CODE OF ETHICS
APPRAISER'S CODE OF ETHICS
(Code of Ethics reproduced with permission from the Canadian Personal Property Appraisers Group)
Most clients are inquiring for an appraiser for the first time in their lives, and probably won't need one again. As a result they are interested in what's involved, e.g. is the appraisal certified or accredited, and what are the costs. Most people like to know up front what fees are involved. This varies according to:
- amount of assets to be appraised
- travel time
- the purpose of the appraisal
- what experience the appraiser has had in the assets they want appraised
- other questions concerning bank loans, insurance coverage, separation or divorce, business partnerships or dissolving partnerships
- the difference in the types of appraisals (fmv, liquidation value, going concern value or combinations etc.)
It is the appraiser's job to set at ease the concerns of the client so there are no surprises, and the appraiser must be totally honest and up front with all these inquiries and earn the trust of the client. This is done with usually a free phone consultation or email, or a combination of both before an agreement is made and prior to inspecting the assets to be appraised by the appraiser. They must know a full and confidential report will be completed for them that will stand the test of excellence so the client can rest assured that the appraiser will meet the highest professional standards as demanded by the organization that renews his/her qualifications annually.
A successful respected appraiser will possess the following qualities:
- Trust
- Integrity -
An appraiser must not:
- suppress facts;
- misrepresent his/her qualifications;
- be influenced by third parties.
- Knowledge -
A professionally qualified appraiser is one who has considerable knowledge and experience in dealing with commonly appraised subject matter. However, unfamiliarity with a given subject matter should not form a barrier between the appraiser and the goods to be appraised. Adequate consultations with those familiar with the subject matter, along with various techniques of price sourcing should provide the appraiser with the necessary knowledge to produce a qualified appraisal. - Professionalism -
An appraiser must practice and maintain the highest professional standards in regard to:
- Confidentiality
- An appraiser must not disclose confidential information obtained from a client, or appraisal results, except to:
- the client and persons authorized by the client;
- third parties as authorized by due process of law;
- a duly authorized professional peer review committee.
- Conduct
- An appraiser must properly identify the question to be addressed and possess the necessary knowledge and experience to complete the assignment competently. Should these conditions not exist at the commencement of the assignment then the appraiser must:
- disclose any lack of knowledge to the client before accepting the assignment;
- take all necessary and/or appropriate steps to competently complete the assignment;
- document the above conditions if they apply in the appraisal report.
- Management
- An appraiser must accept the responsibility for anything that is placed in their care.
- Record keeping
- Adequate records must be kept by the appraiser. This includes written documentation of the entire appraisal process as well as working notes and correspondences. Any relevant consultations used in determining value must also be noted.
- Compensation
- Acceptance of compensation is unethical if contingent upon:
- the reporting of a pre-
determined value without ethically verifying the actual value; - a direction of the client resulting in the attainment of the stipulated amount;
- the amount of value estimate;
- the occurrence of a subsequent event.
- Generally the fee charged by an appraiser should be independent of the value of the report, i.e. the appraisal fee should not be a percentage of the appraised amount. Assessing a fee on a percentage basis may result in increased vulnerability to the appraiser in cases of litigation.
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