Book 4 - Appraisal Institute of Canada

V o l u m e 5 1 , B o o k 4 , 2 0 0 7Can appraisersadapt toclimatechange?Publication Mails Agreement #40008249.Return undeliverable Canadian addresses to:Appraisal Institute of Canada403-200 Catherine Street, Ottawa, ON K2P 2K9Email: info@aicanada.ca

Volume 51, Book/Livre 4, 2007Published by theAppraisal Institute of CanadaInstitut canadien des évaluateursCT A B L E O Fontents6 President ’s Message/Message du présidentCEO Report/Rapport Du Chef De La Direction101416182224333436374646Collaboration is the key to evolution/La collaboration est la clé de l’évolutionAIC Candidates are the future of the professionLes membres stagiaires de l’ICE – L’avenir de la profession en dépendAIC Conference 2008Valuation – Just the Tip of the Iceberg!First Professional Liability Insurance CompanyFPLICL – two years laterMember ProfileThe new AIC professionalVolunteer RecognitionCommitment and dedication…the keys to our successAICp r o g r a minitiatives24 Communications26 Standards28 Investigating30 Professional Qualifications and Competency31 Professional Affairs32 From The Counsellor’s DeskCritical Dates/In Memoriam/Member Disciplined/Jack Warren ScholarshipPGCV GraduatesDesignations Granted/Candidates/StudentseatureFa r t i c l e s37 Advice to Authors38 Being Prepared for Unexpected(and Potentially Devastating) Life Changes41 Can Appraisers Adapt To Climate Change?Advertiser Information CentreOur cover:The new Irving Greenberg Theatre Centre in Ottawa is home to the Great Canadian Theatre Company. A definite ‘green’building (see article on page 41), the two floors of windows have special etchings to trap heat in the winter and repelthe sun’s rays in the summer. Complete with a composting system and a cistern that drains rainwater from the roof foruse in its bathrooms, the building is expected to use 45% less water and electricity than other structures of its size.403-200 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 – PrésidentGordon J. Tomiuk, AACI, P.App, ManitobaPresident Elect – Président désignéGeorge Maurice, AACI, P.App, OntarioImmediate Past-president –Président sortantPaul Olscamp, AACI, P.App, Prince Edward IslandVice-Presidents – Vice-présidentsGerry McCoombs, AACI, P.App, New BrunswickSheila Young, AACI, P.App, AlbertaDirectors – DirecteursRobert Tipple, AACI, P.App, Newfoundland & LabradorBeverley Girvan, AACI, P.App, Nova ScotiaCraig Soderquist, AACI, P.App, AlbertaRobert Robson, AACI, P.App, OntarioGrant Uba, AACI, P.App, OntarioJohn Yannacopoulos, AACI, P.App, British ColumbiaGeorge Ward, AACI, P.App, British ColumbiaMichel Colgan, AACI, P.App, QuebecKimberly Maber, AACI, P.App, SaskatchewanChief 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. AppDarrell Thorvaldson, AACI, P. AppAndré Beaudoin, CRADavid Lopatka, AACI, P. AppJoanne Hayes, CandidateJane Londerville, B.Sc., M.B.A.,Associate Professor, University of GuelphThe articles printed in this issue represent authors’opinions only and are not necessarily endorsed by theAppraisal Institute of Canada. Copyright 2007 bythe Appraisal Institute of Canada. All rights reserved.Reproduction in whole or in part without written permissionis strictly prohibited. Subscription, $40.00 per year.Printed in Canada. Les articles imprimés dans ce numérone repésentent que l’opinion de leur auteur respectif, maisne sont pas néces–sairement endossés par l’InstitutCanadien des Évaluateurs. Tous droits reservés2007 par l’Institut Canadien des Évaluateurs. Lareproduction totale ou partielle sous quelque form quese soit sans authorisation écrite est absolument interdite.Abonnement $40.00 par année. Imprimé au Canada.Indexed in the Canadian Business Index and available onlinein the Canadian Business & 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: 866-985-9780Fax: 866-985-9799E-mail: info@kelman.caWeb: www.kelman.caDesign/Layout: Tracy ToutantAdvertising Manager: Cindy Robin

Mp r e s i d e n t ’ sessageCollaboration isthe key to evolutionGordon J. Tomiuk, AACI, P. AppAIC Presidenthen I began my term asPresident six monthsago, I took time to reflectupon the AppraisalInstitute of Canada’s long list of recentachievements, as well as the manyinitiatives then underway. At that time,as now, it is heartening to realize thatall of the changes we have undergoneand continue to experience have beenpossible thanks to the concertedefforts of national and provincialvolunteers, staff, and the support of ourmembership.As you may recall, these changes,including new policies and programsthat have been rolled out over the years,were necessary to meet the needs of themarketplace, increase the professionalismof our members, raise the profileof the profession and better protect thepublic. Our objectives and the methodsfor achieving them were identified in AIC’sstrategic plans developed in consultationwith our members.The successes we have enjoyed havebeen the result of the collaboration thathas taken place at the chapter, provincialassociation and national levels. In thisrespect, it has been the members volunteeringon the board, committees, andworking groups, with the support of staffacross Canada, who have made it all possibleand for which we should all be trulyappreciative.Our record of success is proof thatteamwork pays off. Instead of ‘us versusthem,’ this organization has embracedIt has been the members volunteering on the board,committees, and working groups, with the support ofstaff across Canada, who have made it all possible.collaboration and cooperation and wehave the positive results to prove it. Thecooperation that we have seen is basedon two things in particular: mutual trustand delegation of responsibility.As a professional, non-profit organizationcomprising 11 associations, roles andresponsibilities must be clearly spelledout. Volunteers and staff have differentfunctions to carry out and they must worktogether fully respecting each other andtheir respective roles.The Board of Directors is directlyaccountable to the membership at boththe provincial and national levels and it isresponsible for managing the organizationin accordance with the bylaws approvedby the membership. The Board’s rolemandate is all encompassing, but its mainfunction is to provide policy direction andleadership at the top level, ensuring thatthe organization achieves its stated goalsfor the benefit of its members.Because it has a great many responsibilities,the Board of the Institute delegatesspecific functions to its committees,including its standing and ad hoccommittees. The Executive Committeeis established in the bylaws to handlethe day to day administration of theInstitute and deal with implementationissues. Educational policy matters aredealt with through the Learning AdvisoryCommittee, while professional affairsare handled by the Professional Qualificationsand Competency Committee.Professional Practice matters fall underthe auspices of the Investigating, Adjudi-C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

Members have many ways that they can express their viewsand provide input to the policy-setting process.cating and Appeal Committees. Theother standing committees such asStandards, Insurance Advisory andCommunications continue to focuson their respective mandates inserving the membership.Staff support the Board and itscommittees and implement the policiesthat the committees establish.In so doing, they may develop processesand procedures to deal withthe day to day running of programsand activities. AIC staff are professionalswho exercise discretion ininterpreting policies and carrying outthe wishes of the Board and its committees.The Board tries to makethe best decisions possible,after reviewing all the facts andbackground material to arriveat decisions that benefit theentire membership. With such adiverse membership, it is oftendifficult to please everyone.However, the Board is sensitiveto member input and, throughits directors, solicits andreports back the views andperspectives of the membership,whether they are supportiveof Board decisions oropposed. As long as theseviews are constructive, wellintentioned and thoughtful,they are appreciated andtaken into considerationwhen Board decisions arereached.Members have manyways that they can expresstheir views and provideinput to the policy-settingprocess. The best way isthrough their chapters andprovincial associations, which, inturn, can express regional perspectivesin the form of recommendationsto the national Board throughtheir directors. Another way isthrough the member surveys thatthe Institute conducts on a varietyof issues. Make sure you take thetime to respond to the survey questionnaires,because a high responserate is necessary in order to get anaccurate picture of members’ views.Members may also provide feedbackthrough the dedicated emailaddresses that AIC establishes todeal with specific topics. There arealso online forums that allow membersto interact and voice thoughtsand opinions. The important thing toremember is that all of us are on thesame team. All wish to make thisa better organization and a betterprofession.As we go forward, we should keepin mind that our goals are alignedand aimed at what is best for theentire membership and our organization.The synergy we can createby working together for commongoals can propel us to new heightsof accomplishment. Let’s all pull thesled in the same direction and getto where we need to be much fasterand with more tangible results.C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

essageMdu présidentLa collaboration estla clé de l’évolutionGordon J. Tomiuk, AACI, P. AppPrésident de l’ICEorsque j’ai entrepris mon mandatde président il y a six mois,j’ai pris le temps de pondérerla longue liste de réalisationsrécentes de l’Institut et des initiativesen cours. À l’époque, tout comme maintenantd’ailleurs, il est réconfortant deconstater que tous ces changements,comme ceux à venir, ont été rendus possiblesgrâce aux efforts concertés desbénévoles des paliers national et provincial,du personnel et au soutien de nosmembres.Comme vous vous en souviendrezpeut-être, ces changements, y comprisles nouvelles politiques et les nouveauxprogrammes qui ont été mis en oeuvreau fil des ans étaient nécessaires enréponse aux besoins du marché, pouraccroître le professionnalisme de nosmembres, améliorer l’image de la professionet mieux protéger le public. Nosobjectifs et les méthodes utilisées pourles atteindre ont été identifiés dans lesplans stratégiques de l’ICE qui ont étémis au point en consultation avec lesmembres.Les succès que nous avons connussont le résultat de la collaboration entreles chapitres, les associations provincialeset le palier national. Dans cetteveine d’idées, ce sont les membres quiont participé volontairement au Conseil,aux comités et aux groupes de travail etl’appui de tout le personnel à l’échelledu pays qui ont fait que tout cela a étépossible. Nous avons tous raison d’êtrevraiment reconnaissants à leur endroit.Notre fiche de succès est la preuveque le travail d’équipe porte fruits. Plutôtque de travailler dans une atmosphèred’opposition, notre organisme a adopté lacollaboration et nous avons les résultatspositifs pour le prouver. La collaborationque nous avons connue prend appui surdeux points particuliers : la confiancemutuelle et la délégation des responsabilités.Comme organisme à but non lucratifcomptant onze associations, les rôles etles responsabilités doivent être clairementdéfinis. Les bénévoles et le personneldoivent s’acquitter de fonctions biendifférentes et travailler ensemble tout enrespectant leurs rôles respectifs.Le Conseil d’administration est directementresponsable à l’endroit des membresaux paliers provincial et national etdoit gérer l’organisme conformément auxrèglements approuvés par les membres.Le mandat du Conseil est universel etprédominant mais ses fonctions principalesconsistent à assurer une orientationde politique et un leadership aux palierssupérieurs de sorte que l’organismepuisse réaliser ses objectifs à l’avantagedes membres.Parce qu’il a de nombreuses responsabilités,le Conseil de l’Institut doitdéléguer des fonctions spécifiques àses comités permanents et ad hoc.Le Comité exécutif est nommé dansCe sont les membres qui ont participé volontairementau Conseil, aux comités et aux groupes de travailet l’appui de tout le personnel à l’échelle du paysqui ont fait que tout cela a été possible.C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

Les membres disposent de plusieurs façons pour manifesterleurs opinions et contribuer au processus d’élaboration des politiques.les règlements comme responsablede l’administration quotidiennede l’Institut et des questionsd’application. Les questions relativesà l’éducation relèvent du Comitéconsultatif sur l’apprentissage alorsque les affaires professionnelles sontconfiées au Comité sur les qualificationset la compétence professionnelles.Par ailleurs, la pratiqueprofessionnelle relève des Comitésd’enquête, d’adjudication et d’appel.Les autres comités permanentscomme le Comité sur les normes,le Comité consultatif sur l’assuranceet le Comité des communicationsdoivent s’acquitter de leur mandatrespectif à servir les membres.Le soutien au Conseil est assurépar le personnel et ses comitésvoient à la mise en oeuvre des politiquesqu’ils établissent. Ce faisant,ils peuvent élaborer des processuset des procédures en rapportau fonctionnement quotidien desprogrammes et des activités.Le personnel de l’ICE consisteen des professionnels qui fontpreuve de discrétion dansl’interprétation des politiques etla réalisation des directives duConseil et de ses comités.Le Conseil déploie tous lesefforts pour prendre les meilleuresdécisions possibles aprèsavoir pris connaissance detous les faits et de la documentationpertinente. Ainsi,il est en mesure de prendredes décisions qui seront àl’avantage de tous les membres.Compte tenu de ladiversité de nos membres, ilest souvent difficile de plaireà tout le monde. Cependant,le Conseil demeure sensibleà l’opinion des membres et,par le biais de ses administrateurs,sollicite et tientcompte des commentaires etdu point de vue des membres,que ceux-ci appuientou qu’ils s’opposent à ses décisions.Aussi longtemps que ces opinionssont constructives, bien intentionnéeset bien pensées, elles serontappréciées et considérées danstoutes les décisions que prend leConseil.Les membres disposent de plusieursfaçons pour manifester leursopinions et contribuer au processusd’élaboration des politiques. La meilleurefaçon consiste à s’adresser àleurs chapitres et associations provincialesqui, en retour, transmettentdes recommandations au Conseilnational par le biais de leurs administrateurs.Une autre façon consisteà participer aux sondages de l’Institutsur une variété de sujets. Assurezvousd’avoir le temps de répondreaux questionnaires parce qu’un tauxélevé de participation est toujoursrequis pour obtenir une image précisede l’opinion des membres. Les membrespeuvent également faire valoirleurs positions en les adressant auxdiverses adresses de courriel établiespar l’ICE pour traiter de sujets particuliers.Enfin, il existe les forums enligne qui permettent aux membres defaire connaître leurs pensées à diversniveaux. L’important est de se rappelerque nous faisons tous partie dela même équipe et que tous veulentun organisme meilleur et une professionaméliorée.À mesure que nous avançons,nous devons nous rappeler que nosobjectifs sont alignés et qu’ils visenttoujours ce qu’il y a de mieux pourles membres et notre organisme.La synergie que nous créons par lacollaboration dans un but communpeut nous propulser à des sommetsencore inconnus. Pour ce faire, ilnous suffit de tirer le traîneau dans lamême direction pour nous rendre oùnous voulons aller plus rapidementavec des résultats encore plus tangibles.C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

