Services

As defined by the Appraisal Institute of Canada:

An appraisal is an estimate of value. It can be provided orally but it is usually a written statement of market value, or value for loan purposes, or value as described by the appraiser of an adequately described property on a specific date and supported by the presentation and analysis of relevant data.

As defined by the Canadian Uniform Standard of Professional Appraisal Practice (CUSPAP):

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in Canadian dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Appraisers estimate market value by measuring the impact of market forces. Appraisers do not determine value; the market determines the value. In estimating market value the appraiser must consider many principles including supply and demand forces, competition, law of substitution, opportunity cost, conformity, highest and best use and marginal productivity among others. The appraiser will use the Direct Comparison Approach to value which looks at the differences in the legal, physical, locational and economic characteristics of comparable sales and listings, and more closely on differences in the property rights, the sale dates, the motivation of the parties and the financing involved.

Buying or selling real property can be one of the largest financial decisions you will make in your life. An appraisal offers an unbiased, informed opinion of the market value of the property you are interested in purchasing or selling. An appraisal may be needed:

• To ensure that the purchaser does not pay more for a property than it is worth.
• To obtain a qualified opinion of value for mortgage or lending purposes.
• To provide investors with adequate information upon which to base investment decisions.
• To determine the correct selling price when selling a home.

Property assessments in British Columbia are the basis for property taxation. Ensuring your commercial property is accurately and fairly assessed is a professional service we offer. Our staff have the expertise and relationships with BC Assessment staff to review and negotiate changes to assessments, where over-assessment is indicated, in a cost effective and timely fashion.

Contact our office before the January 31st appeal deadline to preserve your right of appeal.

We take a multi-stage approach for property assessment consulting to limit costs to property owners, as follows:

Step 1 – Initial review of the assessment to determine if the property inventory, Actual value, and Classification are correct, and the property is assessed fairly (equitably) with similar properties in the neighbourhood. This usually involves 1 to 3 hours consulting time and a modest fee. If the assessment appears reasonable or the degree of over assessment is minor we will likely recommend no further action. Keep in mind that the property’s Actual value may be over stated if the inventory is inaccurate – e.g., BCA is using a higher than actual building rentable area. If the property Actual value is improperly allocated among the Property Classes for a mixed-use property you may have an excessive property tax burden.

Step 2 – Assuming your property is significantly over-assessed or improperly classified we will recommend a best approach to achieving a positive outcome, including potential costs versus tax savings and our forecast of the probability of success. If you agree with our approach will begin negotiations with the local Assessor (as your agent) and file an appeal, if necessary. Some assessment issues can be resolved quickly during the initial review period, which is January 1 to January 31st of each year.

Step 3 – If we unable to resolve the assessment issues with the Assessor during the review period we will provide you with the option to continue the appeal to the Property Assessment Appeal Board or PAAB. Appeals to PAAB for more complex commercial properties are common since the initial level of appeal, the Property Assessment Review Panel, typically has insufficient time and expertise to deal with commercial property valuation and classification issues. The PAAB is a judicial tribunal with broad powers, somewhat similar to the Courts. The PAAB hears appeals based on rules of evidence and strongly encourages the parties to resolve the issues through informal mediation processes to avoid the costs of in-person hearings. During this stage the property owner may be subject to orders for financial and other property information. Our goal is to manage these requests on your behalf and minimize the disclosure of confidential business information. 

During each stage in the process our goal is to keep you informed and manage the risk of achieving a successful outcome. In our experience the best approach is to maintain a respectful relationship with BC Assessment staff but ensure the Assessor continues to give your file the highest priority for issue resolution in the shortest time frame possible.

Should you wish to engage us in the initial Step 1, please call our office at (250) 388-6242 we will put you in contact with an expert in your specific property type.

Assessed Value refers to the value for tax roll purposes. Both the Assessed Value and the Appraised Value are based on Market Value in B.C. The BCA value is the market value estimated as of July 1st of the previous year and a current market appraisal is based on the current date. An Assessment is often appraised on a bulk basis, lumping many similar homes in the same neighbourhood together. The Assessor may also not be aware of any updates or renovations that a home may have, whereas an appraisal would take both those into account.

The appraiser performs an appraisal for his/her Client and the Client is any party for whom the appraiser performs a service. This is usually the person who engages the appraiser to complete the assignment and this may or may not be the person who actually pays for the appraisal. Often the Lender /Broker will order the appraisal from the appraiser but the fee is paid by the homeowner and in this case the Lender/Broker is the Client. Appraisers work on a confidential basis with their clients (known as client-appraiser relationship), in the same fashion as other professionals such as lawyers and accountants.

Economic Life is the total period of time, which the improvements (house/buildings) contribute to the overall property value. The total Economic Life of a typical BC home is generally 65 years. Economic life and physical life can differ widely and physical life usually exceeds Economic Life. Renovations and updates can increase a property’s physical and Economic Life and poor maintenance can shorten it. Increases in land value can also have a negative impact on remaining economic life as older homes are torn down to make way for new ones, it makes less “economic” sense to keep the older one standing.

Remaining Economic Life (REL) is the estimated time period, which the improvements continue to contribute to property value. An appraiser estimates REL in part by interpreting the economic conditions, attitudes and reactions of buyers in the market.

The Remaining Economic Life is calculated by subtracting the Effective Age from the Total Economic Life.

Economic Life – Effective Age = Remaining Economic Life

For example:

A 40-year-old home that has had substantial renovations may have an effective age of 30 years.

65 years – 30 years = 35 years Remaining Economic Life (REL)