraisers are the only reliable resource toaddress a particular issue or need, existing clients will feel compelled toreturn and new clients will seek out their services.“The banks know that a quality job willbe done, we will always be honest withthem and it will be a true value.”Kevin FedynakAlthough education and professional development are obviously criticalto reaching this position as an authority, so, says Lebow, is marketing. Herecommends becoming an authority, not only by reading a wide variety ofprofessional journals and taking courses, but also by giving presentationsand writing articles.Over the years, Lebow has authored countless articles, text booksand courses. He is the guest speaker at many real estate seminars aswell as Ontario Real Estate Board meetings and is frequently quoted asan authority by the Toronto Star and other media. He has also served onnumerous boards, professional organizations and public task forces in thereal estate field.But even appraisers who are just starting out can quickly build theirreputation as an authority with effective marketing. He suggests that anyappraiser can build a thriving business by devoting half an hour twicea week to social media. Lebow himself uses blogs, Plaxo, Facebook andLinkedIn to effectively build his client base and nurture existing clientrelationships.“You have to continuallygo out and reinvent yourself.”Barry LebowDisseminating information does not have to be time consuming. Everytime he reads an article he finds interesting, he sends a copy to clients andcolleagues such as lawyers or insurance brokers. “The feedback is amazing,”he says. “I get business from it. It is becoming very important.”He points out that something as simple as adding a client’s e-mailaddress to his distribution list after performing an appraisal pays hugedividends in terms of building his business. “If I were starting over again,I would data base everybody,” he says.After all, he says, computers are only going to play an increasingly importantrole in the coming years. Some day, they may even become the only way in whichthe future generation obtains its information. Although many CRAs are focusingtheir attention on the AMCs, Lebow predicts that the sophisticated computergeneratedvaluation data and analysis will one day put the appraisal managementcompanies out of business. Until then, however, he sees some appraisers specializingin mortgage valuation as speeding their own demise by undercutting theircolleagues. “How can you do a good job if you are being underpaid?” he asks.“Those who are willing to be the lowest bidders are keeping the industry down.”But not all appraisers are taking this approach. Like Cunningham, Fedynakrefuses to lower his fees to undervalue the thorough professional mortgage“There are opportunities out there. Some ofthem are related to work I already do andthat I am looking to expand, so I have beenlooking to see what courses are availablefrom the AIC or through other sources.”Dave Cunninghamclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 15

Member profilevaluations he performs. However, unlike Cunningham and Lebow,Fedynak is continuing to focus on mortgage valuation, a business he hasworked hard to build over 30 years, and within which he has developed aspecialization for higher end executive homes.He points out that CRAs trained by the AIC place a strong emphasis onquality. “Our code of conduct is comprised of high ethical standards,” he says.“We run our firm as a professional organization.” Halvorsen Fedynak’s residentialappraisers conduct a thorough inspection of properties before signing off onimpartial valuations based on detailed notes and in-depth market research.Fedynak notes that fees set by Halvorsen Fedynak & Company reflectthe quality and high standards of appraisals that will stand up to scrutiny“We are continuing to educate the bankersat the local level as to why they shoulduse AIC appraisers – high ethicalstandards, best professional organizationin Canada, quality appraisals, etc.”Kevin Fedynak“There is so much more for an appraiserto do and with higher fees than themortgage business.”Barry Lebowand legal challenge. “The banks know that a quality job will be done,” heexplains. “We will always be honest with them and it will be a true value.”At the same time, Fedynak is one of the few appraisers in theEdmonton market specializing in executive homes above the one milliondollar mark. These are valuable skills he has honed over his 30 years in theindustry, skills he believes will continue to be in demand as the marketadjusts fees to align with the quality of the product.For this readjustment to occur, it is essential that CRAs educate the banksas to the advantages of having a valuation performed by reputableAIC-accredited appraisers. The Institute welcomes advocacy efforts byappraisers such as Fedynak who continue to express their concerns. “We arecontinuing to educate the bankers at the local level as to why they shoulduse AIC appraisers – high ethical standards, best professional organizationin Canada, quality appraisals, etc.,” says Fedynak. “The driver for the AMCsand for major financial institutions should be the quality of appraisal reportsinstead of price. In addition, I believe the AIC should continue to promote ourorganization to the AMCs and major financial institutions at the national level.”“You have to look for opportunities if youwant to stay in business, if you want tomake a living. That is true for any business.The market is always evolving. Those whoadapt the best, survive the best.”Dave Cunninghamhttp://www.notarius.com/en/clientele_ICDE_en.htmlFor more information cantact Notarius at514-281-1442 of toll free 1-800-567-6703In fact, earlier this year, the AIC met with both the AMCs and the lenders todiscuss these issues. But working with the AMCs and lenders is only one prongin the AIC’s approach to supporting the CRAs in continuing to be successfulwithin the ever-changing marketplace of residential valuation. The other pronginvolves ensuring that CRAs are aware of the tools and resources they need toadapt to what the future will bring. As Cunningham so aptly explains, “You haveto look for opportunities if you want to stay in business, if you want to make aliving. That is true for any business. The market is always evolving. Those whoadapt the best, survive the best.” In fact, they even thrive.16Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

Legal news & viewsBy Ludmila Herbst, LL.B., Farris, Vaughan, Wills & Murphy LLP, Vancouver, British ColumbiaEvolving courtrules on expert evidenceAppraisers providing expert evidence inseveral Canadian courts – includingthe Ontario Superior Court, the NovaScotia Supreme Court and (as of July 1, 2010) theBC Supreme Court – face changes in the courtrules which govern expert witnesses’ reportsand roles. The changes to these trial courts’ rulesinclude (1) new requirements for expert witnessesto state in their reports that their evidenceis given objectively or in accordance with aduty to assist the court (the wording varies byprovince), with this prevailing over obligationsto the party by whom they are retained; and (2)in some jurisdictions, particularly in BC, greaterencouragement for opposing litigants to jointlyretain a single expert. Both types of change areintended to reduce the cost and acrimony associatedwith ‘battles of experts’ and to make expertevidence more helpful to the courts in which thechanges are instituted.Court rules requiring acknowledgment ofexperts’ duties may alter little in the substantiveapproach of those witnesses who belong toprofessional organizations (such as the AppraisalInstitute of Canada) which set standards thatalready encourage objectivity and, indeed,provide for written certifications of impartiality.The new judicial requirement may have a greaterinfluence on the content of reports in previouslyless regulated fields or fields where a ‘hired gun’mentality seems to be widespread; in thosefields, experts required to acknowledge theirobjectivity may think twice about their approach.More broadly, it is possible that partisanshipby an expert witness in breach of his orher written commitment to be objective or toassist the court could now expose that witnessto sanctions directly from the court, rather thansimply from the professional organization, ifany, to which the expert belongs. The case law inthe absence of these court rules has traditionallypermitted courts to take a less direct approach,where they may (1) ‘punish’ the litigant whoseexpert has been partial, by refusing to admitthe expert’s report into evidence or giving littleweight to it (thus leaving a gap in that litigant’scase); and/or (2) criticize experts for lack ofobjectivity in the course of reasons for judgementon the broader issues. What additional steps, ifany, that the courts will take under the new rulesremains to be seen.Certain of the new court rules also address thejoint appointment by parties of a single expertto opine on particular issues. The Nova Scotiarules provide for joint appointment on agreementof the parties. The BC rules go further, both insetting out a detailed protocol for joint appointmentsand in providing that the BC SupremeCourt will have the power to order that the expertevidence on one or more issues be given by onejointly instructed expert, even if neither partyhas requested that such an order be made. Intheory, the appointment of a single expert shouldreduce the expense to parties, as they will be ableto share costs. Given the requirement even forexperts retained by a single party to be impartialrather than to serve as the retaining party’sadvocate, the conclusions in the jointly procuredreport should also, in theory, be the same as inreports which were separately obtained. However,concerns have been raised over how well thistheory will translate into practice, and indeed theconcept of joint appointment has not found itsway into the new Ontario rules (although theydo encourage party agreement on the selectionof court-appointed experts, a different issue).Concerns include that parties’ resources may beconsumed in fighting between themselves on theselection of a jointly appointed expert and theinstructions to be given to the expert, or in retaining‘shadow’ experts (whose evidence cannot,however, be filed on the same point withoutleave of the court) to review the jointly appointedexpert’s conclusions. It will be interesting to seehow the practice develops in this regard.click here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 17

Marketing and CommunicationsBy Glen Power, AACI, P. App, Member, Marketing & Communications CommitteeBringing your marketing onlineMarketing in the twenty-firstcentury means embracing themodern tools that are currentlyavailable to us. While these tools may be muchdifferent than in the past, the fundamentals ofmarketing professional services remain the same.In broad terms, these fundamentals includecreating and managing client and contact relationships,as well as developing and maintainingpositive brand equity.The Internet now offers an array of tools,sometimes referred to as Web 2.0, that allowprofessionals to work on these fundamentals ina virtual environment. These tools include socialnetworking sites such as Facebook and Twitter,as well as weblogs, discussion groups, and web-site portals that allow for brand development.While these tools should not necessarily bethe primary thrust of a marketing plan, ignoringor excluding them from the mix in today’s worldis at your peril. Worse yet than ignoring thesetools is using them incorrectly.Currently, with more than 350 million users– half of whom log in every day, Facebook is themost familiar social networking site out there.“Facebook is a networkingtool unparalleled inmodern times.”Incredibly, 13.2 million Canadians, or 40% of thepopulation, have a Facebook account. While itseems that almost everyone participates withinFacebook these days, there are still those of uswho are somewhat paranoid with respect topersonal privacy issues, and have opted out.Unfortunately, in today’s world, opting out ofFacebook is akin to self-imposed social exile.Like everything in life, benefits usually come atsome cost, and this is also true of Facebook. Whilethere is some tradeoff with respect to maintenanceof personal privacy, many find that the benefits ofsocial connectivity far outweigh the downside.While some only use Facebook for connectingwith family and friends, there is considerablebenefit to including your professional network18Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

into the mix, however, care must be taken thatyour personal Facebook profile is aligned withyour personal professional brand. This meansthat attempts should be made to exclude photosof every drunken party you have attended sincehigh school. While you have little control oversomeone posting a photo of you on Facebook,you do have control over who can see it. Yourprofile must be viewed regularly, privacy settingsmust be carefully managed, and you need toexercise control over who sees what.Furthermore, if you want to use Facebook forcareer or business networking, it may not be theideal place to advance any political, religious orcontroversial causes that are close to your heart.Such activity risks alienation.If care is taken regarding the above, Facebookis a networking tool unparalleled in moderntimes. It keeps you connected to people, allowsthem to know you better, and for you to knowthem better. In short – richer professionalrelationships. It also allows for networking that issticky, i.e., in the transient business environmentof today, it allows you to maintain contact whenpeople are displaced geographically.Many people use Facebook to keep intouch with people they meet at conferencesfor instance. By the time the next conferencerolls around, the business relationship hascontinued to advance thanks to online personalinteraction.When incorporating your business networkinto your Facebook profile, care must alsobe taken with the manner of interaction.Remember that it is about the networking andrelationship building, and not about a salespitch. People do not want you to invade theirpersonal world with sales pitches and spam. Ifyou want to use this medium for advertising,buy an ad which can be appropriately targeted.“Marketing in the twentyfirstcentury meansembracing the moderntools that are currentlyavailable to us.”Do not harass or spam people.There are methods of directly marketingyour company on Facebook, such as setting up acompany page and inviting people to join it, orbecome fans. The Appraisal Institute of Canada,in fact, has such a page – www.facebook.com/AppraisalInstitute.Canada. Once again, however,care must be taken as some users view thisas an invasion of personal space. People donot want to feel as if they are just a captiveaudience for marketing purposes.Twitter is a more appropriate medium formore direct corporate brand developmentand marketing, however, it has a much lowermembership and usage than Facebook. Twitterallows users to post (or tweet) short statusupdates, which other members can follow.This can be a useful strategy for companies,however, the challenge is great in creatingsomething that people want to follow regularly.A blog or weblog, is another medium thatoffers good potential for brand developmentand marketing, as well as for achieving clientservice and loyalty goals. While some maysee the term blog as somewhat cliché andoverused, it is the blog medium or format thatis important. In application, it does not have tobe called a blog.As one of the original social networkingvehicles, weblogs provide a method ofcommunicating to a larger audience,collecting feedback from the community andsubsequently building lasting relationshipswith customers and partners. The blog formatis essentially that of an article that allows forreader interaction in the form of feedback,ranking, concurrence polling, etc.By supporting the self-publishing of richarticles on extremely focused topics, weblogsprovide a vehicle for positioning as thoughtleaders within the marketplace, allowingusers to differentiate themselves from othercompetitors.Blogs can be linked to other bloggers, andif the content is highly rated by members ofthe web community to which it is targeted,it allows for greater ranking and readership.This momentum can then be synergized foruse with other Web 2.0 tools such as Facebook,Twitter, or even live webcasting, etc.Using Web 2.0 applications for marketingpurposes is a broad and complex topic, andtherefore impossible to be explored in depth inthis short article. Therefore, I would encourageyou to inform yourself regarding the aboveapplications, as well as myriad others withinthis class, and work them into your marketingplan in a manner that works best for you.Marketing andCommunications CommitteeBeverley Girvan, AACI, P. App – ChairGlen Power, AACI, P. AppTom Fox, AACI, P. AppLaura Kemp, CandidateDavid Babineau, AACI, P. AppTo contact this committee email:communications@aicanada.caclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 19