RC E OeportAIC Candidatesare the futureof the professionGeorges Lozano, MPAAIC Chief Executive Officernstitute members have beenimpacted by a significant numberof program and policy changes inrecent years and none more sothan Candidate members. Candidatesrepresent some 40% the membershipand, in the last two years, more than700 Candidates have been added to theInstitute’s roster of members. These newCandidates tend to be younger and assuch, are affecting the demographics ofthe Institute in a very positive way.It has been almost one year since theCandidate policy came into effect andalready we can discern marked differencesin the profile of the new Candidatesin comparison to the previous.First of all, the new group of Candidatesis joining the Institute with a differentunderstanding of the profession andthe career path that it provides. Theyhave been attracted by the profession’sinternational stature and recognition aswell as by its open-endedness and themany specialties and practice areas thatit covers.Given the significantly morestringent requirements to becomea Candidate and, subsequently, toobtain a professional designation,these new Candidates expect a lotof hard work and are prepared tomeet this challenge in expectation ofthe rewards that an AIC designationpromises. Many of these Candidateshave strong educational backgroundsincluding undergraduate degrees andother post secondary studies, givingthem the broad knowledge base thatwill serve them well as multidisciplinaryprofessionals. It is interesting to notethat the gender balance of this newgroup of Candidates is significantlydifferent from the previous, withalmost 40% of them being women, incomparison with the less than 30% ofmembership that women represented inprevious years.Perhaps the greatest differencebetween the new Candidates andthe preceding generation may be theexpectations that they have with respectto their chosen areas of work. Whileapproximately two thirds of AIC membershave been identified as appraisers whodo point in time estimates of value oncommercial and residential properties,one third of the membership is involvedin other aspects of valuation, bothin private practice and as employeeswithin the private and public sectors.Anecdotal evidence suggests that theproportion of new Candidates interestedin non-traditional areas of the professionis growing. This is evidenced by theincreasing membership in the non-feesector and the many specialty areas thatare emerging.As highly qualified professionals,AIC’s future designated members maychoose to work in a wide range ofappraisal related jobs in addition todoing appraisals on ICI and residentialproperties. Increasing numbers will steertowards top management positionswithin real estate related public andprivate sector organizations. Others willdevelop practices that serve specialtyreal property market niches and offerconsulting and advisory services therein.The well‐received We Value Canadaseminar that all Candidates must takeincludes a section where they developcareer plans and professional goals. Itsuggests that the profession is aboutto expand into many new areas of realproperty advisory services and thatappraisers will increasingly be at theforefront of all areas where real propertyvaluation expertise is required.10C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

With great expectations aboutthe interesting career prospectdoors that the Institute’sdesignations can open, theseCandidates are making it clearthat the Institute has an importantrole to play in helpingthem reach their professionalobjectives. In particular, theseCandidates expect to draw uponthe wealth of knowledge andexpertise that senior membersof the profession have and canimpart in their role as mentors.In short, Candidates are seekingout mentors who will providethem with advice in all areasof the profession and answertheir questions as they progressthrough the path to designation.Experienced designatedmembers of the Institute owe itto the profession to share theirknowledge with these youngCandidates. The Institute tooneeds to address the challengeof ensuring that it has a strongmentorship program in place tomeet current and future needs.Beyond mentorship, thesupervision of Candidates hasbeen tightened significantly withthe introduction of the Candidatecosigning policy and the creationof the Candidate registry. Themain objectives of the policy areto protect the public, but, equallyimportant, it is a means of helpingto ensure that Candidatesreceive the level of oversightthat they require to become, firstand foremost, better professionalsand, second, more qualifiedappraisers. Designated membersowe it to themselves and theprofession to take this policy toheart and help build a betterprofession by passing on theirknowledge and skills to the nextgeneration.The Applied Experience programcalls for Candidates todevelop professional skills andknowledge through practicallearning on the job. This requiresexposure to all aspects of theprofession and, as such, employers,mentors, and all involved insupervising and supporting Candidatesmust do their utmost tohelp them obtain the varied andprogressively more responsiblework experience that they needto be well‐qualified, multidisciplinaryprofessionals.Access to information is akey part of Candidate growthand development. This includesnot just technical information,but also practical informationabout day-to-day issues, professionaland business considerations,standards and ethics,and so on. In this respect, theInstitute is developing a sectionof the members’ web site exclusivelyfor Candidates. In thisweb area, Candidates will beable to exchange informationamong themselves and haveaccess to appropriate informationresources. Further, AICis creating a Candidate FocusGroup (a CRA Focus Groupis also being established) tofacilitate communication amongCandidates and to provide aforum from which their recommendationsand ideas can beforwarded to the Institute, itsBoard of Directors, and committees.With respect to this lastpoint, Candidates are makingit clear that they need to havea voice within the Instituteand the ability to help shapethe policies that will ultimatelyaffect them more than theolder generation of memberswho will retire in a relativelyshort time. Currently, Institutepolicy states that Candidatesare not voting members of theInstitute. Further, they may notbe identified on the Institute’sweb site or in the DesignatedMember Source Guide. Whileit is understood that, giventheir non-designated status,Candidates should not enjoythe same rights and privilegesas designated members, thesefuture professionals need acommensurate level of recognitionwithin AIC and a mechanismwhereby they can have asay in their own future.Candidate requirementsEffective January 1, 2007, all membersadmitted to Candidacy mustfulfill the following requirements:a) Hold a university degree at theundergraduate level or higher;ORb) Have completed all curriculumrequirements for the AACI designation,less 10 courses.In addition to the above requirement,a Candidate must have successfullycompleted the minimumintroductory education requirements,including the AIC Introductory WeValue Canada Workshop and anapproved Foundations in Real EstateAppraisal course (BUSI 330 orapproved equivalent), in order to beadmitted to Candidate membership.Upon admission to the Institute,the Candidate must complete themandatory Standards Seminar within24 months of the date of admission.All Candidates are required tosuccessfully complete one universitycredit course towards designationeach year to retain Candidate status.Candidates must also complete theMandatory Standards Seminar onceevery five years. The first date toreport is July 31, 2008, and coursestaken between January 1, 2006 andthe reporting deadline are eligible.All Candidates who join the Instituteon or after January 1, 2006 willhave a maximum of 10 years fromthe date of admission to candidacyto complete all education, curriculumand experience requirements toobtain their designation.All Candidates who joined the Instituteprior to January 1, 2006 mustmeet their assigned deadline for completionof education and curriculumrequirements, which is established bythe previous policy.In addition, effective January 1,2008, all Candidates applying fordesignation, at or after that date,must successfully complete an oraland written examination in order tobe awarded a designation.For full details see:http://www.aicanada.ca/e/careers _candidate _ membership.cfmC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 11

apportRd u c h e fde la directionLes membres stagiairesde l’ICE – L’avenir de laprofession en dépendGeorges Lozano, MPAAIC Chief Executive Officeru cours des dernières années,les membres de l’Institut et lesstagiaires en particulier, ontsubi l’influence de nombreuxchangements aux programmes et auxpolitiques. Les stagiaires représententenviron 40 % de tous les membres et aucours des deux dernières années, plusde 700 stagiaires ont été ajoutés à laliste de membres de l’Institut. Ces nouveauxstagiaires sont plus jeunes, ce quiaffecte la démographie de l’Institut d’unefaçon très positive.Déjà près d’une année s’est écouléedepuis l’entrée en vigueur de la politiquerégissant les stagiaires et nous pouvonsdéjà constater des différences marquéesdans le profil des nouveaux stagiairespar rapport aux précédents. D’abord, lesnouveaux stagiaires arrivent à l’Institutavec une façon différente de voir laprofession et les occasions de carrièrequ’elle offre. Ils ont été attirés par lanature et la reconnaissance internationalesde la profession, la liberté qu’elleoffre et les nombreuses spécialités etpratiques qu’on y retrouve.Compte tenu des exigences beaucoupplus sévères d’admission à titrede stagiaire et donc de l’obtention de ladésignation professionnelle, les nouveauxstagiaires s’attendent de déployer desefforts considérables pour relever ce défidans l’attente des avantages associés àla désignation de l’ICE. Plusieurs de cesstagiaires ont de solides antécédentspédagogiques, y compris des diplômesde premier cycle et d’autres certificatspostsecondaires leur donnant une vastebase de connaissances qui leur viendrontcertes en aide comme professionnelsmultidisciplinaires. Fait intéressant àsouligner, l’équilibre des sexes chez cesnouveaux stagiaires diffère largementdu passé avec les femmes représentantprès de 40 % des stagiaires versus moinsde 30 % dans les années précédentes.Peut-être que la différence la plus importanteentre les stagiaires d’aujourd’hui etceux de la génération précédente résideau niveau des attentes qu’ils ont face audomaine de travail qu’ils choisissent. Bienqu’environ les deux tiers des membresde l’ICE aient été identifiés comme desévaluateurs qui se livrent à l’évaluationtraditionnelle de propriétés commercialeset résidentielles, le tiers des membres selivrent à d’autres aspects de l’évaluationen pratique privée et comme employésdes secteurs public et privé. L’évidenceanecdotique suggère que la proportion denouveaux stagiaires qui s’intéressent auxsecteurs non traditionnels de la professionest à la hausse. Cela est constaté parl’augmentation du nombre de membresdans le secteur salarié et la quantité denouvelles spécialisations.Comme professionnels hautement qualifiés,les futurs membres agréés de l’ICEpeuvent choisir de se livrer à une variété detravaux liés à l’évaluation en plus de fairel’évaluation d’ICE et de propriétés résidentielles.Un nombre croissant d’entre-euxviseront des postes de direction au seind’organismes liés à l’immobilier dans lessecteurs public et privé. D’autres offrirontleurs services consultatifs sur le marché depropriétés spécialisées. L’atelier hautementconsidéré et intitulé Nous valorisons leCanada auquel tous les stagiaires doiventparticiper inclut l’élaboration de plans decarrière et d’objectifs professionnels. Il suggèreune expansion de la profession dansplusieurs nouveaux domaines de consultationimmobilière et que les évaluateursseront au premier plan de tous les secteursoù leur expertise sera requise.Entretenant des attentes élevées faceaux occasions de carrière intéressantesque peuvent offrir les désignations del’Institut, ces stagiaires montrent clairementque l’Institut a un rôle important à12C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

jouter pour les aider à atteindre leursobjectifs professionnels. Tout particulièrement,ces stagiaires s’attendentde puiser à même les vastes connaissanceset l’expérience des membreschevronnés de la profession quiagiront comme mentors. En bref, lesstagiaires cherchent des mentors quileur offriront des conseils sur toutesles facettes de la profession et quirépondront à leurs questions à mesurequ’ils progresseront sur la voie de leurdésignation. Les membres agréés ethautement compétents de l’Institutse doivent de partager leurs connaissancesavec ces jeunes stagiaires.L’Institut se doit également d’assurerqu’un solide programme de mentoratest en place en réponse à ses besoinsactuels et futurs.En plus du mentorat, la surveillancedes stagiaires a été raffermie considérablementavec l’introduction de lapolitique de cosignature des stagiaireset la création d’un registre des stagiaires.Les principaux objectifs de lapolitique sont de protéger le public,mais elle sert aussi à assurer queles stagiaires reçoivent le niveau desurveillance dont ils ont besoin pourdevenir de meilleurs professionnels etdes évaluateurs encore plus qualifiés.Les membres agréés se doivent, ainsiqu’à la profession, de prendre cettepolitique à coeur et de contribuer àl’amélioration de la profession entransmettant leurs connaissances etleurs compétences à la génération quisuit.Le programme d’expérienceappliquée permet aux stagiaires dedévelopper les compétences et lesconnaissances professionnelles parl’acquisition d’une expérience pratiqueau travail. Pour ce faire, le stagiaireest exposé à toutes les facettes de laprofession et ainsi, les employeurs,mentors et tous ceux qui participent àla surveillance et au soutien des stagiairesdoivent déployer tous les effortspour qu’ils acquièrent l’expérience detravail variée et progressivement plusresponsable dont ils ont besoin pourdevenir des professionnels multidisciplinaireshautement qualifiés.L’accès à l’information est importantpour la croissance et la formationdu stagiaire et inclut non seulementl’information technique, maisl’information pratique sur les questionsde tous les jours, les considérationsprofessionnelles et d’affaires, lesnormes, l’éthique et ainsi de suite. Àce niveau, l’Institut s’affaire à développerune section exclusivement àl’intention des stagiaires dans la sectiondes membres seulement du siteWeb. Les stagiaires pourront partagerde l’information entre eux et accéderà des ressources éducatives appropriées.De plus, l’ICE s’affaire aussià créer un groupe de spécialistes surles stagiaires (en plus d’un groupesimilaire sur les CRA) pour faciliter lacommunication entre les stagiaireset servir de forum à même lequeldes recommandations et des idéespourront être adressées à l’Institut,son Conseil d’administration et sescomités.À la lumière de ce dernier point,il est clair que les stagiaires ontun mot à dire au sein de l’Institutet qu’ils doivent pouvoir contribuerà mouler les politiques qui lesaffecteront encore plus que lagénération précédente de membresqui prendront leur retraite d’ici peu.Actuellement, la politique de l’Institutstipule que les stagiaires ne sontpas membres votants de l’Institut.Aussi, ils ne peuvent être identifiéssur le site Web de l’Institut, nidans le Guide Source des membresagréés. Bien qu’il soit entendu queparce qu’ils n’ont pas encore leurdésignation les stagiaires ne peuventbénéficier des mêmes droits etprivilèges que les membres agréés,ces professionnels de l’avenir doiventrecevoir un niveau proportionnel dereconnaissance au sein de l’ICE etdisposer d’un mécanisme qui leurpermettra d’avoir un mot à direquant à leur avenir.Les exigences pour les membres stagiairesDepuis le 1 er janvier 2007, tous lesmembres admis à la catégorie destagiaires doivent respecter les exigencesqui suivent :a) Détenir un diplôme universitairede premier cycle ou supérieur; OUb) Avoir complété toutes les exigencesdu programme menantà la désignation AACI, moins 10cours.En plus des exigences ci-dessus,un stagiaire doit avoir complété lesexigences pédagogiques minimumd’introduction, y compris l’atelierNous valorisons le Canada de l’ICE etun cours de base approuvé en évaluationimmobilière (BUSI 330 ou uneéquivalence approuvée) afin d’êtreadmis comme membre stagiaire.Suite à son admission à l’Institut,le membre stagiaire doit compléterle colloque obligatoire sur les normesdans les 24 mois suivant ladite dated’admission.Pour maintenir leur statut de stagiaire,tous les membres stagiairesdoivent compléter avec succès uncours universitaire menant à la désignationchaque année. Les stagiairesdoivent aussi compléter le colloqueobligatoire sur les normes une foistous les cinq ans. La première datede rapport est fixée au 31 juillet 2008et les cours suivis entre le 1er janvier2006 jusqu’à la date de rapport sontadmissibles.Tous les stagiaires qui ont jointles rangs de l’Institut le ou après le1 er janvier 2006 ont un maximumde dix ans à compter de leur dated’admission pour compléter toutesles exigences pédagogiques, duprogramme de l’ICE et d’expérienceappliquée pour obtenir leur désignation.Tous les stagiaires qui ont joint lesrangs de l’Institut avant le 1 er janvier2006 doivent respecter l’échéanceétablie pour compléter les exigencespédagogiques et du programme del’ICE, telles que stipulées dans lapolitique antérieure.De plus, à compter du 1 er janvier2008, tous les stagiaires qui ferontleur demande de désignation doivent,à cette date ou après celle-ci, avoircomplété avec succès un examenoral et écrit afin d’obtenir la désignationconvoitée.Pour plus de détails, veuillez consulter :http://www.aicanada.ca/f/careers _candidate _ membership.cfmC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 13

