Book 4 - Appraisal Institute of Canada

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