NormesPar Louis Poirier, AACI, P. App, Membre, Comité des normesNuppec – quoi de neuf en 2010?Le présent article traitera brièvementles récentes modifications aux Normesuniformes de pratique professionnelle enmatière d’évaluation au Canada (« NUPPEC ») quisont habituellement revues et mises à jour tousles deux ans. La version 2010 est maintenantaffichée sur le site Web de l’ICE et est en vigueurdepuis le 1 er janvier 2010 (http://www.aicanada.ca/cmsPage.aspx?id=69). Plusieurs modificationssont de régie interne ou des modifications quisont identifiées et requises de temps à autre. Dansles autres cas, toutefois, les modifications sontplus importantes. Dans la présente version, lesmodifications les plus substantielles reflètent ladécision de l’ICE d’adopter les International ValuationStandards (« IVS ») comme norme directriceprofessionnelle et se conformer ainsi aux InternationalFinancial Reporting Standards (« IFRS »).Le premier élément, soit celui de se conformer auxIVS, était fort simple. En fait, l’ICE avait déjà une politiqueà l’effet que lorsqu’un point n’était pas couvertpar les NUPPEC, les IVS auraient préséance. Lorsque leConseil a pris la décision de rendre les NUPPEC pleinementconformes aux IVS, la tâche fut plutôt simplepuisque nous étions déjà conformes quasi à 100 %mais on ne pouvait dire de même des IFRS.La mise en œuvre des IFRS vient modifier lecadre dans lequel les évaluateurs sont appelés àévoluer. Le nombre d’évaluateurs visés augmenteet il est probable qu’il continuera de grimper àl’avenir. Les modifications pertinentes aux NUPPEC2010 ne sont pas drastiques de nature et nemodifient pas la méthode d’évaluation mais ellessont néanmoins importantes.Qu’il suffise de considérer les conséquenceset les responsabilités associées à la préparationde rapports d’évaluation pour des compagniespubliques. Ce genre de travail ne doit pas être prisà la légère puisque le devoir de diligence va bien audelà du client et s’étend jusqu’au domaine public. Laconformité internationale et la conformité aux IFRSfont appel à la transparence et à la diligence.Personnellement, je suis d’avis que l’inclusionde la définition 2.24 Évaluateur externe, et leséléments des NUPPEC par rapport aux IFRS etl’évaluation externe tel que discuté dans lesNUPPEC, constitue l’une des modifications lesplus importantes. En consultant le Commentaire7.30 des normes d’évaluation, l’on constate diverscritères qui régissent l’envergure d’un travail à desfins de rapports financiers. Je n’aborderai pas tousles détails dans cet article puisque j’aimerais queÉDITION 2010 DES NUPPEC ET LES DISPOSITIONS DES NIEL’édition 2010 des Normes uniformes de pratique professionnelle en matière d’évaluation au Canada(« Les normes » ou NUPPEC), maintenant affichée en ligne à l’adresse http://www.aicanada.ca/cmsPage.aspx?id=69, répond aux critères de parrainage de l’Appraisal Foundation relativement àsa catégorie de membres internationaux et reflète les Normes internationales d’évaluation commeautorité suscitant l’acceptation des normes régissant l’évaluation immobilière à l’échelle du monde.Avec l’arrivée des normes internationales régissant l’information financière (IFRS) et la transitiondu Canada aux Normes comptables internationales (NCI) en 2011, le Conseil d’administration de l’ICEreconnaît le besoin d’appliquer des normes d’évaluation qui répondront aux exigences des IFRS et àla diversification de la portée des travaux offerts aux évaluateurs de l’ICE.Les normes retrouvées dans l’édition 2010 sont conformes à l’édition actuelle (huitième) desNormes internationales d’évaluation (NIE) publiée par le Comité sur les normes internationalesd’évaluation (CNIE). La conformité à ces normes 2010 assure du même coup la conformité aux NIE àla lumière des IFRS et de l’évaluation aux fins de rapports financiers (ERF).vous fassiez votre propre recherche sur la question.Le meilleur conseil que je puisse vous donnerest de télécharger la version PDF des NUPPEC, derechercher l’acronyme IVS et de prendre connaissancedes modifications. En fait, vous pourriez vouspréparer un bon café ou une boisson énergétiqueet prendre quelques heures pour vous familiariseravec les NUPPEC 2010. Bien que j’aborde le sujetsans cérémonie, j’espère que vous le prendrez tousau sérieux. Le document est vraiment bien structuréde sorte que vous pourrez le consulter facilement àl’ordinateur. Un autre conseil est de consulter la section14 intitulée « Modifications aux NUPPEC depuisla version 2008 » où vous trouverez un résumé detoutes les modifications.Les normes nous différencient et font quenous sommes l’organisation de choix en matièred’évaluation à l’échelle du pays. Les normes de l’ICEsont proactives plutôt que réactives, une caractéristiquedont nous avons raison d’être fiers. Durant larécente crise financière, la solidité du système bancaireau Canada a retenu l’attention mondiale. La soliditédu marché immobilier canadien fait partie intégrantede la stabilité de notre système bancaire. Je me réjouisà penser que l’ICE et nos membres ont joué un rôleimportant dans le maintien de l’intégrité de l’industrieimmobilière par le biais de l’élaboration et de la miseen œuvre de nos normes. Alors que le monde s’affaireà considérer le système bancaire canadien, je suisconvaincu que nos normes d’évaluation immobilièreretiendront également l’attention.Comité des normesBrian Varner, AACI, P. App – PrésidentIain Hyslop, AACI, P. AppChris Perret, AACI, P. AppLouis Poirier, AACI, P. AppGeorge Ward, AACI, P. AppPour contracter ce comité, email :standards@aicanada.caclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 21

Professional AffairsTaking ownership –why you matterBy Grant Uba, AACI, P. App, Chair, Professional Affairs Coordinating CommitteeAs an appraiser, you rarely have thechance for a do over. The result ofevery assignment has the potential toend up as a professional practice complaint or ina court of law. You may use a limiting conditionto reserve the right to correct errors, or to correctyour report should new information come tolight or the hypothetical conditions change, butrarely does this arise. To be the best reasonableappraiser that you can be and deliver excellentservice requires your commitment to you. Yourattitude towards your personal commitment toyour own training and education is your key toconsistency in your appraisal practice.Beyond anything the Appraisal Instituteof Canada (AIC) can do to develop and delivertraining, and to advise you on business practicematters, it is this commitment that gives youpermission to truly call yourself a professional.In the last issue of Canadian PropertyValuation, President Young spoke to you abouttaking pride in our designations and in the AIC,and provided examples of where this can beseen every day. In addition, there is the standardyou hold every day that builds the valuationprofession that, for the most part, is invisible tothe Institute and to your peers. It is you at thefront lines building relationships with your clientsand providing professional appraisal servicesthat define the value of your services. As yougrow and are successful, so too is the valuationprofession elevated in the eyes of the user, i.e.,the consumer of your services.A personal commitment to education is aboutstaying abreast of new developments in theindustry. For example, have you ever consideredthe impact of climate change on your appraisalpractice? At first, you may find this amusing –how does global warming affect my business –“Your attitude towards your personal commitmentto your own training and education is your key toconsistency in your appraisal practice.”but, think about changes the lending communityhas made to stay competitive by offeringgreen mortgages or the introduction of greentechnologies in the home and workspace. UBCnow offers two CPD courses on green valuationthat are not just timely, but intended to provideyou with additional skills with which you canpromote yourself.As a professional, earning your designationgets you on your way to appraisal practice,however, it will be your attitude towardslife-long learning that will set the differencebetween being successful and being leftbehind. I encourage you to give some thoughtto the creation of a personal education planthat balances formal education, experience,mentorship, and, yes, the development of thenext generation of appraisers. The expertiseyou have and new skills you develop to besuccessful can and should be shared. Sharedlearning confirms successful ideas and practicesand challenges old ones.At the same time, volunteering at thenational and affiliated association level affordsthe very best opportunities to give back to yourassociation and to work with your peers fromacross the country.The Institute understands this and has madea concerted effort to focus the professionalpractice process on education at the firstinstance. My simple message today is thatyou need to take ownership in your education,because it matters to you.Professional AffairsCoordinating CommitteeGrant Uba, AACI, P. App, – ChairBrian Varner, AACI, P. App –Chair Standards CommitteeDarrell Thorvaldson, AACI, P. App –Co-Chair Investigating CommitteeSheldon Rajesky, AACI, P. App –Co-Chair Investigating CommitteeLeonard Lee, AACI, P. App –Chair Appeal CommitteeJohn Ingram, AACI, P. App –Chair Adjudicating CommitteeTo contact this committee email:professionalaffairs@aicanada.ca22Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

Peer ReviewBy Michael Garcelon, AACI, P. App, Member, Ad Hoc Committee on Peer ReviewPeer reviewersidentify common errorsThe first year of the Appraisal Institute ofCanada (AIC) Peer Review Pilot Project(PRPP), which focused on reviewingresidential form reports, has recently ended. As thePRPP moves into its second and third years, themandate of the program expands to reviews of alltypes of appraisal reports.The PRPP has two objectives. The primaryobjective is to generate and record actual cost/benefit data regarding a peer review program.Costs are measured in terms of actual outlays formeetings, training, etc., and the time commitmentby AIC staff and PRPP volunteers. Benefits,which are more difficult to quantify, entail howeach member may profit from shared learning,and how the profession and our clients maybenefit from more consistent and higher qualityservices. The secondary objective is to build acost effective Peer Review program infrastructure.Once these two objectives are met, theBoard will be in a position to make decisionsregarding the future of peer review.Now that the first year is completed, wethought this might be a good time to share somecommon issues encountered by PRPP’s reviewers.By far, the most frequent issue arising involvesadjustments made in the direct comparison“Most of the issues identifiedby our reviewers can betraced back to the appraisernot taking the time to fullycomplete the form, andensuring that all data isaccurate and supportable.”approach. Often, our reviewers find adjustments ofa large magnitude, or inconsistent or inappropriateadjustments, with no discussion provided. Now,there may be a good reason for a large, inconsistent,or a seemingly inappropriate adjustment,however, there should be some explanation in thereport otherwise the reader will not understandthe appraiser’s rationale. Even if the adjustmentsare nominal amounts, at a minimum, some discussionis advisable to assist the reader.A second common issue is inconsistent informationabout the subject property. For example,a report may say that there are three bathroomsand then, on the next page, four are listed in theadjustment grid. Or the report indicates that thesubject property is fully renovated, and then theeffective age estimate is equivalent to actual age.These types of oversights can diminish the credibilityof an appraisal report.Very often, our reviewers discover that a reportis completed on an old version of AIC’s residentialform report and is not compliant with the currentversions of CUSPAP. It is the appraiser’s responsibilityto ensure that all reports are fully CUSPAP compliant.Another frequently occurring issue is an insufficientreporting under Scope. The Scope sectionis required by CUSPAP, and it is intended to let thereader understand what the appraiser did and didnot do. Was there a full inspection or were somerooms inaccessible, and, if so, why? Did the appraiserobtain the title, and, if not, why not? etc.Most of the issues identified by our reviewerscan be traced back to the appraiser not taking thetime to fully complete the form, and ensuring thatall data is accurate and supportable. In addition todesigning a report that a reader can comprehend,careful proofreading is advisable.Redacted copies of actual peer reviews havebeen placed in the members section of the AICwebsite: http://www.aicanada.ca/cmsPage.aspx?id=266Adhoc Committee on Peer ReviewLinda Hastings, AACI, P. App – ChairMike Garcelon, AACI, P. AppCherie Gaudet, CRAGerald McCoombs, AACI, P. AppBob Stewart, AACI, P. AppGreg Bennett, AACI, P. AppTo contact this committee, email:peerreview@aicanada.caclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 23