Appraisal Institute of Canada2008 Annual ConferenceDelta St. John’s, St. John’s, Newfoundland & LabradorJune 4 - 7, 2008The Newfoundland Association of the AppraisalInstitute of Canada is very pleased and very proud tohost the Institute’s 2008 Annual Conference withinour unique city at the eastern edge of North America.St. John’s is located on the eastern coast of theisland and is the perfect launching pad to explore theworld’s sixteenth largest island. The island has morethan 1,000 villages nestled along 9,600 kilometresof coastline – each with its own history, stories,music and dialect.While St. John’s and Newfoundland, in general,are an amazing vacation destination, you canalso anticipate an exciting delegate program.The organizing committee has been planning theeducational focus of this conference around thetheme Valuation – Just the Tip of the Iceberg.A wide variety of interesting and informativesessions are being planned, including an off-siteworkshop providing a multi-disciplinary overviewof the redevelopment of a former 80-acreAmerican-Canadian military base in the city. Thisredevelopment project has been approximately10 years in the making, and will be well underwayduring spring 2008. We will be taking you on-sitewith appraisers, marketing consultants, engineers,architects, planners, etc., and will be demonstratinghow the appraisal profession dovetails with theseother professions.Do not miss this opportunity to visit one ofCanada’s most picturesque, scenic and uniqueregions, world-renowned for its fabulous hospitality.Start your travel planning now; book early, as spaceis limited. St. John’s is a popular destination duringthe summer, and hotels regularly sell out. We alsorecommend that you book a car early if you plan toexplore the island. This will be a conference you willnot want to miss.Glen Power, AACI, P. AppChair, 2008 Conference Committee14 AC a n a d i a n14 AppraiserVolume 51 • book 4 • 2007E C valuateura n a d i e n

NOTICE OF ANNUAL GENERAL MEETINGAppraisal Institute of Canada AGM 2008Delta St. John’s, St. John’s, Newfoundland & LabradorFriday, June 6, 2008Agenda1. To confirm the Minutes of the June 8, 2007 AGM.2. To receive Reportsa) Presidentb) Managementc) AIC Committee Reports3. To receive audited financial statements for the pastyear and appoint auditors for the forthcoming year.4. To elect the Board of Directors of the Appraisal Instituteof Canada.5. To consider AIC By-law revisions as presented by theBoard of Directors.6. To consider resolutions submitted in accordancewith the By-laws.7. To consider all other business as may properly comebefore the meeting.Note: Designated members have the right to vote by proxy.AVIS D’ASSEMBLÉE GÉNÉRALE ANNUELLEInstitut canadien des évaluateurs, AGA 2008Delta St. John’s, St. John’s, Terre-Neuve-et-LabradorVendredi, le 6 juin 2008Ordre du jour1. Approbation du procès-verbal de l’AGA du 8 juin 2007.2. Présentation des rapportsa) du Présidentb) de la directionc) des comités de l’ICE3. Présentation des états financiers vérifiés du dernier exerciceet nomination des vérificateurs pour le prochain exercice.4. Élection des membres du Conseil d’administration del’Institut canadien des évaluateurs.5. Examen des modifications aux règlements de l’ICE, telles queprésentées par le Conseil d’administration national (CAN).6. Examen des résolutions présentées conformément auxrèglements.7 Étude de tous les autres points dûment présentés àl’Assemblée.Nota : les membres agréés ont le droit de voter par procuration.

I N S U R A N C E N E W S A N D V I E W SFirst ProfessionalLiability Insurance CompanyToday, we look at the state of the Appraisal Institute of Canada’sliability insurance program, as it approaches its secondanniversary as a captive insurance company.Brian DuncanAACI, P. App,President of the Board, FPLICLFPLICL – two years laterBy Brian Duncan, AACI, P. App, President of the Board, FPLICLs we approach the secondanniversary of the creationof the insurancesubsidiary company of theInstitute named First ProfessionalLiability Insurance Company Limited(FPLICL), it seems appropriate forme, as a President of FPLICL, toprovide you with an update of theprogress that has been made overthe past two years.As you may be aware, the membershipof the Institute approved thecreation of an insurance subsidiarycompany at the May 2005 annualmeeting of members. Subsequently,a corporation was created and theassets and liabilities of the Institute’sProfessional Liability InsuranceProgram (PLIP) were transferred to itin exchange for 100% ownership.The concept of establishing aninsurance subsidiary company orinsurance captive is nothing newand has been practiced by for-profitcorporations, primarily as a means ofreducing their tax burden. In recentyears, non-profit organizations,including professional associationsthat operate insurance programs onbehalf of their members, have alsotaken to establishing insurance subsidiarycompanies for another reason16C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n– to prevent the possibility of anyliabilities associated with their insuranceprograms being attached to theparent organization itself.Before the creation of FPLICL,the Institute was exposed to claimsmade through the insurance program.Although improbable, acatastrophic claim could have compromisedthe very existence of theIn addition toprotecting theInstitute, the insurancesubsidiary, which isa separate corporateentity wholly ownedby AIC, is betterpositioned to seekout and obtain liabilityinsurance on theworld markets.Institute, and this is why the insurancesubsidiary was established. Inaddition to protecting the Institute,the insurance subsidiary, which isa separate corporate entity whollyowned by AIC, is better positionedto seek out and obtain liabilityinsurance on the world markets.Moreover, the insurance subsidiaryprovides the kind of flexibility thatthe old program did not have, withrespect to expanding and enhancingthe insurance program to accommodatespecialty appraisal services,e.g., machinery and equipment valuation,to name but one.FPLICL is domiciled in Barbados,a world centre for insurance captivesand, particularly, Canadian interests.Barbados was chosen over a numberof other captive jurisdictions worldwide,because it best addressed theInstitute’s needs for an insurancesubsidiary with low incorporationand overhead costs. The insurancesubsidiary takes its direction from athree-member board, which reportsto AIC, the sole shareholder. FPLICLis managed by a company under contractto it – Amphora Captive InsuranceManagers in Barbados. Claimsmanagement continues to be handledby the former Leonard French &

Co. Ltd., now SCM Adjusters CanadaLtd. in Winnipeg, while the insurancepolicy is issued by Travelers GuaranteeCompany of Canada.I am pleased to say that thisarrangement has worked well andthat, notwithstanding a few challengesrelated to the 2006 financialaudit, the insurance program ishealthy, the stabilization fund is instrong shape, and the needs of theprogram as recommended by ouractuary are being met. This is goodnews in several ways. First, we arein a positive position to weatherany downturns in the real estatemarket. Second, we have been ableto enhance the program by doublingthe coverage from $1 millionto $2 million, at no additional costto the members. In fact, over thepast three years, the program hasbeen able to rebate members from$10-$11 for non-fee members and$200-$700 for fee members. Lastyear, we also introduced a $25,000identity theft policy for each memberat no additional cost. But, low claimsand premium stability are only partof the story. The AIC Insurance AdvisoryCommittee continues to do acommendable job in ably advising onprogram recommendations, claimsmanagement and claims preventionmeasures that help to mitigateclaims and maintain and/or improveour low costs.In conclusion, the first two yearsof FPLICL’s operation have beenvery successful, and the financesof the corporation and the insurancestabilization fund are in verygood shape. In the coming year, Iam confident that we will be ableto pass on additional savings to themembership in the form of premiumrebates, as a result of our continuedlow claims experience combinedwith sound management practices.I look forward to continuing to serveas President of FPLICL in 2008,while seeking additional programenhancements to further strengthenand improve the program to benefitall AIC members.Pleased to congratulatethe Appraisal Institute of Canadaon its upcoming 70th anniversaryProud sponsor of the Appraisal Institute of Canada 2007 National ConferenceC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 17

The newAICMEMBER PROFILEB y C h r i s t i n e H a n l o nitting in hisEdmonton office,surrounded byfour monitors, twoscanners and a printer, 27-year-old David Lopatka,AACI, P. App is exactlywhere he wants to be.True, the technology isgreat, and so isworking on commercialproperties at GettelAppraisals, but what isreally behind that smileis the fact that, five yearsafter graduating fromuniversity, he is poised tomove full steam ahead inthe appraisal profession thathe loves.When David completedhis Bachelor of Educationprogram at the University ofAlberta in 2002, he knew hewanted to do something toexpand on his degree. Whathe did not know was where hewas heading.While searching the jobpostings on the university’s jobsearch website, he stumbledupon a position at a localreal estate appraisal firm.Intrigued, he decided to apply.Although he did not get thejob, by the end of the interviewhe was hooked. This waswhere he wanted to be.“One of the things that attractedme to appraisal work is that, if youexcel, you will get rewarded for yourefforts,” he explains. “I wantedto work for myself one day. And Ifound real estate very interesting.”In fact, David was so committedto pursuing this avenue that he wastaking three courses towards hisAACI even before he was hired byan appraisal firm. He then workedfor an entire year before decidingto devote himself full-time tocoursework.Because his education degreedid not qualify him for the fast-trackPost-Graduate Certificate in RealProperty Valuation, David knewthat he needed to complete 15courses for his AACI designation.Taking his former experience toheart, he approached the challengelike a lesson plan. “I outlined everycourse I was going to take in everysemester,” he recalls. “I called it myfive-year plan.”By 2004, when he decided toresume juggling both work andstudy, he was able to balanceone of the more difficult courseswith a lighter course in the samesemester. Nonetheless, it was apace that demanded focus anddetermination. There was little timefor personal interests.But, David was undeterred.While he was pursuing his appraisaldesignation, one of his brothers wasThere are always opportunities to learnand to grow. The possibilities are endless.That is one reason I love this job.18C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

professionalarticling as a lawyer and anotheras a chartered accountant. “I couldsee how hard they were workingand I followed suit,” he explains.In May 2006, at the age of 26,David obtained his AACI. It hadtaken him four years.“I wanted to get it done early inmy career, so I could focus on otherthings,” he explains. “That way,when I was ready to get marriedand have children, I would not needto worry about it.”In fact, a little over a year aftercompleting the program, David wassaying his wedding vows. Everythingwas falling into place.Along with freeing up more timefor his personal life, completinghis AACI early on has also allowedthe young appraiser to focus onrapidly expanding his knowledgeof commercial appraising. Peoplehe met during his coursework haveproven to be an invaluable resourcein this professional development.Besides providing him with asolid foundation for developing hisexperience and expertise, taking theAACI courses afforded David theopportunity to connect with manyother appraisers. “If you are takingcourses, try to network as much asyou can with the other students,”he recommends. “Some of myclosest colleagues and friends arepeople I met through UBC. It iscrucial for getting business dataand for helping each other out.”David believes that appraisersshould always have mentors, notonly when they are Candidates,but throughout their entire careers.Since being nurtured by his first‘official’ mentor, Rolf Halvorsen,AACI, P. App, David has enjoyed theguidance of other senior appraisersincluding Brian Gettel, the otherAACI in the office. (The firm alsoencompasses a Candidate appraiseras well as ‘The Network,’ a divisionwhich tracks all commercial sales inthe Edmonton area.)Despite a busy schedule, Davidhas also found time to volunteer.As a Candidate, he startedvolunteering with the EdmontonChapter, planning local appraisalevents. He now also serves onthe Appraisal Institute of Canada’sCommunications Publicationssub-committee. “Volunteering issomething I have always felt wasimportant,” he explains. “It is aboutgiving back.” He adds that beinginvolved with the Institute providesyet another avenue for developingas a professional.“There are always opportunitiesto learn and to grow,” he says.“The possibilities are endless. Thatis one reason I love this job. It isa fantastic field. I look forward togoing to work, and, at the end ofthe day, when I finish a report, I amproud that my name is on it.”Over the past year, David hasdeveloped increasingly efficientbusiness processes by usingtechnology — including shorthandrecognition software — to supporthis work. He enjoys the challenge ofconstantly producing higher qualityreports while expanding the rangeof properties he can appraise andthe services he can offer. AlthoughDavid is still in the process offormulating a new five-year-plan,he already knows he would like tobecome proficient in such areas asexpropriation, litigation and surfacerights. With an AACI already underJason WhiteBased on thedemographics, if Iwork hard and gainas much experienceas possible now,I know I will be avaluable asset foryears to come.his belt, he is well equipped fora promising future in commercialappraising.On the other side of the country,Jason White’s star is alsorising. After becoming a Candidatewith Atlantic Realty Advisors(ARA) Fredericton Appraisals inMay 2006, he is finishing his lastcourse and preparing to start hisdemonstration appraisal report inthe spring. The 28-year-old anticipatesobtaining his AACI designa-C a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 19

