2018 – VOLUME 62 – BOOK 1Entries appear in original language

Are property taxes reflected in a residential building’s market price?

Property taxes in most Canadian municipalities now constitute a significant part of home ownership costs. Normally, in assessment or appraisal theory, it is stated that home values or sales prices drive assessment values, which, in turn, drives the level of property taxes to be paid given various mill rates. But, is it possible that the inverse may exist and...

Professional Practice Matters l Market Rent Reports: Why requests are increasing and what AIC Members must do to mitigate their risk

With the advent of new Office of the Superintendent of Financial Institutions (OSFI) regulations implemented in January 2018, the landscape of the federally regulated lending world has altered. A new minimum qualifying rate, also called a ‘stress test,’ is now required for uninsured mortgages, i.e., those mortgages where the borrower has 20% or more of the value of the...

Market Outlook: Canadian commercial real estate is poised for a tech upgrade in 2018

The past year brought with it considerable political and economic uncertainty for Canada, as many watched the US economy grow under a low inflation environment. Moving into 2018, the Canadian commercial real estate market appears to be capitalizing on opportunity. With supremely competitive markets in Toronto and Vancouver, major pension funds have consistently looked to overseas markets for prime investment...

Legal Matters: Revisiting the fee simple interest

In September 2017, the Appraisal Institute (US) held a Property Rights Symposium to consider issues relating to the valuation of fee simple estates. On December 21, 2017, a document entitled Property Rights Symposium Discussion Paper (Discussion Paper) was prepared to report on the symposium discussions, to identify questions to be addressed and to solicit comment from interested parties. The impetus...

Growth Industry

An appraiser from Colorado talks about how increasing acceptance and legalization of marijuana are changing the real estate landscape ©2017 Reprinted with permission from the Appraisal Institute, Chicago, Illinois. All Rights Reserved. As Canada prepares for the legislation of marijuana, AIC looked to our neighbours to the south for examples of how valuation professionals have adapted in states where similar legislation...

Lack of Strategic Property Tax Planning Leaves Assets at Risk of Underperformance

With the recent upward cycle in the commercial real estate (CRE) market, both property values and property tax disbursements are reaching record highs. As the CRE industry continues to attract capital at record levels, the competition for available assets and expectations for existing asset performance have never been higher. Property tax is the single largest operating expense affecting commercial...

Adaptive re-use of an historic church structure

*Adapted from a presentation made by Giovanni Geremia, maa, oaa, aaa, saa, mraic at the Appraisal Institute of Canada 2016 Annual Conference in Winnipeg “When we build, let us think that we build forever. Let it not be for present delight, nor for present use alone. Let it be such work as our descendants will thank us for; and let...

Rent Review Clauses: Market-Based or Not?

In a rent review under a lease, the lease must be read to determine the basis upon which the landlord and the tenant have agreed rent will be reset. Is the rent to be based on the market or upon other criteria established by the parties? To decide the question, principles of contract interpretation must be applied. General interpretation principles The...

Professional Practice Matters – Expert or arbitrator?

(Part of this article is reproduced with permission from The Advocate. ’A View From the Centre’ (2017) 75 Advocate  555) As appraisers, we are often retained to provide independent expert opinions on real estate valuation matters. In the adversarial process of litigation or arbitration, we are typically retained by one of the parties to a dispute; the expert report then...

Duty to the client versus duty to the court: What takes priority?

The fine line of lawyer involvement in the stages of drafting an expert report An AIC Member may be asked to prepare an expert report in anticipation of a dispute over real property, be it a marital dispute, a dispute between landlord and tenant, or a dispute with respect to the assessment or the expropriation of property. In this article,...