InvestigatingBy Mike Schulkowsky, AACI, P. App, Member, Investigating CommitteeAppraisal standards –The rules of art or science?The dramatic difference in appraised value of the same property certainly indicates that the art of appraisal is not an exact science. Over the years, I have dealtwith appraisals of properties in assessment appeal cases and have found that, in looking at the report of the appraisers, it was difficult to believe that it wasthe same property that was being appraised. The differential in price is so great and this price difference by credited appraisers certainly does not give anygreat confidence in the conclusions reached.– Honourable Justice N. Robert Anderson, Supreme Court of Nova ScotiaDecisions dealing with the standard of care applicable to valuators and appraisers acknowledge that these professions deal with matters of art rather thanscience, and that variations in their conclusions are therefore common... – The Honourable Madam Justice Neilson, Supreme Court of British ColumbiaThese quotations are certainly notevidence of the first, nor will they bethe last time, that the essessence ofthe appraisal profession has been debated.The appraiser who appreciates an element ofsubjectivity would wholeheartedly agree withthe court’s conclusion that our skill is more artthan science. Appraisers should be proud of theirsubjective skill set, yet must continually examinethemselves to ensure their data, assumptions andmethodologies are both consistent and accurate.We are accountable to not only our banks, mortgagors,home owners and investors, but also ourprofessional Standards. On occasion, we hear thederisive comment that the acronym AACI standsfor “appraisal according to clients’ instructions.”This public cynicism stems from incidences ofappraisers relying too heavily on their subjectiveskills or succumbing to client pressures.In contrast to the subjectivity of art, considerwhat appraisers are required to do:• Research the marketplace; observe marketphenomena and record market data.• Collect a knowledge base of sales and, withhighly skilled techniques, create systematicadjustments to reach conclusions.• Determine a predictable outcome through theprecise application of facts and principles andevaluate results through three methodologies.• Present facts, reasoning and beliefs about thesubject in an orderly manner.• Prepare appraisals to allow others to measure,review or rely on our conclusions.• Adhere to the Standards, a system of rules.Does this list of research, testing and hypothesissound more like art…or empirical science?Although the courts accept that appraisal isan impure science at best, we must treat ourprofession with the same respect as we would“A moreconscientiousapproach inestablishingaccurateadjustments andcautiously applyingour subjective skillswill build trust andfurther credibility ofour profession. ”give to genuinescience. In ourestimated values,appraisers makeassumptions aboutsales, rents oradjustments basedon known data.It is our responsibilityunderthe Standards toensure we havetaken great carethroughout theentire appraisalreport to vetthe known dataprior to applyingit to the unknown.With easy access to landtitle registries, MLS and other onlineresources, our toolbox for gatheringmarket information continuesto expand. Rather thanlimiting reports to onlythree sales, theappraisercan24Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada

use (not so scary) statistics to analyze dozensof sales to consider the range, probability andmargin of error. An Automated Valuation Model(AVM) is no substitute for the experience requiredto interpret the market, but is a useful techniqueto assist the appraiser in analyzing appropriateadjustments. In larger cities and homogenousneighbourhoods, we have little defence in claimingthat relevant information is unavailable.Appraisers know that, on occasion, makingparticular adjustments can be difficult. To determinea site size adjustment is simple if sufficientvacant land sales exist, yet developing valueadjustments for condition, landscaping, influencesor market appeal is far more complex. Werecognize the principles are similar and it remainsour responsibility to measure the market carefullyto seek evidence on both macro and micro levelsto develop reasonable adjustments. Accordingto the Standards, the appraiser must describeand analyze all data relevant to the assignmentas well as detail the reasoning supporting theanalyses, opinions and conclusions of eachvaluation approach. (CUSPAP Rules 6.2.15. and6.2.18) Appraisal practice affirms that we do notmake adjustments without supporting marketevidence. If no sales are available, it calls fordiscretion based on experience, which should bebased on historical market data. With adjustmentsfounded on gut feeling, how do you really“just know?”Rather than relying heavily on personal experience,one of the best ways to ensure consistentand accurate appraisal adjustments is to develop apaired sales database. As you root out similar sales,take an extra moment to note differences and filethe information under the appropriate category.This will assist you in determining the range forfuture adjustments. If a client, lawyer or member ofthe Investigating Committee is concerned that anadjustment is unfounded, you are well-positionedto justify your adjustment process.Finally, in applying your adjustments, ensurethey are reasonable and consistent. In manycases, appraisers have applied contradictoryadjustments in different reports or, even worse,within the same report. If you havedeveloped a size adjustment, ensureit is applied similarly for all thecomparables, unless there is a validreason to depart from a consistentapplication.In the appraisal profession,our integrity is anchoredin due diligence. EvenLeonardo da Vinci,who was bothartist andscientist,believedthat a paintermust know notjust the rules of perspective,but all the laws of nature. So too appraisersmust adhere to professional standards. A moreconscientious approach in establishing accurateadjustments and cautiously applyingour subjective skills will build trust andfurther credibility of our profession....Nevertheless, their judgements must be exercised within acceptable standards of skill and expertise, and be based on rational assumptions.– The Honourable Madam Justice Neilson, Supreme Court of British ColumbiaInvestigating CommitteeSheldon Rajesky, AACI, P. App – Co-ChairDarrell Thorvaldson, AACI, P. App – Co-ChairDoyle Childs, AACI, P. AppGerry Gehlen, AACI, P. AppStan Jugovic, AACI, P. AppMike Schulkowsky, AACI, P. AppPaul Beckwith, AACI, P.AppVanit Kumar, CRADan Brewer, AACI, P.AppDeanna Halladay, CRATo contact this committee, email:investigating@aicanada.caclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 25

AppealCandidates anduse of the term ‘appraiser’By Andy Chopko, AACI, P. App, Member, Appeal CommitteeFor many years, Candidates have misusedand applied the term appraiser whensigning appraisal reports and/or introducingthemselves as real estate appraisers to clients.Designations with the Appraisal Institute of Canada(AIC) are earned designations – CRA Canadian ResidentialAppraiser and AACI Accredited AppraiserCanadian Institute.The term ‘appraiser’ gives an individual credibilityas a practicing professional in the appraisalindustry and utilization of the term ‘appraiser’when signing a property valuation or consultingreport is much like implying there is a designationattached to the individual’s name.When licensing was initiated in some Canadianprovinces, there was great debate as to licensing anindividual as an appraiser or as a Candidate. Thesediscussions became critical in the determinationof the class of licensed industry members. Thisalso holds true in terms of the status of industrymembers with the AIC.When applying the term ‘appraiser,’ a Candidateis adding the perception that the AIC qualifiesthat person for signing a property valuation or consultingreport, which is not the case. A Candidateis not an appraiser until designated; much like alawyer is a student at law until admitted to the Bar.Use of the term ‘appraiser’ can only be appliedin conjunction with a designation regarding theprofessional standing with the AIC. Designationsare earned through a rigorous education and mentoringprogram and, until an individual has receivedthe CRA or AACI designation awarded by theAIC, the term appraiser cannot be applied. Thus,Candidates cannot append the title ‘appraiser’ totheir names when signing an appraisal document.Additionally, P. App may be used by AACI membersin good standing, but only in conjunction with theAACI designation as such, AACI, P. App.“Use of the term ‘appraiser’ can only be applied inconjunction with a designation regarding the professionalstanding with the AIC. Designations are earned througha rigorous education and mentoring program and, untilan individual has received the CRA or AACI designationawarded by the AIC, the term appraiser cannot be applied.”In this regard, Professional Practice Committeesof the AIC have encountered complaints of Candidatemembers misusing the term ‘appraiser’ whenthey add the term ‘appraiser’ in signing appraisalvaluation and consulting reports. To clarify – aCandidate must only sign appraisal valuation andconsulting reports ‘as a Candidate’ to avoid misleadingthe public in terms of his or her standing withregard to the education and mentorship programswith the AIC.Designated members reviewing and co-signingappraisal valuation and consulting reports mustensure that the Candidate signs ‘as a Candidate’ andnot as an ‘appraiser.’ If a Candidate signs a valuationand consulting report using the term ‘appraiser’with his or her name, the Candidate is misleadingthe client and/or a member of the public regardinghis or her level of experience, education, and professionalstanding with the AIC.These provisions also apply to business cards andother promotional items. Candidates must not usethe term ‘appraiser’ with their names, as a Candidateis not an appraiser until designated with the AIC.Ethical Standards:5.4.6 “Promoting the Candidate membershipcategory in such a way that it might be perceived asa designation is misleading. AIC Candidate membersmust refrain from using initials or abbreviations thatmight be interpreted as relating to a designated status,i.e. CAN, as this is not an AIC designation, but refers tostatus within the Appraisal Institute of Canada.”5.4.7 “AIC Candidates are able to identifythemselves as a Candidate Member of the AppraisalInstitute of Canada (AIC). AIC Candidate membersmay identify that they are working under the mentorshipof a designated member of the Institute andidentify the mentor’s name and designation.”5.5.4 “It is unethical for Candidate members tosign any appraisal, review or consulting report unlessthe report is co-signed by an appropriately designatedmember.”5.5.5. “It is unethical for affiliate, associate orstudent members to hold themselves out in any wayas a practicing member of the Institute.”Appeal CommitteeLeonard Lee, AACI, P. App – ChairAllan Beatty, AACI, P. App, FellowAndrew Chopko, AACI, P. AppJohn Shevchuk, AssociateGordon Tomiuk, AACI, P. App, FellowTo contact this committee, email:appeal@aicanada.ca26Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

From the Counsellor’s DeskWorking incollaboration for changeUpon joining the Appraisal Instituteof Canada (AIC), all members pledgeto uphold the Code of ProfessionalConduct and Professional Code of Ethics 1 . In sodoing, they agree to comply with the provisionsof the Bylaws, Regulations and CUSPAP.Staying true to this ideal will translate into aprofessional reputation that serves you well.Good ethics are good for business. This shouldbe the focus at all times, especially when clientsdeliberately encourage you to hit their mark,thereby jeopardizing your professionalism andyour livelihood.Much has been and will likely continue tobe written on the root causes of the sub-primefinancial crisis in the US and the global impactthat it has spawned. While some will look at therisk modeling and the collateral valuation process2 to see if they worked as intended, i.e., didthe mathematical models and process functionproperly?; others will look to the conduct of theplayers in the financial services sector. Did theyact ethically and responsibly in the loan originationand underwriting process?Allegations of mortgage fraud litter the landscapein the US 3 . While little beyond anecdotalevidence appears in Canada, we routinely readand hear about the value and impact of mortgagefraud in Canada. Many are vaguely awareof the housing bust of the later 1980s and recallchanges that arose from that, but, essentially,with the passage of time it has faded frommemory and has been replaced with fresh scarsfrom the current crisis. As Hegel says, we learnfrom history that we learn nothing from history.The question that comes to mind out of thisis – can effective change occur without sanctionby securities regulators; criminal sanctionfor misconduct or sanction for professional“ Conduct reflectsindividual ethics andprofessionalism andthe AIC and all itsmembers benefit whenwe remind ourselvesof the obligationswe inherit when webecome members of thisprofession.”Robert PatchettLL.B, CD, AIC Counsellor,Professional Practicemisconduct? The question presumes of coursethat the processes worked, but that someoneacted unprofessionally.This highlights the importance of protectingyour reputation and reminding clients that, atall times, you comply with Generally AcceptedPrinciples of Valuation in completing any assignmentin accordance with the appraisal standardspublished by the AIC. In so doing, reportingundue influence 4 and working in concert withefforts of the AIC Board to advance the interestsof the membership and the profession can onlylead to confirming the vital role appraisers holdin the financial marketplace.By now, much will be known of the AMCTask Force Report and the leadership takenby the AIC Board in acting on those recommendations.It is important to recognize thatchange may be difficult and slow, and thatimplementing change takes time and energy.Nevertheless, when individual members workcollaboratively with peers and the AIC, they caneffect change that will be both positive andrewarding. Conduct reflects individual ethicsand professionalism and the AIC and all itsmembers benefit when we remind ourselvesof the obligations we inherit when we becomemembers of this profession.End notes1AIC Code of Conduct and Code of Ethics, http://www.aicanada.ca/cmsPage.aspx?id=2102Reengineering the Appraisal Process, Collateral RiskNetwork http://www.aicanada.ca/images/content/docs/Valution%20Evolution.pdf3Eleventh Periodic Mortgage Fraud Case Report To:Mortgage Bankers Association, http://www.marisolutions.com/pdfs/mba/mortgage-fraud-report-11th.pdf4Undue Appraiser Influence – Canadian Property Valuation,Page 32, http://www.aicanada.ca/images/content/file/CPV-2008-book-2.pdfclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 27