MEMBER PROFILEtion by the first quarter of 2009.Since making the decision tojoin the appraisal profession, hiscareer has progressed rapidlydue, in part, to his carefuldeliberation and preparationbefore proceeding to a position atARA. The other contributing factoris the Post-Graduate Certificatein Real Property Valuation, thefast-track program that enabledJason to leverage his Bachelor ofBusiness Administration.Upon obtaining his degree fromthe University of New Brunswick in2002, the young graduate movedto Ottawa where he worked for abank. It was not long before herealized this was not where hewanted to be. After back-packingthrough Europe for a month,Jason returned to Fredericton andaccepted a sales position with acompany that sold products forfinancial institutions.Through a chance invitationto the Fredericton Chamber ofCommerce Christmas Party,his life took a significant turn.At the party, Jason met PeterAtkinson, a CRA and partner atARA Fredericton Appraisals. Peterexplained that the demographicsof the office — particularly theage of those specializing incommercial appraisals — wereprompting the search for a newCandidate.Impressed by Jason, Petersuggested he put his nameforward. Jason then met with themanaging partner, Harold Moore,AACI, P. App and shadowedPeter in the field several times.At the same time, Harold strivedto make the transition easier.“He emphasized that there wasa way to help me start in theindustry without my income beingbased 100% on commission,”recalls Jason. But, saddled withpayments for a new house andcar, the young salesman was notquite ready to give up a lucrativesource of income to study fulltime.“Once you are on a different20C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e npath, it can be difficult to switch,”says Jason, adding that, had heheard of the appraisal professionwhile still at university, he mighthave wanted to take someof the required courses backthen. As it was, he spent a yearthinking about the move beforeproceeding.Several factors were key toJason’s ultimate decision. Onewas a concern that his sales jobmight not provide the potentialfor advancement afforded by aspecialization in the appraisalprofession. The other was hisgrowing affection for the natureof appraisal work compared tosales. “I am an analytical person,I like working with numbers,”he explains. “I also like workingwith people, but I did not like‘selling’ every day. I knew that aprofessional appraiser was wellrespected,that the demographicsin the profession were gettingolder, and that there would bepossibility for advancement withinfive years.”When he finally agreed tojoin ARA Fredericton Appraisals,Jason was required to take theStandards Seminar and theBusiness 330 Foundations ofReal Estate Appraisal course.During the eight months it took tocomplete these requirements, hetook the opportunity to acquainthimself with the profession.“Once I made thecommitment, I started comingin and volunteering with theappraisal team,” he explains.“That way, I had a better idea ofwhat to expect.” The flexibilityof his sales job also made itpossible for him to take theoccasional afternoon to observethe team out in the field on anappraisal.Knowing that an AACIdesignation was his ultimate goal,Jason decided to immediatelybecome a Candidate, with JoelLaPointe, AACI, P. App as hismentor. But, again, the decisionwas not an easy one. The steeplearning curve coupled withthe reduced income made thetransition challenging. “I knew Ihad to take a short-term loss for along-term gain,” admits Jason.A year and a half later, nowwell on his way to his AACI, theyoung appraiser is finally beginningto enjoy the advantages of hisdecision to join the profession.He appreciates the variety incommercial appraisals, includingriparian rights along the MiramichiRiver.Flexible hours and the fact thatthe office is only a five minutewalk from his home are makingit easy to incorporate into hislife such activities as outdoorsports. Although he knows thathis timetable will be full whenhe starts the demonstrationreport, so far he has been able tobalance his studies with his workby taking less demanding coursesduring periods when he knowshe will be busier with appraisals.“I have tried to stay a couple ofassignments ahead,” he adds.“When it gets really busy in theoffice, I can’t do anything butwork.”But, it is the work that hasenabled him to envision afuture in which he might oneday specialize in consulting andassessment appeals. Until then,he knows that his plate will be fullwith demands for his expertise.Demographics reveal the medianage of commercial appraisersin New Brunswick to be around50, indicating that demand maysoon outstrip the number ofprofessionals available to do thework.Jason knows that this puts himin an enviable position. “Based onthe demographics, if I work hardand gain as much experience aspossible now, I know I will be avaluable asset for years to come,”he says, adding that he is alreadytackling a number of interestingand exciting projects. “There wereobstacles, but I am glad I madethe move I did.”

VOLUNTEER RECOGNITIONCommitment and dedication…the keys to our successThe Appraisal Institute of Canada(AIC) is blessed with a rich abundanceof determined and dedicatedvolunteers who make thework of the Institute possible andwho help move the professionforward in progressive and fundamentalways. Under heavy commitmentsboth professionally andpersonally, AIC members havestepped to the fore and proudlyserve in so many ways. Whetherthrough elected office, servingon a committee, or assisting inconference planning, their contributionsare invaluable.We are pleased to recognizeand honour our dedicated volunteersin Canadian Appraisermagazine. In each issue, you willmeet some of your colleaguesand learn why serving the Instituteis so important to themboth personally and professionally.We always need individualsto serve the Institute, now andin the future…we are sure thattheir stories will inspire you to getinvolved.22C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e nMATHIEU MAILLET, AACI, P. AppAltus GroupMathieu Maillet, AACI, P. App is aSenior Valuation Consultant withAltus Group Limited. In 1997,he began his career in the publicsector as an assessor with ServiceNew Brunswick and immediatelyjoined the Appraisal Institute ofCanada (AIC). Right from the start,Mathieu was keenly interestedin the profession and his regularattendance at local annualmeetings and various seminarswas noticed by provincial leadersin the association. They asked himto become a provincial committeemember for the New BrunswickAssociation of Real EstateAppraisers (NBAREA) and,although still just a Candidate, heeagerly accepted. He achieved hisCRA designation in 2002 and, bythen, was serving as South-EastRegional Representative for theBoard of Directors and continuinghis educational path in pursuit ofhis AACI designation.Mathieu discovered that hisvolunteer roles facilitated themeeting of various professionalsfrom a diverse backgroundwhich, in turn, lead to his careertransition. He left his public sectorposition as an assessor and joinedAltus Group in the fall of 2003. Atthat time, he was nominated toserve on the provincial associationexecutive, but declined due toextensive commitments withhis education work and the newchallenges brought on by hiscareer change. Nevertheless,Mathieu reports he told hissupporters, “I will accept any otherposition once I achieve my AACI.”Apparently, they took him at hisword as they quickly nominatedhim as Vice-President at NBAREA’sspring 2006 AGM, when it wasapparent that his education pathaimed at achieving his AACI wascoming to a close. Currently,Mathieu is President of the NewBrunswick Association of RealEstate Appraisers and he will servein this capacity until April 2008when his term comes to a close.Mathieu has strong beliefs

equirements, including demandingundergraduate degrees. They areaware of our demographics andour need to grow our Instituteso that we can meet marketneeds and position ourselveswith current and potential clientsto avoid losing market share toother competing groups (e.g.,other property specialists oraccountants). They saw thediversity in our CommunicationsCommittee, which represents theAIC with members from Westernand Eastern Canada, and pointsin between. We have members inprivate practice as well as in thepublic domain, we have designatedand Candidate members, and wehave a wide range of memberexperience (recent/young andthose who, well, have been aroundawhile). This group brings a wideperspective for Cundari to createa marketing plan that is bestdesigned to take us where wewant to be.How will our story be told? Howdo we attract attention? The firstthing we will see is a new lookthat promotes AIC in the form ofa new logo and descriptor. Wewill see ourselves in professionalmagazines targeting our potentialemployers, clients and partners.We will have a new website,brochures, exhibit materials,PowerPoint presentations andrecruitment materials. All of thiswill be available for use at AIC,by our provincial associations/chapters, and by members. Allof us will have access to thetools which will aid in promotingourselves and our profession andin getting the message to thetarget market.This is a three-year plan, and,because we are skipping theSuper Bowl, we have the budgetAll of us will have access to the toolswhich will aid in promoting ourselves andour profession and in getting themessage to the target market.to sustain us. This promotion hasbeen so long in the making thatsome may have forgotten why it isnecessary. The answer, of course, isto enhance the professional imageof our members and the Institute.What will raising the profile do? Itwill help Canadians realize that AICsafeguards the quality and integrityof valuation advisory expertise inCanada. When they deal with ourmembers, everybody wins and thelong-term prosperity of business,government and the public is theultimate outcome.Communications CommitteePaul Olscamp, AACI, P. App -ChairGlen Power, AACI, P. AppTom Fox, AACI, P. AppBeverley Girvan, AACI, P. AppGrace Ang-Lim, CandidateTo contact this committee email:communications@aicanada.caC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 25

s t a n d a r d sB y R a y B o w e r , A A C I , P. A p pC h a i r , S t a n d a r d s C o m m i t t e eAIC’s Standards Rules– the ethical nuancesthics charges are seriousmatters. It is one thingto do something wrongby mistake. It is anothermatter entirely when one doessomething wrong on purpose.The Standards Committeeis proposing to add the word‘knowingly’ to certain EthicsStandards Rules. For example,Ethics Standards Rule 4.2.1states that “it is unethical fora member to fail to complywith Bylaws, Regulations andStandards…….” That does notmean that, if a member is chargedwith an Appraisal StandardsRule infraction, he or she isautomatically charged with EthicsStandards Rule 4.2.1. But, if amember ‘knowingly’ breaks aStandards Rule, this ethical rulewould also be broken.Ethics are a set of rulesimposed by society to ensurethat members of society actin a manner acceptable tosociety. Honesty and integrityare the cornerstones of ethicalrules. Standards Rules, on theother hand, deal with issues ofcompetency.When a member is charged withan ethical violation, he or she, inessence, is being told that theyhave acted dishonestly. Anyonewho has ever served on theProfessional Practice Committees(Investigating, Adjudicating orAppeal) will tell you that not onlyare ethics charges very serious,they are also very hard to prove.26C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e nHow does one prove that amember acted dishonestly, orknew that they were purposefullydoing something wrong? The mostcommon way this is proven is withcases of repeat offenders. If anappraiser is charged with a breachof a Standards Rule a second time,chances are they will be told “Wepointed out this mistake before;therefore, you knew that it waswrong, but you did it again anyway.”Honesty and integrityare the cornerstonesof ethical rules.Not all ethical rules requirethe word ‘knowingly,’ and not allethical rules are hard to prove. Forexample, the word ‘knowingly’ maybe applicable to Ethics Rule 4.2.3,which states that “it is unethicalfor a member to act in a mannerthat is misleading.” Sometimes anappraiser can unwittingly make amistake that misleads. For example,if an appraiser correctly measures ahouse, but incorrectly calculates aliving area, that mistake would carrythrough to the value estimate andthe intended user may be misledby both the value conclusion andthe size of the house. If it resultsin damages, this type of mistakeis covered by our insurance. Onthe other hand, if the appraisercorrectly calculates the living area,but chooses larger houses ascomparables and ignores the salesof similar sized houses, the readermay be purposefully misled and anethical violation may be charged. Ifthis is proven and damages sought,insurance coverage may be denied.Ethics Rule 4.2.4 does notrequire the word ‘knowingly.’ Itstates that “it is unethical fora member to act in a mannerthat is fraudulent.” The word‘fraud’ already connotes criminaldeception. The insurance programdoes not cover fraudulent activities.The Standards Committee ishoping to emphasize and clarifythe seriousness of ethical ruleviolations by adding the word‘knowingly.’ If you would like tocomment on this, please contactthe Standards Committee at:Appraisal Institute of Canada, 403– 200 Catherine Street, Ottawa,Ontario, Canada K2P 2K9, or at theemail shown below.Standards CommitteeRay Bower, AACI, P. App - ChairAnne Clayton, AACI, P. AppBrad Wagar, AACI, P. AppIain Hyslop, AACI, P. AppBrian Varner, AACI, P. AppChris Perret, AACI, P. AppCraig Soderquist, AACI, P. AppTo contact this committee email:standards@aicanada.ca

California’s newAppraiser Influence Lawalifornia has approved new legislationmaking it a crime for anyoneto improperly influence or attempt toimproperly influence, through coercion,extortion or bribery, the development,reporting, result or review of a realestate appraisal sought in connectionwith a mortgage loan.In effect, the bill should prohibitanyone with an interest in a real estatetransaction involving an appraisal fromimproperly influencing, as specified,the reporting, result or review of a realestate appraisal sought in connectionwith a mortgage loan.The legislation is referred to as: Anact to amend Section 11323 of theBusiness and Professions Code, and toadd Article 7 (commencing with Sec-tion 1090.5) to Chapter 1 of Title 4 ofPart 4 of Division 2 of the Civil Code,relating to real estate appraisals, anddeclaring the urgency thereof, to takeeffect immediately. (Approved by theGovernor on October 5, 2007)This bill adds prohibitions intendedto restrict improper influence on theconclusions of a property appraisal.Specifically, this bill:1) prohibits any person with an interestin a real estate transaction involvingan appraisal from improperlyinfluencing an appraisal sought inconnection with a mortgage loan;2) allows a person with an interest ina real estate transaction to ask anappraiser to consider additionalappropriate information, providefurther detail for the appraiser’svalue conclusion, or correct errorsin the appraisal report;3) makes a violation of these provisionsby any person licensedunder any state licensing law aviolation of that law if it occurredwithin the scope of the person’slicensed duties; and4) includes the development andfinancing of real property withinprovisions of existing law prohibitingappraisers from engaging inany appraisal activity in connectionwith the purchase, sale or transferof real property, if their compensationis dependent on or affectedby the value conclusion generatedby the appraisal.To read this legislation online visit:http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb _ 0201-0250/sb _ 223 _ bill _ 20071005 _ chaptered.pdfC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 27

I N V E S T I G A T I N GB y D e a n a H a l l a d a y , C R AM e m b e r , I n v e s t i g a t i n g C o m m i t t e eDraft appraisal reportsshould be handled with careecently, the InvestigatingCommittee has investigateda number of complaintswhere two or moreappraisals, done by the samemember, on the same property,have been completed within a veryshort period of time – in somecases, within days or weeks ofeach other. While that may notbe unusual, the complicationarises because the reports areat variance with each other interms of wording and facts,which could lead to an accusationthat one, or both, ofthe reports is misleading.Usually, what has happenedin these cases is that one ofthese reports was intended to bea ‘draft,’ but ended up in the handsof the client/public as an appraisalreport, which is then, of course, subjectto the Canadian Standards.Each day, appraisers workingin private practice encounter avariety of situations, some of whichmay not be definitively outlinedin the Standards. To avoid thesesituations, the following should beconsidered as a guideline.In the Volume 51, Book 1, 2007edition of the Canadian Appraiser,we discussed how to handle partiallycompleted appraisal reports. (PartiallyCompleted Appraisal Reports,Page 32, Book 2, 2007 http://www.aicanada.ca/e/pdfs/Can _ App _Vol _ 51 _ Bk _ 2 _ 15.pdf) Theseare different from draft reports. Thecircumstances surrounding whetheror not providing a draft report isappropriate would be based on the28C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n‘reasonable appraiser’ test andthe intended use and user of theappraisal report.When is it appropriate to providea draft report to your client? Theseinstances may include situationswhen the facts of the property maybe in question such as:• a retrospective report where thedwelling no longer exists or haschanged substantially from theeffective date to the inspectiondate, e.g., water or fire damage;• a marital dispute where theclient no longer resides in thehome and there may have beenchanges to the property fromthe date of separation, date ofmarriage, or other effective date;• difficult assignments wherewording may be critical, e.g.,expropriation, legal purposes;and• instances where it may bereasonable for a client to requestthat the appraiser elaborateon rationale, research ormethodology, e.g., work preparedfor court or legal testimony.Normally, it is not appropriate toprovide a ‘draft’ report for mortgagelending for a financial institution orfor sale/marketing purposes for aprivate client.In the case of a retrospectivereport, or where the facts of theproperty may be in question, itmay be easier to complete thedescription portion of the appraisalreport (up to the valuation section)

