21 August 2017
We have had several conversations recently with various industry stakeholders and we would like to encourage you to consider the following:
BLENDED SITE ADJUSTMENTS: In recent conversations with the Bank of Montreal, BOM has stated that the blended adjustments for site value are no longer acceptable to them, and they are requesting that adjustments, and the comments associated with them address the specific components that contribute to the adjustment(s).
Please ensure that when completing appraisal assignments for this client, that the site adjustments and comments reflect their requirements.
TENANT OCCUPIED PROPERTIES: The question about the ownership rights being appraised, in tenant occupied properties, keeps coming up. If a property is tenant occupied, then the owner has surrendered part of their ownership rights, (the right to occupy) and therefore no longer has the full bundle of rights (Fee Simple). In such a case, the normal course of action is for the appraiser to consider the LEASED FEE interest of the property, and appraise it as such. This would typically require the use of tenant occupied comparable sales for consideration, etc. HOWEVER some clients (lenders such as BMO) require that the Fee Simple interest in a property be the basis of the appraisal assignment. In such cases, the appraiser is still to indicate that the property is Tenant Occupied, however the ownership rights being appraised are FEE SIMPLE. The appraiser simply needs to include a statement such as: “At the request of the client, the subject property is being valued considering the Fee Simple interest, and the Lease Fee interest in the property is not be addressed in this appraisal assignment.” See USPAP FAQ #217
In recent months, our members have seen an increase in requests from AMC & Lenders, for Stand-Alone Market Rent Reports.
We have been in conversation with some of our members about the format of these reports, and thanks to Mike Chekaluk (DAR-Certified Appraisal Reviewer), of Cityline Appraisals Inc., we now have templates available for use. There are both REPORT-PRO and CLICKFORM templates completed and Mike has graciously agreed to allow our members to use the templates he created. If you have clients that use other formats, you will need to create something for that format.
We want to remind everyone that a Stand-Alone Market Rent report, is an opinion of value, and therefore is an appraisal. The report, as well as your research must comply with the USPAP Standards #1 and #2.
If you have any questions, please contact Rob MacDonald at CNAREA.
Restricted Appraisal Reports
If you are completing the following types of valuation assignments please note that we now have new report formats available for each. You must make your own templates for each of these report formats and the templates must be EXACTLY as indicated.
The new report formats have been added to the course book for course 4.3R and are listed below.
Contact the CEO for any further Information.