International Valuation StandardsBy Keith Goodwin, AACI, P. App, Fellow, WAVO RepresentativeWAVO invites your participationThe Appraisal Institute of Canada (AIC)was a founding member of the WorldAssociation of Valuation Organisations(WAVO) and is an executive Board member ofthe organization.The 4th WAVO Valuation Congress heldNovember 24 and 25, 2009 in Guilin, Guang Xi,People’s Republic of China was a great success.More than 360 participants attended theCongress from mainland China and Australia,Brunei, Canada, Hong Kong, Korea, Malaysia,Indonesia, Russia, Romania, Singapore and USA.Co-hosted by the China Appraisal Society, theCongress was addressed by Ms He Bangjing,Vice Minister of the Ministry of Finance, Chinaand President of China Appraisal Society. Aprivate meeting was arranged between theMinister and selected organizations includingthe AIC. The Vice Minister expressed her thanksthat WAVO had held the Congress in China, as itprovided an opportunity for valuers in China tomeet with international counterparts.At the closing ceremony, the Hong KongInstitute of Surveyors (HKIS) was included in theMemorandum of Understanding (MOU) for theportability of designations. Under the auspicesof WAVO, the MOU was signed at the InauguralWAVO Valuation Congress held in Singapore in2006 by the four national valuation institutes:the Australian Property Institute, AppraisalInstitute of Canada, Property Institute of NewZealand and Singapore Institute of Surveyorsand Valuers. The MOU provides designationequivalency to any AIC AACI-designatedmember wishing to work in the other fourcountries, subject only to local designationrequirements.WAVO is supportive of the consistentapplication of valuation standards,methodologies, and practice. WAVO invitesprofessionals to contribute their expertise incompiling the Best Valuation Practice Guide.The topics include valuation fundamentals;methods of valuation; specific valuations; andbusiness, plant and machinery valuation. Ifyou would like to contribute, please write toWAVO at http://www.wavoglobal.org/feedback.asp. WAVO will be compiling a list of expertsin their various valuation fields who can offerconsultancy services.To encourage the involvement of valuationprofession students at an early stage, theWAVO Board has decided to host a yearlycompetition for the WAVO Best ValuationReport Awards. This competition is open to allstudents undertaking valuation courses. Youmay also obtain information on the awards fromthe website: www.wavoglobal.org. There are sixcategories of awards for the different propertytypes. The winner of the awards for eachcategory will be given prize money of US$2,000.To assist developing economies in buildingtheir valuation capacity, WAVO regularlyconducts workshops and courses. WAVOwelcomes enquires from qualified AIC memberswho would be interested in conductingworkshops and courses.28Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

Learning AdvisoryCandidates’ FAQs for CPYBy April Green, Candidate, Member, Learning Advisory CommitteeAs a Candidate member of theAppraisal Institute of Canada (AIC),you are required to complete at leastone university course per year (CPY). This policywas approved by the AIC Board of Directors inOctober 2005 with the intent of encouragingprogress to designation in a timely fashion.What qualifies as a university course?Any course that is a curriculum requirement ofthe CRA or the AACI designation qualifies asa university course. The list of these courses isspecific and may be located on the AIC websiteby inputting ‘Curriculum Requirements’ in thesearch tool on the website: http://www.sauder.ubc.ca/Programs2/RealEstateDivision/CreditProgramsandProfessionalDevelopmentCourses/AppraisalInstituteofCanada/default.htm#coursesIf you have qualified as a Candidate withouta university degree, any university course leadingto the completion of your university degreewill qualify as a course.Are college courses or courses taken atan organization other than the Universityof British Columbia (UBC) acceptable?Yes, provided that UBC has accepted the courseas a formal equivalent to one of the curriculumrequirements. To find out visit: http://www1.sauder.ubc.ca/Programs/Real_Estate_Division/Credit_Programs_and_Professional_Development_Courses/Overview/Equivalencies_and_Transcript_Reviews.aspxWhat year are we talkingabout when we say a course per year?The CPY requirement does not run on a calendaryear. The CPY requirement is always from October1 to September 30. For example, for 2010, youmust successfully complete a course betweenOctober 1, 2009 and September 30, 2010.“As a Candidate member of the Appraisal Institute ofCanada (AIC), you are required to complete at least oneuniversity course per year (CPY).”How do I report my CPY?Log into the ‘Members Section’ of the AICwebsite: http://www.aicanada.ca/member-Login.aspxUnder Online Tools on the right hand side ofthe page, click on the ‘Course per Year’ link.Click on ‘Add a Course’ and fill out theappropriate boxes and attach the supportingdocuments.When am I required to report my CPY?You must report that you have successfullycompleted your CPY requirement no laterthan the last day of the CPY period, whichis September 30. For example, this yearyou are required to report that you havesuccessfully completed your CPY requirementby September 30, 2010. The AIC websitewill allow you to report the completion of yourrequired course at any time during the year sodo not wait until the last minute to post yourcompleted course(s).What happens if Ido not report my CPY by September 30?You will be fined and your Candidate status willbe suspended until the fine is paid and untilyou have met the CPY requirement. To reversethe suspension, you must be able to prove toAIC that you have met the above conditions.You should contact dianea@aicanada.ca withrespect to this matter.What if I have notreceived a grade for my courseprior to the September 30 deadline?This may occur if you are registered in asummer course (June to September) and theresults of your exam or assignments will notbe available until after September 30. In thiscase, the September 30 reporting deadlinestill applies to you and you should followthe same steps for reporting your CPY asdescribed above. However, you should reportthe course as ‘Results Pending’ and attach thesupporting document showing your enrollmentin the summer term. You will then have untilNovember 1 of that year (e.g., November 1,2010) to log back in to the AIC website asdescribed above and report the course ascomplete. After that, please advise DianeArruda of the completion by emailingdianea@aicanada.ca.Learning Advisory CommitteeDavid Highfield, AACI, P. App – ChairApril Green, CandidateWayne Kipp, AACI, P. AppVikki Leslie, Qualifications Officer, AIC - ONCharles Abromaitis, AACI, P. AppDuane Bates, AACI, P. AppDavid Shum, AACI, P. AppTo contact this committee, email:lac@aicanada.caclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 29

Learning AdvisorySpotlight on Continuing Professional DevelopmentFEED YOUR FUTUREwith CPD FRIDAYSThe UBC Real Estate Division continues its series of live, online,web-based seminars or webinars on Friday, March 5, 2010, from8 am - 10 am Pacific time (11 am - 1 pm Eastern time). TheseCPD Fridays webinars consist of a 2-hour presentation with an expertinstructor, who will present an interactive online classroom sessionand answer any questions you may have. By attending the session andcompleting two hours of pre-reading on your own, you will receive fourAIC CPD credit hours. There is no quiz or exam required to receive thesecredits.In this article, we highlight three upcoming webinars in the UBC RealEstate Division’s CPD Fridays series. Feed Your Future!CPD 101: Business Enterprise ValuationPresented March 5, 2010 by Ron Muller, CGA, CBV, CIM, ASAReal property professionals increasingly require an understanding ofbusiness valuation principles. For example, when valuing the real estateholdings of a business, separating the real estate value from a sharesale transaction, or analyzing the real property value in a mixed assetportfolio, there is a complex blend of real estate value and business valuethat must be addressed. International Financial Reporting Standards (IFRS)also brings increasing complexity to the valuation of real estate, whenbusiness entities are involved.This course introduces students to the valuation of businessenterprises, including accounting fundamentals, the reasons that businessvaluations are required, and the basic principles of business valuations.The materials and case studies emphasize both asset-based valuations,such as the liquidation method, plus valuation approaches applicable togoing-concern businesses, including goodwill and its application to anearnings/cash-flow based valuation.This course provides an introduction to a variety of applicationsof business valuation, and does not focus solely on hotel valuation orproperty tax assessment. The issues related to ‘business enterprisevaluation’ for these contexts are touched upon briefly in this course, butare not explored in depth.CPD 125: Green Value –Valuing Sustainable Commercial BuildingsPresented May 7, 2010 by John Peebles, AACI, P. App.A cursory review of real estate promotional literature suggests that ‘greenreal estate’ is increasingly important to market participants. This growthcan be attributed to many causes, including legislative and buildingcodes changes, reducing operating costs, improving leasing potential,and maintaining property value. However, a key reason for the recentinterest in green concerns may be societal change – people are nowdemanding more responsible real estate development that looks beyondthe traditional bottom line.This course examines what a ‘green building’ is in terms ofarchitectural design and building construction practices. The agenciesthat evaluate and rate green buildings are reviewed, most notably theLeadership in Energy and Environmental Design (LEED) program.The course focuses on how green issues impact real estate decisionmaking.We compare the costs of building green against the benefitsto see if green features really do add to real estate’s market value. Is theso-called ‘green premium,’ or increased construction cost for sustainablereal estate, compensated by higher market value? Is ‘green value’ factor fantasy? How does a triple bottom line approach impact real estatedecisions and with what impact on you, the real estate professional?Those offering real estate advisory services will increasingly need toaddress green issues, as this becomes an expected part of a consultant’sdue diligence.30Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

Note that this course focuses primarily on commercial real estate,including office, retail, industrial, and multi-family residential. We leaveresidential issues to the CPD 126 course described below.CPD 126: Getting to Green –Energy Efficient and Sustainable HousingPresented June 4, 2010 by Paula Steele, MA, LEED APSimilar to the commercial uses outlined above, interest in greenresidential applications also appears to be growing. In commercial realestate, the key issues are payback of investment with operating savingsand improved leasability and absorption. For homeowners, the key issueis reducing energy consumption, in one part for reducing energy costs,but also for social reasons: mitigating climate change and reducing one’scarbon footprint.This course assists market participants recognize and evaluate featuresof energy efficient and sustainable real estate. We will illustrate ‘BuildingScience 101,’ in terms of how the components of a home work togetherto control the flow of air, heat, and moisture to maintain healthy indoorenvironments. The economic and governmental mechanisms that drivegreen real estate forward will be explored. The green homes trend isadvancing quickly in Canada – this course looks at success stories worldwide,demonstrating the potential for a greener future.Upcoming CPD Friday webinars:• Friday, March 5, 2010: CPD 101 Business Enterprise Valuation• Friday, May 7, 2010: CPD 125 Green Value – Valuing SustainableCommercial Buildings• Friday, June 4, 2010: CPD 126 Getting to Green – Energy Efficient andSustainable HousingFor more information on these and other UBC CPD offerings,please visit our website: www.realestate.ubc.ca/webinaor www.realestate.ubc.ca/cpdap•prais•al \ -’pr -z l\ n (1817) : an act or instance of appraising; esp : a valuation of property by the estimate of anNEW EDITION!authorized person ap•prais•al \ -’pr -z l\ n (1817) : an act or instance of appraising; esp : a valuation of property by theestimate of an authorized person ap•prais•al \ -’pr -z l\ n (1817) : an act or instance of appraising; esp : a valuation ofAN ESSENTIAL TEXTproperty by the estimate of an authorized person ap•prais•al \ -’pr -z l\ n (1817) : an act or instance of appraising; esp: a valuation of property by the estimate of an authorized person ap•prais•al \ -’pr -z l\ n (1817) : an act or instance ofCREATED BY APPRAISERS, FOR APPRAISERSappraising; esp : a valuation of property by the estimate of an authorized person ap•prais•al \ -’pr -z l\ n (1817) : an act orinstance of appraising; esp : a valuation of property by the estimate of an authorized person ap•prais•al \ -’pr -z l\ n (1817) :Dozens of dedicated valuation professionals debatedan act or instance of appraising; esp : a valuation of property by the estimate of an authorized person ap•prais•al \ -’pr -z l\and discussed the language of real estate to create then (1817) : an act or instance of appraising; esp : a valuation of property new edition by the of estimate The Dictionary of an authorized of Real Estate person Appraisal. ap•prais•al\ -’pr -z l\ n (1817) : an act or instance of appraising; esp : a valuationThis highlyof propertyanticipated,by thestate-of-the-artestimate an authorizedreferencepersonwork includes:ap•prais•al \ -’pr -z l\ n (1817) : an act or instance of appraising; esp : a valuation of property by the estimate of an• Over 5,000 definitions and termsauthorized person ap•prais•al \ -’pr -z l\ n (1817) : an act or instance • Seven of freestanding appraising; esp glossaries : a valuation pertaining of property to business by theestimate of an authorized person ap•prais•al \ -’pr -z l\ n (1817) : valuation, an act or instance statistics, of architecture, appraising; esp construction, : a valuation agriculture ofand the environmentproperty by the estimate of an authorized person ap•prais•al -’pr -z l\ n (1817) : an act or instance of appraising; espThe dictionary will be anessential tool for years to come!Copyright © 2010 Appraisal InstituteORDER NOW!View the full description and order online:www.appraisalinstitute.org/REdictionaryCanadaThe Dictionary of Real EstateAppraisal, Fifth EditionPrice: $85*Member Price: $70*Stock Number: 0730M*plus shipping and handlingclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 31