It should be clear to the client when thedraft is delivered that, althoughwording or facts may be openfor discussion, values are not.and have the parties agree on thefactual content of the appraisal.The valuation section would notnecessarily be completed at thistime. It may be more difficultfor the parties to dispute thevalue later, if they have had anopportunity to review, commentand contribute to the reportedfacts of the property. Once thereport is finalized, if the facts of theproperty are called into question,it can often lead to a client orreader questioning the credibilityof the entire report, even thoughthe discrepancy would not have anyinfluence on the value.A change of wording in a reportwhen it is in a draft form is muchless complicated than a changeto a signed, sealed and deliveredreport. Think about explainingto a judge or the InvestigatingCommittee why a notation on yourappraisal report states ‘revised.’ Or,try explaining to the InvestigatingCommittee why there are twosigned appraisal reports issued onthe same property, on the sameday, with the same value, but thereis a variance in the wording andfacts between the two reports.The draft report may be providedin part or in whole, depending onthe intended use and user of thereport, along with the reasonableappraiser test. Each page that isprovided should be clearly markedwith ‘DRAFT – date.’ If more thanone draft is provided, mark ‘2 NDDRAFT – date.’ Keep either a hardcopy or a PDF copy of each draftthat is released. These become partof your work file (as required under4.2.9 with Comments 5.9 – withparticular attention to 5.9.4 and5.9.6). Never sign a draft report.Providing a draft report is abusiness decision that allowsthe client to contribute to and reviewthe report before it is finalized. Itshould be clear to the client whenthe draft is delivered that, althoughwording or facts may be open fordiscussion, values are not.When dealing with ‘drafts,’ takingsome of these precautionary stepsshould minimize the chances of acomplaint being submitted to theAppraisal Institute of Canada forinvestigation, with the referencedreport as evidence.Investigating CommitteeDavid Gabruch, AACI, P. App– ChairDeana Halladay, CRASheldon Rajeski, AACI, P. AppMichael Lee, AACI, P. AppDel Stebner, CRATrent Gelmici, AACI, P. AppMike Schulkowsky, AACI, P. AppDoyle Childs, AACI, P. AppStan Jugovic, AACI, P. AppDarell Thorvaldson, AACI, P. AppJohn Hutchinson, AACI, P. App,Special AdvisorGreg Wilkinson, AACI, P. App,Special InvestigatorTo contact this committee email:investigating@aicanada.caC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 29

P r o f e s s i o n a lQ u a l i f i c a t i o n sa n d c o m p e t e n c yB y B r a d B r e w s t e r , A A C I , P. A p pM e m b e r , P r o f e s s i o n a l Q u a l i f i c a t i o n sa n d C o m p e t e n c y C o m m i t t e eBank appraiser lists30C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e nhe Appraisal Institute ofCanada (AIC) has workedpersistently over the pasttwo decades to increasethe professionalism of its members.As members of the profession, weall have profited from the sometimesdifficult, but nevertheless beneficialprocess of increased educationaland applied experience requirementsnecessary to obtain and maintain ourdesignated member status.The CRA and AACI designations arewell recognized nationally, and most,if not all, major (national) users of ourservices appreciate and understandthat the members using these designationsare well trained, and haveachieved a high level of education andapplied experience necessary to begranted the use of the designations.The marketing initiative that is underwaynationally will further enhance thepublic perception of our members andthe skills we have to offer.Other professions have alsoincreased the educational requirementsof their members. I am suremost of us would agree that (forexample) the skills and abilities ofmembers of the accounting industryare much more diversified andenhanced from those of, say, 20years ago. For these organizations, asfor our own, much of this evolution isdriven by changing and increasinglycomplex economics, as well as otherfactors.It has long been a concern of somemembers of our organization that, incertain cases, national and regionalusers of our services have ‘lists’naming approved service providersof valuation services. Admittedly, thiscan be a cause for concern when, forexample, a client uses our services toget a valuation of a property completedand tells us that the appraisalis going to be used to obtain mortgagefinancing on the property, butthe financial institution has not yetbeen selected. To indicate to such aclient that the finished appraisal maynot be acceptable to certain financialinstitutions can be a source of angstfor sure, and may even raise questionsabout the credentials of theindividual completing the work.As our clients andthe public begin tobetter understand thebreadth and depth ofour experience andeducation, they willincreasingly trust theservices of our memberson a broad basis.However, it remains the right of acustomer or user of our services toobtain professional services from individualsthey have specifically selected.I do not think most of us would seriouslyquestion the credentials of anaccountant with a CA or some otherprofessional accounting designation.We trust the organizations towhich such individuals belong to grantdesignations only to those who havecompleted the necessary requirements.However, we retain the rightto base the reasons for our selectionsof professional service providers on avariety of factors, including a personalrelationship, referral from others weknow, or even, in some cases, theprice of their services.We are aware that there are storiesof individuals within our own organizationwho have provided less thanexemplary service to clients. Whetherwe want to admit it or not, this hascontributed to the creation of ‘banklists.’ In general, to be approved forsuch a list, an individual must submita number of samples of his or herwork, agree to certain requirementsof the financial institution for valuations(always within the parameters ofCUSPAP, of course), and form somesort of dialogue or relationship withthe client to discuss completed workwhen necessary. Is this an unreasonablerequirement?As an organization, we need tocontinue to support the AppraisalInstitute of Canada in its current,ongoing marketing initiative. As ourclients and the public begin to betterunderstand the breadth and depth ofour experience and education, theywill increasingly trust the services ofour members on a broad basis.Professional Qualificationsand Competency CommitteeAnna Meckling, AACI, P. App– ChairSteve Kelly, AACI, P. AppBrad Brewster, AACI, P. AppRoland Mayr, AACI, P. AppRobert Tipple, AACI, P. AppSuzanne Teal, Executive Director,AB AICTo contact this committee email:pqcc@aicanada.ca

P r o f e s s i o n a la f f a i r sB y G o r d o n J . T o m i u k , A A C I , P. A p pC h a i r , P r o f e s s i o n a l A f f a i r sC o o r d i n a t i n g C o m m i t t e eContinuous improvementis good for the organizationand for membershis is not anotherarticle about thetechnicalities of theContinuing ProfessionalDevelopment (CPD) program, butrather one that addresses thelearning process or continuousimprovement. The ProfessionalAffairs Coordinating Committee(PACC) objective is the ongoingreview of the ProfessionalPractice Process to establishwhat is working and what mightneed improvement. The conceptof continuous learning or lifelonglearning is the foundationfor AIC’s CPD program, whichacknowledges the imperative oftoday’s marketplace where allprofessionals are expected tomaintain professional competencythrough systematic continuingprofessional development.PACC is the mechanismwhereby AIC continuouslyimproves upon its own programsand the professional practiceprocess. PACC listens to adviceand recommendations from thechairs of the professional practicecommittees, with a view tofinding effective and cost efficientprocesses.To be sure, PACC is alsocontinuously reviewing theimplementation of the Regulations’amendments to ensure thatthey are being implemented in amanner consistent with the intentof the national policy. A recentexample was the clarificationin the Regulations regarding‘Suspension,’ in that it could beinterpreted as either a suspensionof designation and/or suspensionof membership in the AIC.The concept ofcontinuous learningor life-long learningis the foundation forAIC’s CPD program.However, this does not meanthat PACC deals only with theimprovement of the professionalpractice process. Sometimes,it may be that input suggests acommon theme has arisen whichwarrants clarifying amendments tothe Canadian Uniform Standardsof Professional Appraisal Practice(CUSPAP). The committee chairsbring their unique perspective oncomplaints to the table, commonissues are discussed, and theyare referred to an appropriatecommittee for follow-on action.New initiatives are alsoconsidered. For example, atthe most recent meeting, PACCdiscussed the concept of peerreview and how it might beadopted for use in the professionalpractice process. Peer review hasbeen an option available to theCounsellor Professional Practiceand the Investigating Committee;however, there has not been anational peer review process inplace for referring complaints thatemerge from the professionalpractice process. PACC hasendorsed the concept and wouldlook forward to implementing aprofessional practice peer reviewprogram.Professional AffairsCoordinating CommitteeGordon Tomiuk, AACI, P. App,AIC President – ChairPeter Lawrek, AACI, P. App –Chair of Adjudicating CommitteeHal Love, AACI, P. App – Chair ofInsurance Advisory CommitteeDavid Gabruch, AACI, P. App –Chair of Investigating CommitteeCharles Abromaitis, AACI, P. App– Chair of Appeal CommitteeRay Bower, AACI, P. App – Chairof Standards CommitteeTo contact this committee email:professionalaffairs@aicanada.caC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 31

F r o m t h eC o u n s e l l o r ’ sD e s kB y R o b e r t P a t c h e t t , L L . B , C D ,A I C C o u n s e l l o r ,P r o f e s s i o n a l P r a c t i c eConflict of obligationsppraisal standards speakto conflicts in many ways.A conflict of interest isaddressed in Ethics Rule4.2.11, which, in essence, sets outthat any real or perceived conflictmust be declared and pre-approvalof a client obtained before youproceed. It may still be necessaryfor the appraiser to decline theassignment for other reasons thatarise out of the conflict of interestand a careful review of businesspractices should be undertakenin such circumstances. A conflictof obligation can also arise. ThePractice Notes at 12.8.5 set outsome of these circumstances.The purpose of this article isto discuss a more complicatedexample of a conflict of obligation.Let’s begin by assuming that youare a member in good standingwith the Appraisal Institute ofCanada (AIC), but that you arealso a member in good standingwith another like-minded appraisalorganization. There are manysuch groups including assessmentassociations, OEAQ in Quebec,agrology professions, or even anAmerican appraisal association.Much like AIC, each of theseother professional bodies wouldhave its own set of professionalstandards, bylaws and regulationsthat have become widelyrecognized and accepted by clientslenders, government bodies,and the courts, all of whom relyon individuals holding thoseprofessional designations.A most complicated conflictof obligation arises routinely outof these scenarios when dual32C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e nmembership is involved. At theoutset, you have two sets ofprofessional standards and rulesto which you must adhere whenpreparing reports. Writing in Volume50, Book 4 of the CanadianAppraiser (http://www.aicanada.ca/e/pdfs/Can _ App _ Vol _ 50 _ Bk _4 _ 14.pdf), Allan Beatty, AACI, P.App describes how the CanadianUniform Standards of ProfessionalAppraisal Practice (CUSPAP) willThere is no AIC‘hat’ to take offwhile you adhere toanother professionalassociation’srequirements.likely get you 90% towardssatisfying your client’srequirements, and that theremainder is about adding in whatis required by the other professionalstandards. Thus, it may be relativelysimple to resolve any disparityin the requirements of the twoprofessional bodies.Remember that appraisalstandards are minimum standardsand that exceeding these standardsis reasonable and occurs inmany appraisal reports, includingresidential appraisals.The problem becomes morecomplicated when you are askedby your client to complete somethingto a professional standardother than CUSPAP. As a memberof AIC, you have pledged to abideby AIC bylaws, regulations andstandards. Therefore, by yourpledge, there is no AIC ‘hat’ to takeoff while you adhere to anotherprofessional association’s requirements.You remain obliged toadhere to CUSPAP, and, as a professional,the onus rests with youto do so. This is the very least thatyour clients should expect fromyou and a very important aspectof professionalism that you shouldconvey to your client’s when theyinnocently ask that you disregardyour professional standards.CUSPAP obliges an appraiserto identify his or her membershipstatus in a report, and to certifycompliance with CUSPAP. Anappraiser is also obliged to setout when a report or parts thereofare not covered under an Errorsand Omissions insurance policy.Therefore, it is reasonable topresume that failure to do sowould be a breach of the CUSPAPethics.Finally, it may be that youwill have to choose betweenmembership in AIC and continuedadherence with AIC bylaws,regulations and CUSPAP, andmembership in another associationin order to remain professional andavoid the conflict of obligationsthat might arise from multiplememberships in like-mindedappraisal associations.

