Book 4 - Appraisal Institute of Canada

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.