PGCV gradsenhance career opportunitiesSince 2003, the Appraisal Institute ofCanada (AIC), with its education partner,the Real Estate Division, Sauder School ofBusiness, University of British Columbia, has offeredthe UBC Post-Graduate Certificate in Real PropertyValuation (PGCV) leading to AIC’s AACI designation.This program presents a unique opportunity forgraduates who hold a business degree, or a degreewith a business focus from a Canadian university toearn a prestigious post-graduate certificate in realproperty valuation, while fulfilling the educationalrequirements for designation by AIC.For more information on admission andrequirements for the UBC/AIC post-graduatecertificate in Real Property Valuation, visit AIC’swebsite at http://www.aicanada.ca/cmsPage.aspx?id=53 or UBC’s website at UBC/AIC Post-Graduate Certificate in Real Property ValuationThis year we congratulate 48 graduates ontheir achievements:What prompted you to pursue the PGCV?I knew early on that I wanted to be in the realestate field. I decided to pursue a career inappraisal and was pleasantly surprised to findout that my BBA degree from Schulich School ofBusiness was going to be a great stepping stone.PGCV gave me an opportunity no other universityor college program was able to provide.- Oksana Vialykh-Patti, BBAAfter returning to appraisal after many years inasset management, the educational requirementsto the AACI had changed. The PGCV is agreat, concise program that recognized my businessdegree, gave me credits for courses taken andprovided a clear path to an AACI designation.- Sandra FrankeKristy Lee AllisonSohaib AnsariDean BauckSimon CarlesenMarilyn CarrJohn CarterJimmy CheungEng DallasAdam G. DickinsonGlen William DollMartin DuranceauSheila A. FitzpatrickSandra R. FrankeGord FrenchAndrew GarrettDarren GibbonsJordan GillespiePhilippe HebertMichael HeffernanDavid HornDanielle HouleJonathan KamNelson KarpaSheena KereliukComments from recent graduatesONABBCBCONONONSKNBABQCNBBCBCONABABONABABSKABMBABI am an engineer who was appraising industrialprojects before immigrating to Canada. Once in thiscountry, I wanted to get back into my professionand I saw this program as an opportunity for provingmy credentials to Canadian employers- Sohaib AnsariMy decision to pursue the PGCV coincided with mydecision to pursue a career in real estate appraisal.When I learned about the PGCV, I had just completeda commerce degree and was looking to changecareers. I found that appraisal was a good matchwith my previous experience as a land surveyorand education in finance and economics. The PGCVallowed me to make a quick transition into appraisal,while also leading towards a professional designation.- Dallas EngNatalia KurantAdam LawrensonTiffany LeePaul LimacherPhilip LoganAndrew MacleodArdeane MaharajJonathan MatthewsNicholas John MirskyPatrick NeptuneMaura E. O’MelinnMarcel A.D. ParsonsAndy PhamErika PopovicsRobert C. RivingtonTrevor RobertsonKenneth R. RutherfordJason M. SchellenbergSally SetoMaria SurinaCurtis A. TravisOksana Vialyka-PattiMark WojcichowskyMeng Mandy ZhaoQCBCBCABBCABBCBCBCONBCNSBCABONSKABMBONONONONABBCNow that you have completed the program,do you feel it was a good decisionfor your career in the property industry?I think the materials and projects are first rate. Theprojects give you an excuse to interact with otherreal estate practitioners and gain valuable insights.PGCV has helped me transition into a role were I amresponsible for analysis of several real estate assetclasses across Canada.- Andrew GarrettAbsolutely. It allowed me to capitalize on skillsacquired through my business background, such aseconomics and finance, and gave me the necessaryknowledge to understand and apply real principlesof value in the workplace.- Adam Lawrenson32Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

The PGCV is well rounded and comprehensive programthat not only trained me to become efficientin valuation services, but also real estate investmentanalysis. The PGCV’s multi-disciplinary approachwill help me become a leader in many facets withinthe real estate industry, and I am pleased to havecompleted the program.- Darren S. GibbonsCompleting the PGCV has been beneficial to mycareer right from the beginning of the program.Enrolling in the program and commencing withthe coursework enabled me to get into my firstappraisal position. The coursework gave me theknowledge to advance in my position and completingthe program opened even more opportunities.After only three years since I began the program, Iam right where I want to be in my career.- Dallas EngWould you recommend thisprogram to other business graduates?I have recommended this program to every businessgraduate that has shown an interest in the realestate sector or employment at Cadillac Fairview.Many people tell me they are interested in realestate, but have nothing on their résumé to supportthat interest. I let grads know that having thisprogram on their résumé demonstrates they have abody of real estate knowledge that is more comprehensivethan a CFA or other business designations.- Andrew GarrettIf real estate valuation is of interest to you, and youalready have a degree in business, this program isdefinitely the next logical step. In just two years,you can complete the program at a reasonable pacewhile working full-time, or you can finish sooner ifyou have the spare-time and the drive.- Adam LawrensonI would recommend the program to anyone witha finance/commerce/accounting background whohas a passion for the value of property and thedevelopment process, and as a bridging program forthose who have foreign valuation credentials andexperience.- Ardeane MaharajWhether you intend to pursue an appraisal designationor not, you will gain valuable knowledgeof real property valuation; applicable to manyprofessionals in the industry. The program bringstogether all aspects of a commerce degree andapplies them toward real estate. A commercedegree has more value once focused towards aspecialization.- Dallas EngDo you feel that adding the PGCVto your professional credentials hasenhanced your career opportunities?I have found that the PGCV is not widelyrecognized in the real estate industry outside ofthe appraisal profession. Perhaps because it isa relatively new qualification. I don’t think thePGCV credential enhances career opportunitiesin its own right beyond offering a short cut toAACI designation. Like all qualifications, its truevalue will be through effective application downthe road.- Philip LoganThe PGCV has enhanced my career opportunitiesin the sense that the program is industry-focusedon property valuation, but, at the same time,educates potential property valuers about specializedopportunities in the field, e.g., appraisalreview, hotel valuation, agricultural valuation,etc.- Ardeane MaharajWith specific reference to the appraisal industry,I do not believe my career opportunities havebeen broadened by completing the PCGV.Obtaining designation is what employers seekonce you have field experience. However, forrecent graduates with no experience in theproperty industry, enrolling in the PGCV programis likely to make you attractive to prospectiveemployers.- Gord FrenchEven if I were not pursuing the AACI designation,the PGCV alone has ensured me a career in thereal estate industry.- Dallas EngAre there any other commentsconcerning this program that youwould like to share with the AppraisalInstitute or prospective PGCV students?This program allows individuals to meet all the necessaryeducational requirements for the AACI designationby taking one-third the course load. It assumesthe student has a basic knowledge of economicsand finance and is structured to provide the meatand bones of valuation – including residential andcommercial – while giving students the flexibility tochoose electives that suit their individual needs.- Adam LawrensonIn an era where the quantity and perhaps quality ofaccredited members is declining in many professions,I believe that the program can play a significant rolein mitigating the impact of this trend in valuation. Iwould advise prospective students to have a genuineinterest and commitment in property before enrollingbecause the program is immersive and assumes thatstudents are doing this for a career, and not a hobby.- Ardeane MaharajPGCV is a very well developed program. It offersaccelerated access to AIC designations, which I woulddefine as ‘intensive accelerated access.’ My advice toall prospective PGCV students is to stay focused duringthe studies, follow through all the assignments, readall the materials provided by the course, and enjoy theknowledge you gain through each course. The bestpart of the program that it is very interesting, wellwritten and challenging. I am grateful to AIC and toSauder School of Business for giving me the possibilityto reach my ultimate career goal in a short period oftime and for the extensive support that was providedto me during the course of my studies.- Natalia KurantMy biggest complaint with full-time studies whileworking on my commerce degree was not being ableto apply the knowledge learned right away. On manyoccasions throughout my applied experience program,the knowledge learned through PGCV was immediatelyapplied in real estate reports, which was verygratifying. In turn, this process enhanced my learningexperience.- Darren S. Gibbonsclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 33

Designations/Candidates/StudentsAIC designations granted / Désignations obtenues de l’ICEThe Appraisal Institute of Canada (AIC), together with the provincial associations and the provincial bodies affiliated with the AIC, commend the followingmembers who completed the rigorous requirements for accreditation as a designated member of the AIC during the period October 14, 2009 to January 22, 2010:L’Institut canadien des évaluateurs (ICE), en collaboration avec les associations provinciales et les organismes provinciaux affiliés à l’ICE, félicitent les membressuivants qui ont complété le programme rigoureux d’accréditation à titre de membre désigné de l’ICE durant la période du 14 octobre au 22 janvier, 2010:AACI, P. AppAccredited Appraiser Canadian InstituteWe welcome and congratulate these individuals as fully accredited members of theInstitute through the granting of their AACI, P. App designation.Accueillons et félicitons comme membres pleinement accrédités de l’Institut et leuraccordons avec fierté la désignation AACI, P. App.AlbertaDarren StephenGibbonsMichael HelmJohn J. HughtonAndrew MacLeodMichael S. MurphyMark OverdulveW. WongDale D. YachimeBritish ColumbiaAndrew R. BisnarDavid A. BornholdMichael ThomasCartwrightAlan Alexander DuncanMichael A. MayhewHenry Yixin WangNova ScotiaSheila OrrMarcel A. D. ParsonsGregory J. RatchfordNew BrunswickAdam Dickinson(effective June 30 2009)Craig HennigarPrince Edward IslandNicolas FarquharsonQuebecKathleen EllisJoé TremblaySaskatchewanRoxanne HarrimaDenise C. SmithCRACanadian Residential AppraiserThese members are congratulated on the successful completion of the CRAdesignation requirements.Nous félicitons ces membres pour avoir complété avec succès le programme menant à ladésignation CRA.AlbertaJaqueline H. BothColin J. JacksonGreg D. MartineauKaren Elaine WaldhoffBritish ColumbiaShaun M. AusenhusChris A. HohneKurtis R. TaylorLuke VenhuizenWendy K. WoodNew BrunswickMichael O’KaneJean-Paul PerronNewfoundlandJason B. OakeNova ScotiaDonald R MyattOntarioTony Che Hong LawDavid K. C. WongQuebecMiroslav BauerMario BriseboisEric DagenaisLise FaucherMarilyn HunterNathalie PlanteCandidates / StagiairesAIC welcomed the following new Candidate members during the period October 14, 2009 to January 22, 2010:L’ICE souhaite la bienvenue aux personnes suivantes qui ont joint les rangs des membres stagiaires durant la période du 14 octobre au 22 janvier 2010:AlbertaJason M. BaldwinAndrea HlewkaAmin KarsanBritish ColumbiaHarpreet BhullarAmanda BoruThomas BrentMandeep DhaliwalMichael D. FosterAngus S. HeapsScott HumphreysLeighton KirkbrideJenelle B. KonradEdgan KwokKeith LeungDoris A. MuellerRory MunroMark O’DonnellLisa PynnNolan Alexander RiversFelicia RobertsonMaibrit SorensenBruce StorryAmanda J. WilmsRebeka ZajacManitobaMelanie BergenAstrid De BruynDwayne GranthamMelissa ShawBarjinder S. ThindNew BrunswickFrederick J. McAvoyNewfoundlandGordon Todd LaneNova ScotiaJeffrey CuznerDeidre L. GeorgOntarioNajeeb AhmadSean C AshworthDov BeckTilakraj BijlaniTom CarambelasMatthew W. CornellClaudia Andrea FreireAlfiya GilitwalaEtienne GoudreauKerry HartChristopher M. LacasseRyan LeBretonJudy LokAndrew Nathan LoveTyler G. MacDonaldAlireza NafariRobert SaarnaBaljit SainiRussell Dennis SchroederSally SetoMalcolm StadigTyrone Anthony SutherlandQuebecLaura Anne Lam Voai ShunYoungjeon WonSaskatchewanDavid ChristophersonStudents / ÉtudiantsThis category of membership serves as the first step on the path to designation for those completing their requirements for Candidate membership.Students considering the appraisal profession as a career option are also welcomed to this category of membership.Cette catégorie de membre constitue la première étape sur la voie de la désignation pour ceux qui s’affairent à compléter les exigences de la catégorie de membre stagiaire.Les étudiants qui contemplent une carrière comme évaluateur professionnel sont bienvenus à joindre cette catégorie de membre.British ColumbiaSuzanne M. EwenMarion S. LochheadStephanie McNeilJessica L. ToppazziniChelsea ZarftManitobaStephen W. NeedhamDebbie PieterseOntarioDevon M. HowsamShardul L. JaniJeffrey W. Miller34Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