Critical datesThe following dates are provided as a reminder to AICmembers of critical dates throughout the year pertainingto CPD credits, dues and insurance obligations.Week ofNovember 12December 31July 31, 2008MEMBER DISCIPLINEDTHE APPRAISAL INSTITUTE OF CANADA advises that Mr.David G. Marshall, CRA of Grand Forks, BC, has been found incontravention of the Institute’s Code of Ethics and Standardsof Professional Practice. Sections contravened are:Canadian Uniform Standards ofProfessional Appraisal Practice (2002 Edition):Ethics Standard Rule: 1, 2, 4, 6, 9 and 13.The member, a designated CRA, completed an appraisalassignment on a commercial property without having had theappraisal report reviewed and counter-signed by an AACI. Asa result, the member has negated the mandatory insurancecoverage, has mislead the reader of the report by giving theimpression of professional qualifications that are not possessed,and has undertaken an assignment lacking the necessarycompetence.As a result of this conduct, Mr. David G. Marshall, CRA,has been given the discipline of Censure and education. Also,pursuant to the Consolidated Regulations of the AppraisalInstitute of Canada, costs have been levied.i n m e m o r i a mhe following membersof the Appraisal Institute ofCanada have passed away.On behalf of everyone connectedwith the Instituteand the profession, weextend our sincerest sympathiesto their families,friends and associates.Les membres suivantsde l’Institut canadien desévaluateurs sont décédés.Au nom de tous ceux quioeuvrent de près ou deloin au sein de l’Institutet de la profession, nousexprimons nos plussincères condoléancesà leurs familles, amis etassociés.Insurance Levy billings mailedto members.Insurance Levy payments due to SCMAdjusters Canada Ltd. (204) 985-1775.Annette Ethier [aethier@scm.ca]Candidates’ first deadline to report courseJohn Warren, AACI, P. AppNanaimo, BCA. George Oikawa,AACI, P. AppVancouver, BCJames Perry, AACI, P. AppSaskatoon, SKWilliam H. Mather,AACI, P. AppBurlington, ONEric Windeler, AACI, P. AppOakville, ONMichel Bourassa,AACI, P. AppMontreal, QCGuy Deslauriers, CRALachine, QCMarcus O’Malley,Candidate, Richmond,New Zealand2007 Jack WarrenScholarship recipientsJack Warren Education Trust Scholarshipsare available to individuals from acrossCanada pursuing careers in real estateappraisal. Congratulations go to TylerBeatty, of Kelowna, BC; Melissa Blais,of North Saanich, BC; Stephen Cullis,of Kamloops, BC; and Henry Wang, ofSurrey, BC; who were selected by the TrustCommittee as this year’s recipients of theJack Warren Education Trust Scholarship.Previous recipients include:2006 Daniel Shields, Sault St. Marie,Ontario2006 Dustin Lamoureux, Victoria, BC2006 Gordon French, Vernon, BC2006 Karen Taber, North Vancouver, BC2006 April Green, Vancouver, BC2005 Hlynn Kenny, St. John’s,Newfoundland2005 Charlotte Ciok, Vancouver, BC2005 Anthony Plumtree, Abbotsford, BCCongratulations also go to SamanthaSawyer, BC and Laina Chwelos, Albertawho won a free national conferenceregistration. The free registrations wererandomly drawn from the names of all pastJack Warren Education Trust recipients.The draw is made each spring and theindividuals are notified so that travelarrangements, if necessary, may be madein plenty of time.• All winners must be current members ofthe Appraisal Institute of Canada.• This prize does not include transportationor accommodation to/from/at theconference.• Winning conference registrations arefor the Jack Warren Educational Trustrecipient use only and are for the currentyear’s conference. They may not betransferred to another individual ordelayed to a future conference.• The registration fee will be reimbursedfollowing the conference uponconfirmation of attendance.For more information or to obtain anofficial application form, please contactthe British Columbia Association of theAppraisal Institute of Canada, #845- 1200 West 73rd Avenue, Vancouver,BC, (604) 266-8287, or visit the BCAssociation Appraisal Institute of Canadawebsite www.appraisal.bc.ca, click onpublications, brochures and the JackWarren Educational Trust.C a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 33

p o s t G r a d u a t e c e r t i f i c a t e i n v a l u a t i o nPGCV grads enhancetheir career opportunitiesn 2003, the Appraisal Institute of Canada (AIC),with its education partner, the Real Estate Division,Sauder School of Business, University of BritishColumbia, established the UBC Post-GraduateCertificate in Real Property Valuation (PGCV) leading tothe AIC’s highest level of professional accreditation, designationas an Accredited Appraiser Canadian Institute(AACI). This program presents a unique opportunity forgraduates of recognized Canadian business/commercedegree programs to earn a prestigious post-graduatecertificate in real property valuation, while fulfilling theeducational requirements for designation by AIC.For more information on admission and requirementsfor the UBC/AIC post-graduate certificate in Real PropertyValuation, visit UBC’s web site at www.sauder.ubc.ca/AM/Template.cfm?Section=Real _ Estate _ DivisionIn 2006, we had 27 graduates of the PGCVprogram. This year we congratulate 21 additionalgraduates on their achievements:David Jonathan Bassal, QuebecSteve Blacklock, British ColumbiaBlaise Clements, SaskatchewanDon Edey, OntarioShey Ergil, AlbertaKari Gage, British ColumbiaSara Highsted,Newfoundland and LabradorMelody Ming Yan Hui, British ColumbiaJanelle Kochan, AlbertaYen-Mei Li, OntarioTodd W. C. MacDonald,Prince Edward IslandBasil Papas, SaskatchewanLi Ming Qin, QuebecGuy Robertson, British ColumbiaErin D. Smith, British ColumbiaMichael Spatharakis, British ColumbiaStephanie U. Tong, British ColumbiaTerence Kevin Mar Tooley,SaskatchewanJason Tucnik, AlbertaDave Weber, AlbertaJulianne Wright, OntarioHere are some comments from our 2007 graduatesWhat prompted you to pursue the PGCV?In September, 2002, I accepted a position withthe Province of Prince Edward Island as an AssessmentIntern. Accepting the position meant that Iwould be obligated to obtain my CRA designationwithin a certain time frame. Already having a BBA,together with the announcement in 2003 that theAIC and UBC Real Estate Division established thePGCV program, made the decision an easy one.– Todd MacDonaldMy employer asked me if I wanted to take over hisbusiness when he retired.– Erin SmithNow that you have completed the program, doyou feel it was a good decision for your career inthe property industry?Yes. The courses that are included in the programare very focused and relevant to my career, especiallywith the opportunity to select two electives.– Dave WeberAs a PGCV graduate, I feel it was an excellentcareer decision to obtain the AACI designation, asit has and will continue to open doors in both thepublic and private sector.– Todd MacDonaldWould you recommend this program to other businessgraduates?Yes. If a person is interested in pursuing a careerin the property industry. It is a challenging programand provides a good depth of theory that can beapplied in the industry.– Dave WeberI believe the AACI designation is becoming morewidely recognized and valued. The process involvedin pursuing an AACI has been made less dauntingthrough the introduction of the PGCV program.– Julianne Wright34C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

Do you feel that adding the PGCV to yourprofessional credentials has enhanced yourcareer opportunities?Definitely. Completing the PGCV program wasinstrumental in achieving the status I now hold inthe workplace.– Erin SmithYes. I started the program shortly after becomingemployed at an appraisal firm. The coursematerial was, in large part, relevant to the realestate appraisal industry, and did help me gainsome background knowledge of the industry thatI may not have learned otherwise. The PGCVprogram has also helped me to achieve my AACIdesignation in a much shorter timeframe fromwhat was the traditional route, which is of interestto employers.– Julianne WrightAre there any other comments concerning this programthat you would like to share with the Appraisal Instituteor prospective PGCV students?The AIC and the UBC Real Estate Division have formed agreat team and have created an atmosphere which enablesthose interested in the Real Estate/Property industry tobroaden their knowledge base and, at the same time, makethemselves more attractive to potential employers.– Todd MacDonaldThis is a very straight forward program that complementsthe mentoring you receive while completing your candidacy;this approach is streamlined and can be completed in a minimalamount of time allowing you to get to work faster.– Erin SmithCorrespondence courses are not what they used to be. Theonline capabilities enhance the overall learning experience. Asa UBC student enrolled in the PGCV program, I was able tochat to fellow classmates and discuss assignments, submitassignments, receive marks, and ask my tutor questions. Theprocess is no longer as isolating as it once was.– Julianne WrightC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 35

AIC designations granted / Désignations obtenues de l’ICEThe Appraisal Institute of Canada (AIC), together with the provincial associations and the provincial bodies affiliated with theAIC, commend the following members who completed the rigorous requirements for accreditation as a designated memberof the AIC during the period July 14 to October 15, 2007:L’Institut canadien des évaluateurs (ICE), en collaboration avec les associations provinciales et les organismes provinciauxaffiliés à l’ICE, félicitent les membres suivants qui ont complété le programme rigoureux d’accréditation à titre de membredésigné de l’ICE durant la période du 14 juillet au 15 octobre 2007:AACI, P. AppAccredited Appraiser Canadian InstituteWe welcome and congratulate these individuals as fullyaccredited members of the Institute through the grantingof their AACI, P. App designation.Accueillons et félicitons comme membres pleinementaccrédités de l’Institut et leur accordons avec fierté ladésignation AACI, P. App.British ColumbiaBrent McLarenEric PanSaskatchewanBasil PapaconstantinouOntarioDavid H. ScottNorthWestTerritoriesSheila MalouinCRACanadian Residential AppraiserThese members are congratulated on the successfulcompletion of the CRA designation requirements.Nous félicitons ces membres pour avoir complété avecsuccès le programme menant à la désignation CRA.AlbertaRichard W.B. McIntyreBritish ColumbiaRichard JansenEarl JoostemaDouglas B. StrachanOntarioKim LD FraserLiette L. LafranceStephen T. OttoQuebecSylvain LacasseAlain LefebvreRichard SchoeneichPatrick SimardCandidates / StagiairesAIC welcomed the following new Candidate members during the period July 14 to October 15, 2007:L’ICE souhaite la bienvenue aux personnes suivantes qui ont joint les rangs des membres stagiaires durant lapériode du 14 juillet au 15 octobre 2007 :AlbertaBrent A. BothAlan CahoonKevin HaldaneClaude Marie LemieuxJarret Thomas MoisanAdam Arthur RobitailleBrady Cole SullivanBritish ColumbiaGary D. ArmstrongSuzanne P. ClarkeJeffrey David DickenNeil EggieMarlon R.A. EstevezCraig D. HennigarShari L. JablonskiAlex D.L. LamTyra LuckhurstJonathan David MatthewsManitobaJason M. SchellenbergNova ScotiaDana CorbinDerrick J. HinesJohn Patrick NadinOntarioMalka G. AdlersteinPhilippe El-ChamiAaron HarlangRyan Alan HopperPhilip M.T. LeungGlenn MarianoDavid B. PressDaniel J. ShieldsMichael David WhiteheadPrince Edward IslandJ. Dean MacKinnonQuebecEric JurkschatSaskatchewanRichard P. MarleauStudents / ÉtudiantsThis new category of membership was implemented January 1, 2007 and now serves as the first step on the path todesignation for those completing their requirements for Candidate membership. Students considering the appraisalprofession as a career option are also welcomed to this new category of membership.Cette nouvelle catégorie de membre entrait en vigueur le 1er janvier 2007 et constitue la première étape sur la voie dela désignation pour ceux qui s’affairent à compléter les exigences de la catégorie de membre stagiaire. Les étudiants quicontemplent une carrière comme évaluateur professionnel sont bienvenus à joindre cette nouvelle catégorie de membre.British ColumbiaShannon L. HewittAlexis M. LaBonteJeff W. LougheedCarl James MayManitobaAaron L. DeGrootJoseph R. SjoblomOntarioTyrone De Nobriga36C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

Advice to authorsFrom the Editorial Boardriting a paper for a professional or trade journalcan be intimidating. Will my peers and others seemy paper as relevant, well written, and with clearmessages? What expectations or standards for publicationwill I need to meet? Who chooses the articles forpublication? Will I receive assistance in writing and editingmy paper? In this article, we answer the most commonquestions facing potential authors.Every AIC member is a potential author. Our goal is toencourage and support members in sharing their valuationexperience and expertise through articles publishedin the Canadian Appraiser. When you share your knowledgewith your colleagues across Canada, you have contributedto the body of valuation knowledge and enhancedour profession. Clients and other stakeholders can seethe value we place on information sharing and continuouslearning.I have an idea for an article, but I do not want toinvest a huge amount of time in writing if it will not beaccepted for publication. What is my first step?Send a brief outline of proposed paper to Mary-JaneErickson [maryjanee@aicanada.ca]. Mary-Jane willcirculate your idea to the Canadian Appraiser EditorialBoard. We will tell you if your concept has been recentlycovered or if it is likely to appeal to only a small numberof members. We will also suggest changes to the outlinethat will broaden the appeal of the article, if necessary,and provide a target date for publication of the article.What type of assistance is available to authors?Once an article idea (outline) is accepted for futurepublication, editorial assistance will be provided toauthors, either through our Communications staff or ourmagazine publishers, Craig Kelman & Associates Ltd. Keepin mind that the editorial process, which relies on blindpeer review, involves flexibility on everyone’s part; authorsneed to be prepared to have their work edited for style,content, and length.Let’s assume you accept my article for publication.What’s next?We will provide you with a target date for publicationin the Canadian Appraiser. If we cannot accept yourproposal, we will provide an explanation.The Canadian Appraiser is published on a quarterlybasis. This publication schedule, along with the magazinebudget, places limitations on the extent and timing ofmember content that can be included in any issue. Theremay be a significant delay between the date an article isaccepted for publication and printing. We will try to giveauthors realistic timeframes and keep you in the loop.Do I need to meet professional standardsfor technical writing?We do not expect authors to write at theacademic journal level or compete with GillerPrize candidates. However, keep in mind that,when you draw conclusions or express opinions inyour article, the readers will generally expect a factpattern to support your findings. The support maybe through a case study, documentary research,interviews, or other research you have conducted.Writing a valuation article is quite similar to writing anappraisal report, identify the purpose and goal, state ahypothesis, conduct research, and reach a conclusion.Writing in an active rather than passive style will makeyour paper more interesting. Think about the articlesthat have captured your interest and those which areboring or mind-numbing.A good source for technical or professional writingis the Canadian Style Guide. http://www.fedpubs.com/subject/commun/cdnstyl.htm. As well, thereare many free online resources. Universities aregreat sources for writing resources. Here are a fewrecommendations:• University of Victoria: http://web.uvic.ca/wguide/• University of British Columbia: http://www.writingcentre.ubc.ca/online _ resources.html• University of Toronto Writing Lab: http://www.ecf.toronto.edu/~writing/resources.htmFor more information, please feel free to contactthe Canadian Appraiser Editorial Committee, throughMary-Jane Erickson.In our next article, we will include some writing tipsto help you gain and keep the reader’s attention.C a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 37

Being prepared forunexpectedlife changes(and potentially devastating)“Bad things always happen tosomeone else.” If that phrase soundsfamiliar, it is because we all say it…and, for the most part, we believe it.But, deep down, we also know thatthings can and often do happen whenthey are least expected…even to us.Unfortunately, many of us are not as preparedas we could or should be for those unexpectedoccurrences that can literally alter our entire lives…things like a family crisis, an accident or a medicalcondition such as a heart attack or stroke that canhave long-lasting physical, mental, emotional andfinancial implications. Although individuals workingin government or in large corporations must alsodeal with these situations should they ever arise,independent appraisers working in a private practice,

