Book 1 - Appraisal Institute of Canada

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