Home and auto insurance for AIC members –member satisfactionAs a memberof the Appraisal Institute of Canada (AIC), youcan save on home and auto insurance with group rates from The PersonalInsurance Company.In the area of member services, AIC offers a member benefit for all AICmembers in the form of The Personal Home and Auto Insurance. The programoffers members a choice of home and auto insurance at competitive prices.How competitive are they? Our members have spoken.“I talked to a representative; she was very polite and helpful. The whole processtook minutes; I received my policy in two days and saved $600. My wife alsochanged and she saved $200. I would recommend all members contact ThePersonal for their insurance needs.”- Richard Sager, CRA“I have been with The Personal Insurance Co. for a couple of years. Not only arethe rates very competitive, the service is exceptional as well. I have them for bothhouse and auto insurance. I had a car accident last fall (not my fault) and I wascovered with a car rental for three weeks while my car was being repaired, andno rate increases. A huge improvement over the last company I was with.”- Lee Anne Holmes, CRAYour auto, your home, your privilegesAs a member of The Appraisal Institute of Canada, you have access toprivileges not available to the general public.Auto insurance• Preferred rates for your auto, motorcycle, motor home, snowmobile, orrecreational vehicle.• Are you or is someone under your policy enrolled in a college oruniversity? Save even more on top of your group rate.• Want great coverage for the best value? Choose the Deluxe Option, acombination of popular extras packaged at a lower price.• Hybrid vehicle? An additional discount is available.Home insurance• All-risk property insurance protects you from the basics of fire, theft,and liability.• Tailored coverage options protect items such as software, jewellery,swimming pools, cottages, recreational vehicles, and watercraft.• Identity Theft Assistance is included with all property insurance policiesat no extra charge.“I switched to The Personal years ago. Thought that a group plan would not benefitme. I dropped $1,200 in the first year. When I bought the truck a few months ago,they gave me an outstanding rate. Absolutely pleased, highly recommend them.”- Barry Lebow, CRA“The one company I was amazed at for their quote was The Personal InsuranceCompany, which provides insurance to members of the Appraisal Institute on agroup premium. They quoted $385 less per year for both my wife’s and my auto.I have learned over the years to expect to get what you pay for, and so the naturalquestion is – has anyone out there had any experience with The Personal,and, if so, how was it?Thanks for your respective responses; what you gave mewas the confidence to switch. I did switch based on members encouraging me toget a quote and the savings in premium was spectacular.”- Roger Brugess, AACITake advantage of your home and auto group insurance plan.Get a quote from The Personalwww.thepersonal.com/aicanada1-888-476-8737click here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 35

NewsResearch and Development FundThe Appraisal Institute of Canada (AIC) Research andDevelopment Fund was established by the Institutein 1973 as a Registered Canadian Charitable Organizationto conduct research studies in the field of realproperty valuation techniques and procedures, withparticular emphasis on the effects of current economicdevelopment and real property value. Overthe years, the Fund was developed and maintainedthrough generous contributions from the membershipof the Institute. In recent years, greater focushas been placed on the Fund and a new mandatealong with a new committee has been establishedwith the aim of reinvigorating the program.The Fund and its work is anchored in theInstitute’s Strategic Plan, which states “new methodologiesand practices will be developed, supportedby innovative core education and continuingeducation programs, involving the principlesof value in real estate and related property.”The Fund’s research program conducts studiesin the field of real property valuation techniques andprocedures, with particular emphasis on the effectsof current economic development and real propertyvalue. The Institute encourages research thatsupports its mission to protect the public interestand support members by ensuring high standardsof professional real estate and related property advisoryservices. Consideration will be given to projectsrelated to the application of existing valuationtechniques to new areas as well as the developmentof new concepts in valuation.The Fund is overseen by the AIC Board ofDirectors. As such, the Board approves all researchprojects and authorizes the disbursement of anymonies from the fund.The Research and Development Committeeis chaired by Carole Cowper, AACI and includesmembers Keith Goodwin, AACI; Glen Power, AACI;Professor Jane Londerville, AACI (Hon) from theUniversity of Guelph; and Scott McEwen, AACI, whois the AIC Board liaison.The Research and Development Fund Committeeestablishes the R&D research agenda by identifyingpertinent research topics and issuing requestsfor proposals published with the aim of attractingBy Carole Cowper, AACI, P. App, Chair, R&D Committeequalified researchers in the field and encouragingthem to submit letters of interest. Specific funds willthen be allocated to qualifying projects.The committee has been developing a list ofcurrent topics which satisfy the Fund’s researchcriteria as outlined in the terms of reference. Ofthese, sustainable/green valuation has emerged as ahigh priority research topic in both commercial andresidential properties. The committee is interested ininitiating research which could identify and developeffective methodologies to determine the contributionof sustainable/green factors to market value.The Fund is an important research tool that canhelp the Institute to advance appraisal practice byensuring that it is state-of-the-art. Moreover, theresearch and subsequent publication resulting fromthe Research and Development Fund will be sharedwith the international community as Canada’s contributionto intellectual transfer in the appraisal field.The appraisal community and interestedresearchers are encouraged to submit topic ideas(R&D@aicanada.ca) that satisfy the Research andDevelopment Program’s criteria. The Research andDevelopment Fund also welcomes letters of interestfor joint research initiatives from like-mindedorganizations in Canada and abroad, where suchproposals are germane to the real property appraisalresearch field and are of mutual interest.The Research and Development Committeewill consider all proposals that meet the Researchand Development Program criteria, whether submittedby members or non-members. Proposalsfrom outside Canada will also be consideredprovided that they are written in one of Canada’sofficial languages.The research must extend the knowledgeof those in the valuation discipline and must berelevant to the practice of real estate valuationwithin Canada. Any study/paper produced willbecome the property of the AIC and will becopyrighted so that further use may be made onlyupon written permission of the Institute.Research grants will be awarded annually toindividuals or organizations whose project proposalsare recommended by the Research and DevelopmentCommittee and approved by the AIC Board.Letters of interest will be judged on their overallquality. They should have high intrinsic value andintellectual or creative merit – posing a significantquestion, exploring an important issue, addressing achallenging problem, or expressing a new idea. Theletter should also hold out the promise of makingworthwhile contributions to the profession and bewell-conceived, with achievable goals, a realisticschedule, and an estimate of budget. Proponents ofsuccessful Letters of Interest may be asked to providea more detailed research proposal before theirfunding commences.The reports resulting from approved researchprojects will be published by the Institute anddisseminated nationally and internationally.Proposals should be emailed to R&D@aicanada.caor mailed to the address noted below.Tax deductible donations to the Research andDevelopment Fund can be made payable to: TheResearch and Development Fund of the AppraisalInstitute of Canada, 403 - 200 Catherine Street,Ottawa, Ontario K2P 2K9In memoriamThe following member of the AppraisalInstitute of Canada has passed away. Onbehalf of everyone connected with theInstitute and the profession, we extendour sincerest sympathies to the family,friends and associates.Le membre suivant de l’Institut canadiendes évaluateurs sont décédés. Au nom detous ceux qui oeuvrent de près ou de loinau sein de l’Institut et de la profession,nous exprimons nos plus sincères condoléancesà le familles, amis et associés.John Kneale, Candidate RetiredSurrey, BC36Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

Green Policy adoptedAt its October Board meeting, the AppraisalInstitute of Canada (AIC) affirmed itscommitment to minimizing the environmentalimpact of the association’s activities throughcontinuous improvement in environmentalperformance. In its delivery of programs andpolicy development, AIC will seek to ensurean environmentally responsible approach foroperations and initiatives.The Board recognized that, in pursuingthe Institute’s strategic objectives, there isopportunity to play a positive role and make acontribution towards a greener environment.By exercising proper control over its activities,the Institute will promote the use of sustainableresources and discourage wasteful or damagingpractices.Guiding Principles1. Compliance with LegislationWe will comply with relevant environmentallegislation2. Resource and Energy ConservationWe will conserve our use of natural resourcesand energy to the extent practicable.3. Waste and Pollution Preventionand ManagementWe will reduce to the extent practicable thequantity and degree of hazard of the wasteswe generate from our operations, and handlethem in a safe, legal, and responsible way tominimize their environmental effects.We will also reduce to the extent practicablethe direct and indirect emissions of greenhousegases and other harmful air pollutantsfrom our operations and travel.4. Reduction of Supply Chain ImpactsWe will work with others in our supply chainto help ensure adverse environmental impactsand risks associated with our operationsare reduced and properly controlled, andenvironmental benefits optimized.5. CommunicationsWe will promote awareness and understandingof environmental issues among staff,volunteers, and the membership.Some of the initiatives will include:• An increase in the use of technology enabledvirtual meetings and a reduction in in-personmeetings.• Continued use of eInvoices for annual membershipdues sent out each August.• Availability of online membership duesreceipts for convenient member accessthrough their member profile.• Contingent on budget approval, the DistanceLearning Professional Practice material will beprovided online in 2011.Advisory Council 2010The Advisory Council is the Appraisal Institute of Canada’s primary advisory resource on current andemerging needs in the public and private sectors for real estate appraisal and related services. Itincludes senior representatives from the public and private real property industry sector. The Instituterelies on the annual Advisory Council meetings for advice in these areas, and with respect tothe Institute’s new and ongoing initiatives, products and services. The advice from Advisory Councilmembers supports and assists the Institute in its efforts to develop, establish and improve professionalpractice standards for the appraisal profession. The Advisory Council meets once each yearin the form of a round-table discussion on topics of mutual interest. So far this year, the AdvisoryCouncil met in Toronto on January 25, 2010 with representation from the private sector as follows:Altus GroupLAWPROREALpacMunicipal Property Assessment CorporationNationwide Appraisal ServicesCentractFNF CanadaGenworth Financial CanadaRoyal Bank of CanadaSolidifi Inc.The Advisory Council public sectormeeting is scheduled for the fall.CRITICAL DATESFebruary 26, 2010 – Online registrationavailable for AIC Annual Conference in VictoriaApril 16, 2010 – Deadline for articlesubmission for next issue of CanadianProperty Valuation magazineJune 2-5, 2010 – AIC Annual Conference,Victoria, BCFriday, June 4, 2010 – AIC AGMVictoria, BC, 3:15 pmMid-August, 2010 – Dues eInvoicesemailed to members by AICMid-November, 2010 – InsuranceeInvoices emailed to members by MMR(Martin, Merry & Reid)click here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 37

NewsON THE MOVEOlscamp promoted in PEIPaul J. Olscamp, AACI, P. App (Fellow) has recently been promoted and isnow responsible for the management of the Real Property Assessmentfunction for the Province of Prince Edward Island, which provides a centralizedassessment and collection system for real property taxation. Paulcomes to this position with 28 years of experience specializing in propertyassessment and administration.Turmel receives awardIn November 2009, AIC member Marie-Josée Turmel, AACI, P. App ofMontreal received CREW’s Women of Action Award for demonstrationof continued support of the organization and ongoing facilitation of theadvancement of women in commercial real estate.CREW Montreal is the Quebec chapter of CREW Network (CommercialReal Estate Women), a North American commercial real estate organizationconnecting 8,000 members across 68 major markets. United by the goal to advance the success ofwomen in commercial real estate, CREW Network continues to grow in Canada. There are Canadianchapters in Vancouver, Toronto and Montreal.AIC memberscarry the torchAppraisal Institute of Canada (AIC) membersStephanie Anglehart, AACI, P. App (right) fromCampbellton, New Brunswick and Brent Williams,CRA (left) from Meaford, Ontario were proud to jointhe ranks of Canadians chosen as torchbearers of theOlympic flame in its cross-Canada odyssey.Stephanie says that “it was thrilling when Ireceived my invitation email from among thousandsand thousands of applicants to participatein this Olympic Torch Relay.” On the day of theevent “nothing will ever compare to the feeling Igot…. the cheers from the crowd; children whowere waiting patiently for this moment. I felt likea rock star!!!”Brent was also stirred by the experience andsays “it was an awe inspiring event that fostered ourpride in Canada and in the goals and dreams we allcarry. It was a moment that I will not soon forget!”38Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