“If you have plans regarding what you want to achieve in your life, bothpersonally and professionally, you must also have plans for effectively dealingwith something as drastic as an accident, heart attack or stroke.”particularly those operating aloneor within the context of a smallercompany, and not having accessto large group benefit plans, musttake extra measures in order tolessen the impact. If they do not,such occurrences can be evenmore financially devastating forthem personally, for their familiesand for their companies. The goodnews is that there are steps thatcan be taken in order to be betterprepared.“Something like a stroke is notlike a cold or a broken leg that getsbetter and goes away…it can bepermanent and have far-reaching,life-changing implications,” saysAppraisal Institute of Canada (AIC)past-president Keith Goodwin,AACI, P. App, Fellow, who speaksfrom personal experience havinghad such a debilitating stroke inApril of 2004.Keith is one of three partnersin the firm Appraisals NorthwestLtd. located in Terrace, BritishColumbia. Unfortunately, due to hisstroke, he is now a legal partner,not a working partner. He has beenunable to work since his stroke; hewill not be returning to regular work;and he is now officially designatedas a ‘permanently disabled person’by the Government of Canada andits Canada Pension Plan.According to Keith, “The strokeliterally forced me into retirement,which presents an entirely differentset of circumstances than doesretiring voluntarily. Our family hashad to use savings and RSPs tosupplement our daily living needs;my wife, who was looking to reduceher workload and make otherlifestyle changes when my strokeoccurred, has had to re-establishher teaching credentials and returnto a part-time teaching career;and, while we are managing tomeet the costs of day-to-day living,we are no longer in a position tobe building any kind of reserves forthe future. Fortunately, I had beenworking for many years and hadmanaged to build a bit of a nestegg. If something like this were tohappen to a younger person, withless years in the workforce, thereis a good chance that savingswould not have grown to the pointwhere it could provide much of asafety net. As well, that individualmay not even be eligible for theCanada Pension Plan.”“It is absolutelycritical that you fullyunderstand every detailof the insurance policy,including the specificwording andits implications.”As for the company that hehelped establish and build, Keithreflects on such unplanned issuesas the increased workload thateach of his partners had to takeon, the extra support staff that hadto be hired, the adaptations andnew relationships that clients hadto make, and the business growthplans that had to be put on hold.“When someone who was a onethirdcontributor to a company’sbusiness and clientele is suddenlyremoved from the picture, theeffects are enormous. Fortunately,I have partners who did everythingpossible to hold things together,to provide stability and to carry onin the most positive fashion. Forsomeone working alone or whois the main principal in a smallbusiness, it could well mean thedemise of the company.“If you have plans regardingwhat you want to achieve in yourlife, both personally and professionally,you must also have plansfor effectively dealing with somethingas drastic as an accident,heart attack or stroke,” says Keithemphatically. “You certainly cannotanticipate this kind of thing, butyou can take measures to be betterprepared so that the impact is notquite as devastating.”What sorts of precautions canbe taken to lessen the impactof such a life-changing event?Naturally, we would all be wise toestablish RRSP and RESP plansas soon as possible and to makeregular contributions that can beginbuilding resources for needs downthe road. If possible, it is equallyimportant to build some ‘rainy day’savings, since you probably do notwant to deplete longer term retirementor educational funding plansif you can avoid it. Remember aswell that, if you are in the positionof no longer being able to earnmoney, you likely will not be ableto make additional contributions toany RSPs or RESPs, meaning thatwhat you have in the plans at thetime of the accident or illness is asmuch as you will ever have.As for other important measuresyou can take, insurance is the key.According to Keith, “Having basichealth insurance is a must in orderto meet the immediate needsC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 39

“You need to think of every possible scenario…every possible need thatyou, your family and your business might have and then make certain thatyou have the correct types and amounts of insurance to meet those needs.”you might have for ambulance,hospital, drugs and other healthcare required during what I callthe survival period. However, youmust also secure insurance for thelong term that will provide whatyou need if the absolute worstwere to happen.”Keith also stresses that simplypurchasing the insurance is notenough. “It is absolutely criticalthat you fully understand everydetail of the insurance policy,including the specific wordingand its implications,” he says.“For example, short- and longtermdisability and ‘Return toWork’ terminology should bestructured in such a way thatyour return to work is based onyour educational and professionalstandards. Otherwise, you mayfind that the insurance companyexpects you to return to workas a greeter in a retail store.Will the money paid to you bebased on your most recent year’searnings prior to the accident orillness or will it be determined inanother fashion? Will the amountyou receive be enough to meetyour needs? How much of yourprescription drugs will be coveredand for how long? What are theincome tax implications relativeto the payments you receive? Forexample, if you personally paidthe premiums on your policy, thenany payments you receive for thefirst two years are not taxable.However, if the company paid thepremiums, then the paymentsto you will be subject to tax.When the insurance companyshifts all or part of your paymentresponsibility to CPP, then thatmoney will be taxed. There are40C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e nmany, many issues that have to beunderstood.“You need to think of everypossible scenario…every possibleneed that you, your family andyour business might have andthen make certain that you havethe correct types and amounts ofinsurance to meet those needs.There are no shortcuts. And if youdon’t take care of these mattersand pay attention to every singledetail, no one else will,” says Keith.“You can also increaseyour odds of neverbeing in such asituation in the firstplace by maintaininga positive life/workbalance.”While stressing the importanceof savings, insurance and duediligence regarding what is coveredby insurance and what is not,Keith is also quick to point outthat you can also increase yourodds of never being in such asituation in the first place bymaintaining a positive life/workbalance. That means havingregular health checks for bloodpressure, etc., eating well, beingactive, making time for personaland family interests away fromthe workplace, and surroundingyourself with a strong supportnetwork that includes family,friends and business associates.“Reflecting on my situation, it isevident that I had allowed myselfto get out of balance…to focusfar too much attention on work atthe expense of everything else.Although there is still no guaranteethat an accident or illness won’thappen, an ounce of prevention iscertainly worth a pound of cure. Itall boils down to prioritizing whatwe do in our lives and to makingthe right choices for our ultimatewell being.”As for his support network, Keithis appreciative of everyone thathas rallied around him throughoutthe past three years. “Whensomething like this happens,I believe there is a three-stepprocess involving survival, recoveryand then refocusing your life, whichis where I am today. My wife andfamily, people in the health caresystem, my business partners, myprofessional colleagues and theAppraisal Institute of Canada havebeen there for me every step of theway. Ongoing contact with peopleis vitally important and I have beenvery fortunate in that regard.”‘Fortunate’ is an interesting wordchoice for Keith, when you considerthe impact that a stroke has hadon his life. But, it is a word thatspeaks volumes about the man.And, in light of the personal, lifechangingexperience he has had,other words he uses such as beingprepared for the worst, takingcharge of your own situation, fullyunderstanding what you are gettinginto, and maintaining balancein your life, all come together toprovide sound advice that is wellworth considering and acting upon.Editor’s note: Although itis totally on Keith’s terms, hecontinues to do limited volunteerwork.

Can appraisers adapt toclimate change?By John Peebles, AACI, P. Appn February 2, 2007, theUnited Nations-sponsoredIntergovernmental Panelon Climate Change (IPCC) releasedits fourth assessment report, concludingthat climate change is“unequivocal” and that human activityis the main driver of this warming,asserting with near certainty– more than 90% confidence – thatcarbon dioxide and other heat-trappinggreenhouse gases from humanactivities have been the main causesof warming since 1950. Whetheryou agree with IPCC or not, climatechange is front page news. Ourpolitical and business leaders areincreasingly mirroring the publicconcern over climate change with‘green’ economic strategies. 1Evidence that the valuation communityis embracing the green megatrendis the Vancouver Accord, signedby international industry representativesand valuation professionals onMarch 2, 2007, at the VancouverValuation Summit. Vancouver Accordgoals are to:• commit the industry to a review ofthe relationship between sustainabilityand standards of valuation;• promote awareness of and competencyin the appropriate methodsof addressing sustainability in valuationsand worth appraisals; and• work with those inside and out ofthe valuation industry to educateand inform about sustainabilityand its relationship to value andworth.The objective here is to focuson one of these goals, increasingappraiser awareness of the relationshipbetween green buildings andmarket value. Why? Green buildingdesign is moving from the domainof institutional and special purposeproperties to mainstream applicationsin industrial, retail and officecommercial markets. Evidence ofthis trend can be found in recentannouncements for new green designoffice and mixed-use projects in majorCanadian centres. 2 Appraisers need tounderstand the design, operation andeconomics of green buildings to understandhow markets will react to theseproperties.Our continuing green education willlikely centre on the following questions:• How do we define green or sustainablebuildings? What propertyattributes will alert us to the differencesbetween green and similarconventional buildings?• What are the economics of greenbuildings, e.g., initial constructionand life-cycle costs, annualrevenue-operating expenses, andvacancy and market capitalizationrates?• Is the slogan ‘green value’ fact ormarketing hype? How are marketforces responding to green buildings?• Should the appraisal professionaccount for the potential intangiblevalues of green buildings, such asincreased tenant satisfaction andproductivity, and social corporateresponsibility?Lower operating expenses, specificallyfor energy consumption, areoften promoted as a benefit of greenbuildings. This article relies on a literaturereview and property case studyto examine two questions aboutgreen building operating expenses.(1) Do green buildings, on average,have lower operating expenses(e.g., energy costs)?(2) If this expense advantage exists,is it reflected in market value?The Regional Municipality of Niagara recently expanded its Campbell East, NiagaraRegion headquarters in Thorold, Ontario and incorporated such energy efficientfeatures as high thermal resistance in the walls and roof, high performance windows,efficient condensing boilers, occupancy sensors for lighting efficiency, and low flowwater fixtures, among others. (Photo: Enermodal Engineering Ltd.) Photo courtesy ofthe Canada Green Building Council www.cagbc.orgC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 41

Defining green buildingsBefore learning whether ‘green is adream,’ a clear definition is neededfor green or sustainable buildings.One approach is to identify greenbuildings through recognized standards.The Green Building RatingSystem (2004), based on LEEDTMCanada NC, 1 is the Canadian standardfor new construction. BOMA 2is promoting its Green CertificationProgram (2003) for existing buildings.Since only 4% of new commercialconstruction iii in Canada hasbeen LEED certified, strict relianceon this standard will likely excludemany new buildings with variousdegrees of green technologies. Theissue is that many developers maybuild or rehabilitate to a level equivalentto green standards, but maynot apply for certification due tothe time and money required. TheBOMA program has broader application,but it is also relatively newand is continuing to build a profilein Canada. ivWhile you cannot rely exclusivelyon standards to identify greenbuildings, it is possible to identifygreen buildings through design,construction and operational practicesthat are consistent with Canadianstandards and other greenbuilding definitions. v These practicesreduce the negative impact on theenvironment through vi• energy efficiency,• use of natural building materials,• conservation of water and othernatural resources,• waste avoidance, re-use and recycling,and• flexible and adaptable spaces.The Villa Angela Sisters building in Chatham, Ontario utilizes a variety of innovations tooptimize energy cost performance by 55% more than the Model National Energy Codefor Buildings and realize energy consumption savings of 51%. (Photo: Jorden and CookArchitects) Photo courtesy of the Canada Green Building Council www.cagbc.orgGreen building economicsA review of published literature ongreen building economics reveals aweight of information on the opportunityto reduce operating costs, butlittle information on positive impactsfor increased building rents andreduced vacancies. Green Buildingsand the Bottom Line (2006), by theBuilding Design and ConstructionNetwork, exemplifies the limited stateof knowledge on green economics.Other documentary sources vii pointto the opportunity to achieve a 30%reduction in operating costs withgreen building design. viii The US EPA(Environmental Protection Agency) hastaken a bolder approach in promotinggreen building economics, statingthat a 30% reduction in energy use(commonly achievable in the averagecommercial office building) can yieldthe equivalent of a 5% increase in NetOperating Income (NOI) and overallasset value. ixThe Canadian experience withgreen buildings parallels the US experience.The BC Ministry of Energy,Mines, and Petroleum Resourcesclaims that energy efficiency upgradescan reduce annual energy costs forcommercial real estate by an averageof 20%. x The Ministry estimatesthat about 70% of the projected costsavings will be associated with energycosts xi related to heating, cooling andlighting. In a related study, the federalgovernment (2005) confirmed thatthe average cost for energy representsabout 30% of the total O&M budgetfor federal office buildings, or about$20/m 2 ($1.85 per ft 2 ). xii Applyingthe 20-30% rule of thumb for possibleenergy savings translates into apotential O&M reduction of $.37-$.55per ft 2 , or an average annual savingsof roughly $15,000-$22,000 for a40,000 ft 2 office building.The literature review supports thenotion that green buildings generallyhave lower energy costs in relation toconventional buildings. 3 However, nodirect evidence was found of the relationshipbetween reduced expensesand market value.Case study detailsThe headquarters (HQ) of the CapitalRegional District 4 (CRD) was selectedfor this case study, since it is one offew recently constructed office buildingsin Victoria, and since the CRDintended the building to embody42C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

sustainability practices. The CRD HQ,a multi-storey class B office building,is located in the City of Victoria downtownprecinct. The building is comprisedof two adjoining buildings withintegrated interior space, constructedin two phases. The first phase, completedin 2004, was a re-developmentof the former Victoria Police Headquartersbuilding on Fisgard Street.In the second phase, the adjoiningproperty was acquired and a newbuilding was completed in 2006. Bothbuildings share some mechanical,electrical and other building systems.Phase I Phase II TotalStoreys 4 6Rentablearea ft 2 26,864 47,574 74,438Table 1: CRD building rentable area(source: Capital Regional District)through exterior solar shading panelsand use of high-performance windowunits with ‘high-e’ and insulationproperties.Interior design: A characteristic ofopen floor plans is the concentrationof enclosed spaces, such as offices,meeting rooms and mechanical-electricalrooms, in the building’s core toallow unimpeded air circulation in themajority of the occupied space. Olderclass B buildings in the downtowncore of Victoria will typically have aconcentration of enclosed officesalong exterior window exposures. TheCRD building has an open floor plandesign with relatively unobstructedaccess of interior space to naturallight and views out. A related benefitof this day-lighting design feature isthe cost savings from reduced lightingrequirements.Lighting design: The CRD buildingfeatures energy efficient ‘task-ambient’lighting (hanging fixtures) whichreflect light to the ceiling for moreeven distribution. These fixtures havephotocell-controlled dimming ballaststo adjust output of fixtures inresponse to daylight. Motion detectorcontrols turn office and cubicle lightson and off based on occupancy,and digital systems controls managelighting during evening and non-peakhours of use.HVAC: Conditioned air is providedthrough an under-floor air distributionsupply. In this system, the raised floorserves as a supply plenum systemversus conventional overhead ductworkassociated with Variable AirVolume systems. Use of this systemreduces construction and renovationcosts, since the costs of installingThe first step in this case studywas to confirm that the CRD HQ metthe general requirements for a greenbuilding, focusing on the first criteria- energy efficiency.The building energy efficient featuresare associated with buildingenvelope design, HVAC, electricalsystems, water supply and buildingcontrols. A brief overview of thesefeatures is provided in the followingsection.Thermal mass: In building construction,thermal mass is the useof building materials to absorb, storeand later release significant amountsof heat. Buildings with thermal masselements benefit through reducedspikes in daily energy use, since themass slows HVAC response time,moderating indoor temperature fluctuations.Another advantage providedby thermal mass is the reduction incost for heating in winter and coolingin summer. Thermal mass is achievedin the CRD building through exposedinside surface concrete slabs andshear walls. In this example, the additionaladvantage of exposing structuralelements was a reduction in thecost to finish the exposed concrete(gypsum or painting not required)and an associated reduction in longtermmaintenance expense for thesesurfaces.Solar shading: The design goalis to maximize winter solar heatgain and minimize excess solar gainduring other seasons. The CRD buildingachieves this performance goalThe BC Cancer Agency Research Centre in Vancouver, BC is predicting annual energysavings of $381,269 as a result of many construction and mechanical innovations.(Photo: Henriquez & Partners Architects) Photo courtesy of the Canada Green BuildingCouncil www.cagbc.orgC a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 43

