Valuation Guidelines

1A1 Guidelines for Appraisal Reporting

Purpose

The purpose of this guideline is to define the valuation requirements for the Federal Government.

1.0 Preface

1.1 The Federal Government makes decisions on the purchase, lease, development, transfer, and expropriation of real property based, in part, on real property appraisals. Real property appraisals used by the Federal Government must therefore meet high standards of documentation, thoroughness and reasoning.

1.2 Provincial, national, and international real estate appraisal organizations have set high professional standards for their members. As a result, Public Services and Procurement Canada (PSPC) consulted with and developed its real property valuation standards to meet the minimum content adopted by the major organizations of professional appraisers. In the preceding context PSPC signed a Memorandum of Understanding with each the Appraisal Institute of Canada (AIC) and l'Ordre des évaluateurs agréés du Québec (OEAQ).

1.3 PSPC Valuation Guidelines for Narrative Appraisal Reports (1B1), Short Narrative Appraisal Reports (1B2), Form Appraisal Reports (1B3) and Update Reports (1B4), are by their design, consistent with the standards required by the AIC and the OEAQ.

1.4 The Appraisal Institute of Canada (AIC) is the most widely accepted national real estate appraisal organization in Canada. Any appraiser who is an accredited member of the AIC must provide appraisal services in compliance with the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP).

1.5 L'Ordre des évaluateurs agréés du Québec (OEAQ) is the principal organization regulating and controlling real estate appraisal in the Province of Quebec, and is responsible for the development and maintenance of highly dependable professional practices and standards. Any appraiser who is an accredited member of the OEAQ must provide appraisal services in compliance with the Professional Code and Code of Ethics, as set out by the OEAQ, as well as with les Normes de pratique professionelle.

1.6 The Uniform Standards of Professional Appraisal Practice (USPAP) is produced and maintained by The Appraisal Foundation in the United States. These standards are for all real and personal property assets and are widely adopted by many appraisal organizations in North America. They form the basis for the standards subsequently adopted by the AIC and OEAQ.

1.7 The International Valuation Standards Committee (IVSC) prepares and maintains a set of comprehensive and robust international standards, named The International Valuation Standards (IVS), to facilitate cross-border transactions involving property and contribute to both domestic and international financial stability.

2.0 Policy

2.1 In addition to adhering to the professional standards outlined by the organization from which the appraiser is a member, he or she must meet the PSPC Policies and Valuation Guidelines outlined in the applicable section when preparing a report for the Federal Government.

2.2 Where appraisal reports are required for real property outside of Canada, the International Valuation Standards will be considered the professional standard for reporting purposes, in addition to the PSPC Policies and Valuation Standards outlined in the applicable guideline.

2.3 All appraisal reports commissioned by PSPC are subject to review for compliance with the Contract for Services, as well as the PSPC Policies and Valuation Guidelines outlined in the applicable section. This must be completed to the satisfaction of the Chief Appraiser or designate.

2.4 Appraisal reports commissioned by others and submitted for review to PSPC will be reviewed for compliance with industry standards and the appraisal's Terms of Reference, if available.

2.5 Preliminary Estimates and Attestations prepared by PSPC employees are not considered to be appraisals that are subject to this same degree of rigor. They are not subject to review by the Chief Appraiser or designate, nor are they subject to any professional standards. They are internal documents, used for planning purposes or in support of business decisions involving transactions that are under Treasury Board's defined value thresholds.

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