Possiblevaluationissues withLifeleasehousingBy Jane Londerville, AACI (Hon), Associate Professor and Interim Chair,Marketing and Consumer Studies Department, University of Guelphife lease housing is a relativelynew form of tenure in Canada, but a rapidlygrowing one in Ontario and the westernprovinces. It is widely used by the non-profitsector to increase the range of housing optionsfor the 55+ market. A life lease is a legalagreement that permits the purchaser to occupya residence for life (or until they no longer wantto or are capable of living there) in exchangefor an initial lump sum payment. They are alsoresponsible for monthly payments to cover theongoing operating expenses (similar to a condofee) and, in some cases, rent, depending on thesize of the initial payment.Life lease is a hybrid type of tenure. In someaspects, life lease holders appear to be owners.They are responsible for repairs to their ownunits, providing their own appliances and payingthe property taxes associated with their unit. Themonthly maintenance fee they pay is used tofund operating costs for the common areas andto put aside a reserve fund for capital replacements.In other ways, life lease residents are likerenters. The operating budget is set by the ownerof the building and may be presented to theresidents, but they have little input into how thebuilding is managed. Most complexes in Ontarioare set up as condomnium corporations, but theBoard of Directors is chosen by the developer andfrequently does not have any residents on it. Theowner of the building itself is still the developer,since the residents have only purchased the rightto occupy a unit, not title to the unit itself.Residents of life lease developments areactive and healthy seniors; these are notcomplexes for seniors who need help withdaily living. There are not extensive servicesoffered in most complexes (no meals or healthprofessionals on staff usually). If residentseventually need some additional personal careto function in their unit, they need to hire thisassistance privately.click here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 39

“Given theprojected growthin the seniorpopulation overthe next 20 yearsand the generalgood health ofseniors in Canadatoday, the demandfor this type ofdevelopment islikely to continue.”In design, most life lease units are similarto condominiums in the same locale. They areself-contained units with one or two bedrooms.The buildings have amentities comparable tonearby condo buildings. A study done for theOntario Ministry of Municipal Affairs and Housing(Simmons, 1999) found prices of life lease unitsin London and Toronto to be similar to those forcomparable condo units.Currently, all life lease housing developmentsin Canada are located west of the Ontario-Quebec border. The exact number of life leaseprojects in Canada is unknown; the number wasestimated at more than 200 in 2003 (LuminaServices Inc., 2003) and approximately 300 inearly 2007 in a CMHC study of life lease issues(GGA Management Consultants, 2007). As of2005, the Ontario government estimated thatthere were 125 projects (8200 units) in Ontarioalone. These numbers are estimates, since thereis no requirement for life lease developments tobe registered, but it indicates an increase of atleast 40% in the number of developments overa three year period. Given the projected growthin the senior population over the next 20 yearsand the general good health of seniors in Canadatoday, the demand for this type of developmentis likely to continue.Manitoba is the only province to have enactedlegislation specific to life lease housing: the LifeLeases Act, December 1999, amended June 2005.This legislation specifically designates that lifelease residents are renters and are subject to theprotections and regulations of other renters inthe province. Some regulatory mechanisms applyin other provinces within existing legislationnot specifically developed for life lease housing.Other than in Manitoba, this leaves residents withsome vulnerability to various issues discussed inmore detail in the online version of this article.One of the reasons for the rapid growth inthis form of tenure is the advantage to the developerin financing the development. Life leaseinterests are presold to prospective residents whosubmit a deposit. These funds can be used asequity in the development to secure constructionfinancing (some restrictions apply in Manitoba).Once the units are complete and occupied, residentscomplete the purchase and the additionalfunds are used to pay off the construction loan.The use of this form of tenure then leaves thedeveloper, usually a non-profit group, with nofinancing on the property.There are various forms of life lease arrangementsin place across the country. This articleconcentrates on the primary form of life leaseused in Ontario as the basis for the discussion(see online version of this article for informationon other forms of life lease arrangements). Lifelease purchasers in Ontario pay ‘market value’for their life lease interest. When they move outof the unit, they sell the life lease interest to anew purchaser for whatever market value is atthat time. The sponsor of the development oftencharges an administrative fee of 3-10% for thetransaction and may maintain a waiting list ofinterested purchasers.The life lease holder is greatly concernedwith ensuring the building is well managed, thatthere is continuing demand and a waiting list forunits, and that, ideally, the market value of thelife lease interest increases over time (or at leastdoes not diminish). In most complexes, however,the sponsor is the only entity that has any realcontrol over how the building is managed.40Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

Life lease holders have the right to occupytheir unit and may have his life lease interestregistered on title. However, a study done forCMHC found that, although some residents hadbeen advised by their lawyer to register theirinterest, most had not done so because of thetime and expense involved (GGA ManagementConsultants 2007).The sponsor has the right to review the purchaserto ensure they fit the criteria for the building.There is always an age restriction (55+ or65+), but some residences also cater to a specificethnic or religious group. While it is not legal todiscriminate on this basis, prospective purchasersare discouraged from buying on the basis thatthey would not feel comfortable in the building.This type of targeting of the building reduces thepool of potential purchasers for each unit. It maylengthen the time on the market and could affectthe price achievable relative to a comparablecondo unit with no market restrictions.The absence of legislation specific to lifeleases which would protect and clarify bothconsumer and sponsor rights can lead tovalue implications for the resident. There is nolegislated requirement in Ontario for life leasedevelopments to maintain a capital reserve,for example. Part of the due diligence a condopurchaser undertakes is to examine the healthof the reserves by looking at the most recentreserve fund study. This information is onlyavailable to the purchaser of a life lease unit ifthe owner has done a study and is willing torelease the information. As well, life lease unitsare not protected under the Tarion New HomeWarranty program because they are consideredmulti-family properties. This reduces the value ofthe unit relative to a new condominium unit withwarranty coverage. It also means the purchaser’sdeposit is not protected.To date, there have been few issues with lifelease developments. However, given their hybridtenure nature and the lack of legislation coveringthis form of housing, the possibility of a negativevalue impact for a life lease owner is there. Thatsaid, the 2007 CMHC study by GGA ManagementConsultants found a very high level of satisfactionwith life lease housing and the feeling of communityin these developments. It is likely to be aform of tenure that continues to grow.ReferencesGGA Management Consultants, 2007, An Examinationof Life Lease Housing Issues. CMHC.Lumina Services Inc. 2003 Life Lease Housing inCanada: preliminary exploration of some consumerissues, CMHC External Research Program.Manitoba Life leases Act, http://web2.gov.mb.ca/laws/statutes/ccsm/l130e.phpSimmons, L. J., 1999 Life Lease Value Analysisand Review, Prepared for Housing Policy Branch,Ontario Ministry of Municipal Affairs and HousingNOTE:This is the condensed version of the article. Toread the article in its entirety, please visithttp://www.aicanada.ca/cmsPage.aspx?id=168Interactive edition ofCanadian Property VALUATIONWith print and electronic communication operating hand-in-handmore than ever before, we are more than happy to advise you thatCanadian Property Valuation magazine is available online in a highlyinteractive format.A user-friendly, interactive Media Rich PDF format that includes:Active hyper-links to all websites ande-mails contained in the publicationActive links to the specific stories fromthe front cover and contents pageActive links to advertiser websites from their adsPlease check out the interactive Canadian Property Valuation at www.aicanada.caclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 41

Strategic asset management (real property)By Gordon E. MacNair, AACI, P. App, Director, Real Estate Partnerships & Development Office, City of OttawaOverviewThe purpose of this article is to review the complexities associatedwith real property asset management. The process begins withunderstanding the need and the owner’s objectives, planning, movingthrough the acquisition phase, the operation and maintenance phase,the refurbishment and enhancement phase, and, finally, the dispositionof the asset. The article also explores the importance of having strategicprofessional staff oversee asset management on behalf of the ownership.Asset management can be defined as the process of creating valuewithin the owner’s objectives through the acquisition, use and disposalof real property assets. Alternatively, asset management is defined as thepractice of maximizing the value of a portfolio of properties, within theobjectives of the owner 1 .While a real estate appraiser’s job is to place a value on the futurebenefits of a particular property, an asset manager has to realize thosebenefits. However, this article will demonstrate how the real estate appraiserassists the asset manager throughout the asset management cycle.The Phases of the Real Property Asset Life CycleDISPOSEREFURBISH ORENHANCEDEFINE THE NEEDFOR THE ASSETplancreate oracquireOPERATE ORMAINTAINThe process for asset management involves identifying the need andowner’s objectives for the requirement followed by five phases: planning,acquisition, operating and maintenance, refurbishment or enhancement,and, finally, disposal. This is illustrated in Figure 1 – The Phases of theReal Property Asset Life Cycle 2 .As outlined in the text, Corporate Property Management: AligningReal Estate with Business Strategy 3 by Victoria Edwards and Louise Ellison,property is a ‘corporate asset’ and is held for one of two purposes:• as an investment asset, or• as an operational asset.Property held as an investment asset, like any other investment asset,is expected to earn a rate of return on capital employed for the holderand, particularly in the case of freehold, appreciate in capital value.Property held as an operational asset serves to support the activities ofthe business occupying the property. This type of property is sometimesreferred to as ‘corporate property.’It is the author’s opinion that there is a difference between private andpublic sector real estate objectives. From a private perspective, the primarydriver is financial, since, typically, there must be an acceptable return onthe investment and capital appreciation (it is recognized that, with currentmarket demand, environmental sustainability needs to be analyzed inorder to address greening initiatives such as LEED, BOMA BESt, etc.). Withthe public sector, the objectives are broader and consist of the four pillars(financial, social, cultural, and environmental). As a result, it is a matter ofbalancing the various pillars to accomplish organizational objectives forthe public sector asset manager. An example would be a large tract of landowned by the municipality, that has subdivision potential, but over half ofthe parcel is a woodlot, which has natural environmental features. In thisinstance, it is possible that the municipality would probably retain all ormost of the woodlot to satisfy its environmental objectives. Clearly, thefinancial return would be greater by permitting housing development, butthis would not allow the municipality to satisfy its environmental objectives.Need for asset and ownership objectivesIt is important to thoroughly understand the need, as this is incorporatedwithin the owner’s objectives as demonstrated in Figure 1. The ownershipobjectives will vary widely among individual, corporate, fiduciary andgovernment owners. In addition to the identification of specific assetsthat may align with any defined user need, it is also relevant to considerthe application of an effective methodology, which will rationalize theacquisition of any asset and will ensure an appropriate and sustainableend-state property solution.42Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

By definition, asset rationalization reduces the risk of improperacquisition.Some owners see real estate as an investment, while others use realproperty for their own benefit and are interested in preserving the valueof their investment. Most institutional and corporate investors have welldefined, written goals in the form of policy statements or investmentguidelines that are readily obtainable from their website. An example isBrookfield Properties 4 which “is committed to building shareholder value byinvesting in premier quality office assets and pro-actively managing each ofour properties to increase cash flows and maximize return on capital.” Froma public perspective, the City of Ottawa is strategically driven to optimizethe value of city-owned property holdings based on balancing the City’sfinancial, social, cultural, and environmental objectives for these holdings.PlanningAs John McMahan states in his book The Handbook of Commercial RealEstate Investing 5 , the role of the asset manager has evolved over thelast 50 years, as real estate has gone from individual to institutionalownership and from the management of a few properties in a singlemarket to large portfolios located in often dispersed geographical areas.The modern real estate asset manager is a multi-disciplined, highlytrainedreal estate professional who is expected to not only be responsiblefor managing investment assets during the investment holding period,but be an integral part of both the acquisition and disposition process.Below is a list of potential objectives for the asset manager as itapplies to strategic asset management:• support of corporate objectives, e.g., the four pillars approach (financial,social, cultural and environmental) through redevelopment or otherinitiatives;• implementation of asset management strategies for all owned andleased facilities;• provision of strategic portfolio planning and expert real estate advice toits ownership to ensure that their real estate needs are met in the mostefficient and effective manner;• generation of development strategies with intent to maximize the valueof corporate real property holdings;• development of effective property solution options for ownership thatsupport a balanced and affordable solution;• determination of the suitability and affordability of the portfolio tomeet the needs of all client groups;• development of value-added real estate solutions for core andnon-core assets;• development of facility and portfolio plans which recommend thedisposition, remediation, redevelopment, retirement and/or retentionof, and reinvestment in, those properties which are demonstrablysustainable, affordable and appropriately utilized; and• analysis, rationalization, demonstration and communication of theaccurate whole-life cost implications of real property solutions orpolicies that are introduced in response to the needs of clients.AcquisitionThe decision to purchase/lease real estate is found within the owner’sobjectives. Some potential scenarios include:• purchase of an existing property;• purchase of a vacant site for development;• redevelopment of an existing property; or• lease.With any acquisition, the buyer and seller ultimately enter into a Purchaseand Sale Agreement (P & S Agreement). However, in some instances, aLetter of Intent may be prepared prior to this stage to outline the potentialbusiness terms. The P & S Agreement serves as a legal contract betweenthe two parties and forms the basis for how the purchaser will obtaincontrol of a property.With the purchase of real property, proper due diligence must becarried out. Due diligence is the process of investigating and verifyinginformation as it pertains to the subject property. Typically, this processstarts before an offer is made. However, once an offer is made, it typicallyincludes clauses that allow completion of further due diligence suchas: title search, environmental investigation, building condition audit,designated substance profiling, engineering and structural reviews, etc.The amount of time that a purchaser needs to satisfy due diligencerequirements is a critical part of the negotiation process. Clearly, thetransaction cannot close until the due diligence process has beencompleted.Due diligence for a vacant parcel of land might include confirmationof zoning, official plan designation, satisfactory financing, obtaining anappraisal, title search, assessment of environmental issues, review ofsurvey plan, consultation with the local municipality, determination ofgeotechnical condition of soil, private/municipal services, accessibility,review of future development in the area, development charges, off-siteobligations, archaeological issues, wetland concerns, etc.Similarly, the due diligence process for an improved property mightinclude the above as well as a building condition audit; and review of:life cycle costs, historical operating costs, environmental issues withinclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 43