or moving duct-work are eliminated,and electrical and data services canbe accommodated within the space.The energy advantage of an underfloorsystem is that, when supply airis introduced at the floor level andreturned at the ceiling, natural convectionreduces the energy requiredto distribute the supply air, thusreducing the size of the HVAC unitsand associated energy consumption.xiii Use of a raised floor systemand largely open floor plan alsoreduces the ‘churn’ or constructionand renovation costs resulting fromthe need to re-configure space overtime. Additional energy efficiencyis achieved with optimization of theventilation systems to reduce electricalload, while keeping the buildingpressurized. A related design featurein the CRD building is the provision ofoperable windows to provide naturalventilation when outside conditionspermit. The main intangible benefit ofthese features is the ability to bettercustomize heating and cooling foreach work unit and building zone.The CRD building incorporates anumber of additional sustainabilitymeasures related to water conservation,use of natural materials, andrecycling. For example, water conservationfeatures include low-flowshower heads and toilets, motionsensor faucets, waterless urinals, anda rainwater storage/reuse system toaugment non-potable water supplyrequirements. An analysis of thesefeatures is beyond the scope of thisarticle.Energy savingswith green?To answer the first research question,there was a need to establish typicalbuilding energy costs for similarclass B (BOMA standard) officebuildings in downtown Victoria. Localproperty managers, brokers andthe BC Assessment Authority xiv staffconfirm that the typical range in O&Mexpense 5 for class B office buildingsin Victoria is $6-$7 per ft 2 . Theenergy component (hydro and gas) ofO&M expense for conventional buildingsis estimated by local experts tofall within a range of $1.75-$2.00 perft 2 . This expense range is supportedby the federal government energyestimate of $1.85 per ft 2 , notedearlier.The latest available 6 CRD buildingoperating expense statements (fiscalyear 2006) reveal an energy expenseof $1.26 per ft 2 versus benchmarkenergy expense of $1.75-$2.00 perft 2 of rentable area, representing adifference of $.49-$.74 per ft 2 . Hasthe cited literature demonstrated thepremise that green buildings achievesignificant energy savings in relationto conventional buildings of similarutility? Not conclusively, for a numberof reasons:• Only one year of performance datawas available for the CRD building,7 but, according to local propertymanagers, a three-five yearoperating history is required tounderstand building performance,especially for green building investments.• Extreme climatic variation in anyyear of data (e.g., colder thannormal winter or warmer thantypical summer) will skew energyconsumption numbers.• The energy consumed by officebuildings will be greatly impactedby hours of use, e.g., some privatesector buildings may require moredaily hours of lighting, heating andcooling than institutional buildingssuch as the CRD HQ.• Consistent information required toreliably benchmark performancefor conventional and green buildingsis scarce.• There are many different buildingHVAC systems with consumptionrates for gas and hydro, creatingan issue for performance benchmarking.However, since the energy performanceoutcomes are representativeof the 30% in cited literature, it isassumed that the outcome justifiesan attempt at hypothetical valueanalysis.Do energysavings = green value?The first problem to address was theappropriate method for valuationof the energy savings. Gary Wolff(2006) identified four methods toanalyze the financial benefits of greenbuildings: simple pay back, levelizedcost, relative net present value, andinternal rate of return. xv In the interestof simplicity, there is one methodwhich is well understood by the valuationand investment community, i.e.,net present value (NPV).The biggest difficulty faced inusing NPV was the availability ofreliable information on the constructioncost of the CRD building, versuscosts for a similar building with conventionaldesign (e.g., cost of greenconstruction). To overcome this limitation,the National Research Councilfindings were adopted. These indicatethat the capital costs for constructinga green building are comparable tothat of conventional buildings of thesame type. xvi Additional assumptionswere made for the investment horizon,yield rate, and stability of energyoperating costs over time.Assumptions were made that aconservative energy cost savings of$.45/ft 2 can be achieved with greendesign and construction, and thetotal annual savings for the CRDbuilding would be about $33,500. A10-year investment horizon and 6%yield rate (e.g., real estate investmenttrust yields) were also assumed. Capitalizingthe annual expense savingsover the investment horizon returns apresent value of about $246,500. 844C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n

At this point, you may feel thecase study is more of an academicexercise, given the growing uncertaintyassociated with the assumptions.Can the findings be consideredconclusive? No - a single case studyis not sufficient to draw generalizedconclusions. Keep in mind that thatthe analysis of green value is a newarea of valuation practice and thegoal of this article is to illustrate howone might undertake a value analysisof the ‘green’ premium.SummaryThis article has provided anapproach for identifying green buildings,a simple method for quantifyingthe relationship between operatingexpenses and value, and some areasfor additional research. However,the main goal has been to awakenappraisers to green building trendsand the need to account for theimpact of ‘green’ on value. There aremany additional potential tangibleand intangible aspects to greenbuildings which can be investigated,such as reduced life-cycle cost,improved tenant relations and retention,reduced costs associated withchurn rate for interior space, etc.Are investors looking for this typeof real estate intelligence? In GreenCan be Gold, author David Kozlowski,senior editor of Building OperatingManagement, cites an interview witha prominent Chicago developer stating,“There is not a lot of knowledgeor interest on the part of appraisersto go through all the bother of determiningNOI (net operating income)based on energy savings.” Kozlowskiunderscores the problem of appraisersfalling behind the industry withadditional examples of the importancebrokers, landlords and developersincreasingly place on NOI andenergy cost. The counterpoint is thatthe collective industry understandingof green building economics isso limited in Canada that the marketmay not be ready for ‘due diligence’in green building valuation, especiallysince much of the energy benefitsaccrue to tenants.This article has pointed out anumber of gaps in our knowledge ofgreen building economics. Energizinggreen valuation research to the nextlevel will require partnerships andcollaboration between the appraisaland academic community, as well asreal estate organizations. Whetherinstitutional or fee, residential orcommercial, appraisers shouldrespond to the Vancouver ValuationAccord by:• learning about new building technologies;• staying connected with the evolutionof green building trends andstandards;• monitoring market reactions tothe increasing number of newgreen buildings and buildingsrehabilitated to a green standard;and• increasing awareness of governmentpolicies to encourage andmandate green or sustainabledevelopment.As well, the Appraisal Institute ofCanada is encouraged to supportmore in-depth research on greenvaluation methodologies.End notes:1 Leadership in Energy and EnvironmentalDesign Canada New Construction,Green Building Council.2 Building Owners and Managers Association3 A 2004 BOMA BC study funded bythe Real Estate Foundation of BC,entitled Go Green Phase II Report,recommends that the initial focus forgreen building performance measurementshould be energy efficiencygains due to the complexity of analysisfor other factors such as waterand waste reduction4 The CRD provides a range of servicesfor unincorporated areas, and coordinatedregional and sub-regional inthe Greater Victoria area, such assolid waste disposal, water distribution,regional planning, affordablehousing, and health facility funding.5 Includes utilities (hydro, gas andwater), repairs and maintenance, andinsurance.6 The building is relatively new andbuilt in two phases. Hence, operatingexpenses for 2005 years were notrelevant.7 CRD property management staffnoted that the building systems willrequire further calibration to optimizeperformance.8 For simplicity, it is assumed thatenergy costs and yield rates will bestable over the investment period.References:i Federal Budget 2007. Preserving OurEnvironment and Modernizing HealthCare. http://www.budget.gc.ca/2007/themes/papemhe.htmlii Hume, Christopher (Feb.8, 2007).New Towers Paint the Town Green.Toronto Star. http://www.thestar.com/article/182962iii White, Anne (2007). What are theBarriers to Building Green Buildings?Real Estate News Exchange. http://www.renx.ca/Detailed/1243.htmliv BOMA BC (2005). Go Green PhaseII Report. http://www.greenbuildingsfoundation.org/research/data/BOMA.GGPII.Report.pdf.v Krisandra Guidry. How Green is YourBuilding? An Appraiser’s Guide toSustainable Design, Appraisal Journal,Winter 2004, p.58-61.vi World Commission on Environmentand Development, Our CommonFuture, New York, Oxford UniversityPress, 1987, p.4.vii Green Value: Green buildings, growingasset (2005). http://www.rics.org/NR/rdonlyres/93B20864-E89E-4641-AB11-028387737058/0/GreenValueReport.pdf.viii Kats, Gregory (2003). Green BuildingCosts and Financial Benefits. http://www.cap-e.com/ewebeditpro/items/O59F3481.pdf.ix EPA Energy Star Newsletter (2006Summer). http://www.energystar.gov/ia/business/guidelines/assess _ value/off _ the _ charts _ summer _ 2006.pdf.x Energy Efficiency for the CommercialConstruction and ManagementIndustries (2007).http://www.em.gov.bc.ca/AlternativeEnergy/EnergyEfficiency/energyefficiencypdfs/information_ for/Energy _ Commercial _07.pdf.xii An Architect’s Guide to SustainableDesign of Office Buildings (2005).http://www.pwgsc.gc.ca/realproperty/text/pubs _ archguide/pubs _ archguide_ 4-e.html.xiii Spinazzola, S. (2005). Air DistributionTurned Upside Down. BuildingOperating Management. http://www.facilitiesnet.com/bomarticleemail/BOMarticle111805.html.xiv Personal interviews conducted March1 to March 31, 2007.xv Wolff, G. Beyond Payback: A Comparisonof Financial Methods for Investmentsin Green Buildings, Journalof Green Building. Vol 1(1).(2006).p.82.xvi National Research Council (2005).Green Buildings: Capital and Life-Cycle Costs. http://irc.nrc-cnrc.gc.ca/sbe/greencapital _ e.htmlJohn Peebles, AACI, P. App is aValuation Consultant with D.R.Coell & Associates in Victoria, BC.C a n a d i a nAppraiserE CVolume 51 • book 4 • 2007 valuateura n a d i e n 45

AICABBCONAppraisal Institute of Canada (AIC)Valuation: Just the Tip of the Iceberg2008 Appraisal Institute of Canada AnnualConferenceDelta St. John’s, St. John’s, Newfoundland &LabradorJune 4-7, 2008www.aicanada.ca/e/aboutaic _ events _ con2008.cfmContact: info@aicanada.caAlberta Association (AIC)2008 Spring Conference and AGMFeb 22-23, 2008 – BanffContact: info@appraisal.ab.ca, (403) 207-7892, orwww.appraisal.ab.caBritish Columbia Association (AIC)Contact: Janice O’Brien info@appraisal.bc.ca,(604) 266-8287, or www.appraisal.bc.caOntario Association (AIC)Fee SymposiumFebruary 8-9, 2008 – TorontoTopics:• Everyday Business Negotiations• The Professional Surveyor and the Real EstateAppraiser• Advisory on the Foundation of Wealth - Appraisaland Beyond• Valuing Seniors Health Care Facilities• Advanced Concepts in Title Searching and TitleInsurance• Small Business Workshop• The Smart Way to Goal Setting and PersonalAchievement!• The Appraiser as Gatekeeper: Ensuring LawfulTransactionsAGMApril 12, 2008 – TorontoContact: Lorraine Rigas lrigas@oaaic.on.ca,(416) 695-9333, or www.oaaic.on.caMBNBNLNSPEIQCSKManitoba Association (AIC)Standards SeminarFriday, April, 25-Saturday, April 26, 2008Instructor: Allan Beatty, AACI, P. App, Kelowna, BCVictoria Inn - 1808 Wellington, WinnipegContact: Lynne Smith Dark mbaic@mts.net,(204) 943-1177, or www.aimanitoba.caNew Brunswick Association of Real EstateAppraisersContact: Executive Director nbarea@nb.aibn.com,(506) 450-2016, or www.nbarea.org/main.aspNewfoundland Labrador Association (AIC)Contact: Sherry House nfaic@nl.rogers.com, or(709) 753-7644Nova Scotia Real EstateAppraisers AssociationContact Davida Mackay nsreaa@nsappraisal.ns.ca,(902) 422-4077 or go to www.nsappraisal.ns.ca/Prince Edward Island Association (AIC)AGMApril 17, 2008Contact: Suzanne Pater peiaic@xplornet.com, or(902) 368-335L’Association du Québec del’Institut Canadien des ÉvaluateursContact: Ginette St-Jean aqice@qc.aira.com,(450) 454-0377, or http://www.aqice.ca/Saskatchewan Association (AIC)Contact Marilyn Steranka skaic@sasktel.net,(306) 352-4195 or www.skaic.org/Advertiser Information CentreIf 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.A Bound Corporation Page 5 www.abound.ca 888-622-6863ACI 2, 3, 48 www.appraiserschoice.com 800-234-8727Brian E. McConnell 44 briansavoy@shaw.ca 250-381-4455Business Information Group 27 www.ecologeris.com 887-512-5204Canadian Association of Accredited Mortgage Professionals 21 www.caamp.org 416-385-2333Canadian Resource Valuation Group 29 www.crvg.com 780-424-8856Douglas Cost Guides Inc. 35 www.douglascostguide.com 877-284-0028Notarius 25 www.notarius.com 800-567-6703Personal Home & Auto Group Insurance, The 17 www.thepersonal.com/aicanada 888-476-8737Sauder School of Business 47 www.realestate.ubc.ca 877-775-773346C a n a d i a nAppraiserVolume 51 • book 4 • 2007EvaluateurC a n a d i e n