When an appraisal is prepared on behalf of a public agency, the work product is always subject to disclosure, and usually there is no expectation of privacy, unless the report carries settlement privilege. An appraiser should always assume that their appraisal report will end up in the public domain, so anything that might reflect poorly on one’s work product ought not to be included in the report. Not only should the appraisal report satisfy minimum appraisal standards, but the appraiser should ask the following questions before issuing the report:
- Is my report unfair to someone, (i.e., the taxpayers who ultimately are responsible for payment to acquire the property)?
- Would a layman (i.e., a non-appraiser) be able to understand the report?
- Does the report contain information of dubious relevance?
- Would any assumptions on which the value estimate is premised be deemed unreasonable by a layman?
- Would the value estimate be deemed unreasonable by a layman?
- Will I be ashamed of the report if it becomes public knowledge?
- Will I be embarrassed if the report is discussed in a local newspaper?
- Will I be embarrassed if the report is viewed unfavourably in a court ruling?
- Did I rationalize my conduct in the preparation of the report?
If any of these questions is cause for concern, the appraisal report should be revisited and amended accordingly before being submitted to the public agency commissioning the appraisal.
An appraisal company resisted an applicant’s access to information request received by the Saskatchewan Power Corporation (SaskPower) requesting access to an appraisal report commissioned by SaskPower in connection with the purchase of land from the Global Transportation Hub (GTH). SaskPower’s refusal to the applicant’s request was based on arguments advanced by the appraisal company that the appraisal report contains confidential information and is protected by copyright. (It is not an infringement of copyright to disclose any material pursuant to the Access to Information Act.)
The applicant filed a request with the Office of the Saskatchewan Information and Privacy Commissioner (SICP) seeking review of SaskPower’s denial for a copy of the appraisal report. As part of the review process, the SICP notified the appraisal firm, which reiterated its reasons for not wanting the appraisal report made public, on the basis that:
The appraisal contains financial, commercial and technical information supplied implicitly and explicitly in confidence.
In reviewing the appraisal report, SICP concluded that the only aspect of the report found to be confidential is the individuals’ name listed as “Vendor” in a number of sales presented in support of the value estimate, as privacy provisions extend only to individuals and not to a business or corporate entity. With the exception of redacting the names of individual vendors, SICP recommended disclosure of the appraisal report.
The appraisal firm also expressed concern over the public’s impression of the report if it were reported in a press release lacking context, stating:
That misapprehension of the content and conclusion of the Appraisal will be lost in reporting, such critical details not being important to a headline grabbing soundbite.
SICP responded that the appraisal company “could certainly take steps to publically explain the contents of the appraisal and the specific assumptions that it used to come to the land valuation,” to remedy any adverse publicity.
SICP also undertook an examination of the standards (CUSPAP) applicable to an appraisal report in the context of the concerns expressed by the appraisal company over public release of the appraisal report, that
given the specific nature of the assumptions contained in the appraisal requires a careful reading of the document, in its entirety, to determine how the values provided are arrived at., [and] that the way the appraisal is portrayed in the public will cast doubt on the…party’s [appraiser’s] abilities and confidence.
SICP observed that the appraisal company’s position was at odds with CUSPAP:
The preamble of the rules ‘…incorporates the minimum content necessary to produce a credible report that will not be misleading.’ Therefore, if the…[appraisal company] is following the requirements of the appraisal as outlined…in the rules, he or she will create a report that will not be misleading.
An appraiser cannot have it both ways: presenting an appraisal report commissioned by a public agency as credible and not misleading, as required by appraisal standards (e.g. USPAP and CUSPAP), and argue that public disclosure of the same report would “cast doubt on the appraiser’s abilities and confidence.”
For public agencies, who are ultimately accountable to the taxpayers and their right to transparency, when commissioning appraisal reports, SICP offers the following advice:
Public bodies would be well advised to warn third parties, prior to entering into a contract that their contracts or reports may be released under FOIP. Public bodies would be well advised to minimize the significance of confidentiality clauses in contracts and reports. The better course would be to have a clause in a contract that indicates that the contract and any reports or correspondence may be released in an access request.
A copy of SICP’s decision can be downloaded at https://www.canlii.org/en/sk/skipc/doc/2018/2018canlii5138/2018canlii5138.pdf. Please feel free to respond to this blog.