the building (mould or asbestos), copies of all leases (if an incomeproducing property), any outstanding work orders, barrier free issues,code compliance, estoppel certificates for tenants, confirmation ofchattels vs. fixtures, special local improvement charges, property taxes,confirmation of building permits, etc.Whole-life costingWhole-life costing 6 is a key component in the economic appraisalassociated with evaluating asset acquisition proposals. An economicappraisal is generally a broader based assessment, considering benefitsand indirect or intangible costs as well as direct costs.In this way, the whole-life costs and benefits of each option areconsidered and usually converted using discount rates into present-valuecosts and benefits. This results in a benefit-cost ratio for each option,usually compared to the ‘do-nothing’ counterfactual. Typically, thehighest benefit-cost ratio option is chosen as the preferred option.As part of this analysis, the cost of capital relative to businessopportunity costs is an important consideration for the private sector,and could result in choosing another option such as leasing. Withrespect to the public sector, this would be balanced with the four pillarsapproach and it is also recognized that the cost of capital is less than theprivate sector.The whole-life costing model includes for the periodic lifecycle(capital) replacement of major components and systems, which, in turn,establish the cradle to grave requirement for measuring and managinga physical asset’s useful life. A whole-life costing model can assist indetermining the true value of any leveraging opportunity and to ensurethe proper balance of risk and opportunity in structuring any leveragingarrangement.Simply put, whole-life costing is analyzing the ‘true cost ofownership.’ This is demonstrated with Figure 2 – Developing Whole-Life Cost Profiles for Facilities:Operation/maintenanceAt this stage property management professionals who are responsiblefor overseeing the day-to-day operations typically maintain theproperty. Examples include: custodial services, maintenance and dealingwith tenants.At a more strategic level, the ownership will require a business planfor each property, which requires an ongoing review of the real propertyinventory; it also requires financial reporting to the ownership on aregular basis.As part of any effective asset management plan, an accurateinventory is required to describe all real property assets. The inventorydatabase should be updated on a continuous basis. In addition, aninventory review should include a review of all leases or lease abstracts,rents, operating costs, lease rollovers, tenant relocation, additional rightssuch as a First Right of Refusal or Right to Purchase, etc.Useful Life of the FacilityDeveloping Whole-Life Cost Profiles for FacilitiesDEFINE THE NEEDFOR THE ASSETFACILITY DESIGNAND CONSTRUCTIONCOSTSFINANCING COSTS(IF APPLICABLE)OPERATING COSTSPLUS ANNUALESCALATIONLIFE CYCLE ANDPLANNED CAPITALRENEWAL COSTS PLUSANNUAL ESCALATIONPLANNEDIMPROVEMENT COSTS(discretionary)DEMOLITION ANDSITE CLEANUP COSTS(discretionary)This includes the cost for any purchasedland parcel(s), plus any built improvementswhich might be required. Costs for anypre-existing demolition should also bereflected here.This is the full cost for design developmentand actual construction of the requisitefacility.This item includes the full cost of financingthe acquisition, design and constructionphases of the project over the full termthat financing is applicable.These are identified annual operatingcosts, plus a reasonable escalation factorover the entire useful life of the facility.This is the requisite program of plannedlife cycle capital renewal for the builtfacility type. Typically applies for theentire useful life of the facility andincludes an annual escalation factor.These cost are discretionary andrepresent any planned improvements tothe facility typically completed on aone time basis at some point in its totallife cycle.One time demolition and site cleanup costsoccurring at the end of the facility life andprior to sale or disposition. May not applyif facility and land are sold as-is, where-is.44Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

In some instances, real property assets can be categorized in thefollowing classes:1. Core properties are primarily used to accomplish the operationalpurposes or service-delivery objectives, which could includeimproved properties and/or vacant land, and2. Non-core assets, which are functionally obsolete, near or at theend of their economic life, and could be considered as surplusor underutilized. Non-core assets are those properties that areconsidered to be excess to the corporate mission.Benchmarking and performance measurementAs part of any effective asset management plan, balancedperformance measures must be in place to ensure that you are beingcompetitive within the marketplace. Benchmarking is a form ofmeasurement based on a continuous improvement process that can becompared and measured. This could result in outsourcing/insourcing ofvarious functions such as janitorial services, property management, etc.Refurbishment or enhancementThis stage includes a review of the owner’s objectives relative to thecurrent market conditions and, completion of a cost-benefit analysisby the asset manager. Once completed, one or more of the followinganalytical tools can be used:- Net present value (NPV)- Internal rate of return (IRR)- Return on investment (ROI)The above analysis may result in several scenarios such as:• status quo,• initiation of a change of use due to a highest and best useanalysis,• modernization/renovation of the property, and• disposition.For additional information on strategic asset planning, reference theobjectives of an asset manager as outlined under the Planning phase.DisposalFactors that may contribute to an owner’s decision to sell include:- seller’s market,- improvements are at the end of their economic life,- major life-cycle work,- change in ownership strategy such as a lease to offer moreflexibility, and- need for cash or liquidity.Similar to the acquisition phase, the ownership would typicallycomplete its own due diligence analysis before the disposal. Someitems that may be considered at this time are:- commissioning an appraisal,- confirmation of market conditions and business cycle,- review of leases including rents and operating costs,- obtainment of estoppel certificates,- title search to ensure that there are no surprises,- requirement for life-cycle work, and- completing a Phase I Environmental Site Assessment.The ownership must also determine whether or not they are preparedto sell the property ‘as is, where is’ or, alternatively, what warrantiesand representations they are prepared to accept. There could also beconsideration as to whether or not there are any outstanding workorders or restrictions on title such as easements and covenants thatwould need to be addressed.With respect to a marketing strategy, the type of property, marketcycle, method of sale and geographic location are all examples offactors that require consideration. For commercial properties, potentialpurchasers will be interested in the tenant mix, quality of tenant andcontract rents, which are all components of the ‘quantity’ and ‘quality’of income.There are a number of options that an owner can choose fordisposal such as listing with a real estate broker, direct sale, auctionand tender.ConclusionThe primary focus of asset management is the creation of value toachieve owner objectives. In the real estate ownership cycle, thisprocess begins with understanding the owner’s objectives, planning,and moving through the acquisition phase; it continues throughthe operation and maintenance phase, and the refurbishment andenhancement phase; and, finally, ends with the disposition of the asset.Due to the complexities of asset management, it is also important tohave strategic professional staff overseeing this mandate on behalf ofthe ownership.For additional information on asset management, the BOMIInstitute offers a four-day course and the IRWA offers aone-day course.References1Asset Management, BOMI Institute, Defining Real Estate AssetManagement, pg. 1-22Queensland Government Government of Works www.build.qld.gov.au/downloads/bpu/sam_overview.pdf3Corporate Property Management: Aligning Real Estate with BusinessStrategy, by Victoria Edwards and Louise Ellison, pg. 44Brookfield Properties http://investors.brookfieldproperties.com/phoenix.zhtml?c=91790&p=irol-irhome5The Handbook of Commercial Real Estate Investing, John McMahan,McGraw-Hill, 2006, pg. 1646Wikipedia http://en.wikipedia.org/wiki/Whole-life_costclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 45

Calendar of EventsAICBCAB2010 Appraisal Institute of CanadaAnnual ConferenceJune 2-5, 2010 – Fairmont Empress HotelVictoria, British Columbia2010 Annual General MeetingAppraisal Institute of CanadaFriday, June 4, 2010 - 3:15 pm – The Fairmont Empress HotelVictoria, British ColumbiaFor information contact: info@aicanada.ca or www.aicanada.caor 1-888-551-5521Professional Practice SeminarsApril 16 and 17, 2010 – VancouverAllan Beatty, AACI, P.AppSeptember 24 and 25, 2010 – Kamloops/OkanaganAllan Beatty, AACI, P.AppNovember 19 and 20 2010 – Lower MainlandLarry Dybvig, AACI, P.AppFor information contact: Anne Dunning at info@appraisal.bc.ca or(604) 266-8287 or check www.appraisal.bc.ca/Spring 2010 Conference & AGMMarch 5 and 6, 2010 – Blackfoot Inn, CalgarySpring 2010 Continuing Education Events – TBASpring 2010 Professional Practice (Standards) – TBAFor information contact: AIC - AB at info@appraisal.ab.ca or(403) 207-7892 or check www.appraisal.ab.caONQCNBNSPEINLAnnual General MeetingPeterborough April 24, 2010For information contact: Lorraine Rigas at lrigas@oaaic.on.ca or(416) 695-9333 or check www.oaaic.on.caAnnual General MeetingMontreal May 4, 2010For information contact: Ginette St-Jean at aqice@qc.aira.com or(450) 454-0377 or check www.aqice.caAnnual General MeetingFredericton April 22, 2010For information contact: Jennifer Nemeth at nbarea@nb.aibn.comor (506) 450-2016 or check www.nbarea.org/main.aspNSREAA Annual General MeetingHalifax March 6, 2010For information contact: Davida Mackay at nsreaa@nsappraisal.ns.ca or (902) 422-4077 or check www.nsappraisal.ns.ca/Annual General MeetingCharlottetown April 21, 2010For information contact: Suzanne Pater at peiaic@xplornet.com or(902) 368-3355Annual General MeetingSt. John’s April 23, 2010For information contact: Sherry House at naaic@nf.aibn.com or(709) 753-7644SKAnnual General MeetingRegina April 9, 2010For information contact: Marilyn Steranka at skaic@sasktel.net or(306) 352-4195 or check www.skaic.org/MBProfessional Practice SeminarPresenter: Allan Beatty, AACI, P. AppMarch 19 and 20, 2010 – 8:30 am-4:00 pmFor information contact: Kelly Tole at mbaic@mts.net or(204) 943-1177 or check www.aimanitoba.caVisit us at:www.aicanada.caAdvertiser Information Centre*If you are viewing an electronic version of this issue on the AIC web site, please click on these listings for active links to the advertisers’ web sites.Company Page Website Phone NumberACI 2,3,48 www.appraiserschoice.com 800-234-8727Altus Group Ltd. 47 www.thealtusgroup.com 416-204-1100Appraisal Institute 31 www.appraisalinstitute.org 888-7JOINAIAtlantic Realty Advisors 25 www.ara.caBusiness Information Group 12 www.ecologeris.com 887-512-5204Canadian Resource Valuation Group 38 www.crvg.com 780-424-8856Notarius 16 www.notarius.com 800-567-6703Solidifi 5 www.solidifi.com 866-583-398346Canadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canadaclick here to return to table of contents

ACI365CompleteAppraisalOfficeManagementSolution$365Payablein US DollarsOneyearofACI365Worksite&WebsiteGet Online • Go Paperless • Get Paid FasterIncludesCRAL2010IntegrationACI365.com 800-234-8727ACI is a division of Verisk Analytics (NASDAQ: VRSK), a leading provider of risk assessment solutions to professionals in insurance, healthcare, mortgagelending, government, risk management, and human resources. Verisk Analytics includes the holdings of Insurance Services Office, Inc. (ISO) and itssubsidiaries, which provide essential solutions to the insurance, mortgage lending, and healthcare markets. For more information, visit www.verisk.com.