7 -hour national uniform standards of professional appraisal practice (uspap) update course...
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77-Hour National Uniform -Hour National Uniform Standards of Professional Standards of Professional Appraisal Practice (USPAP) Appraisal Practice (USPAP) Update CourseUpdate Course
2012-2013 USPAP2012-2013 USPAP
PreviewPreview
DesignDesign Course designed to incorporate usage of Course designed to incorporate usage of
the actual USPAP documentthe actual USPAP document Interactive exercises and real world Interactive exercises and real world
problems are intended to illustrate problems are intended to illustrate applications of USPAPapplications of USPAP
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 2
Materials You Will NeedMaterials You Will Need
Student ManualStudent Manual USPAP Document, which includes:USPAP Document, which includes:
1.1. USPAP USPAP 2.2. Advisory Opinions (AO)Advisory Opinions (AO)3.3. Frequently Asked QuestionsFrequently Asked Questions (FAQ) (FAQ)
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 3
Materials You Will NeedMaterials You Will Need
Course ObjectivesCourse Objectives Present and explain revisions to USPAP Present and explain revisions to USPAP
effective Jan 1, 2012 through Dec 31, 2013effective Jan 1, 2012 through Dec 31, 2013 Present changes to USPAP in a variety of Present changes to USPAP in a variety of
scenarios for discussionscenarios for discussion Present “real world” scenarios that Present “real world” scenarios that
challenge participants to interpret and challenge participants to interpret and apply USPAP apply USPAP
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 4
AnnouncementsAnnouncements
Break times and lunchBreak times and lunch Restroom locationsRestroom locations Smoking areasSmoking areas Please silence your cell phonePlease silence your cell phone Recording is prohibitedRecording is prohibited Be considerate of those near youBe considerate of those near you Attendance sheetAttendance sheet Certificates and evaluation formsCertificates and evaluation forms
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 5
IntroductionsIntroductions
InstructorInstructor
<Instructor name><Instructor name>
<phone><phone>
<email><email>
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 6
Section OneSection One
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 7
Changes to USPAP andChanges to USPAP andApplication of the ChangesApplication of the Changes
Changes to USPAPChanges to USPAP
A.A. The ASB develops and submits drafts for The ASB develops and submits drafts for public exposurepublic exposure
1.1. Exposure DraftsExposure Draftsa.a. Combined result of numerous sourcesCombined result of numerous sourcesb.b. ASB takes ownership of the language and ASB takes ownership of the language and
officially votes to approve it for releaseofficially votes to approve it for release
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 8
Why and How USPAP ChangesWhy and How USPAP Changes
Section 1-3Section 1-3
Changes to USPAPChanges to USPAP
A.A. The ASB develops and submits drafts for The ASB develops and submits drafts for public exposure (cont’d)public exposure (cont’d)
2.2. Comment deadlinesComment deadlinesa.a. Exposure period is not less than 30 days Exposure period is not less than 30 days
though typically 60 days. Visit TAF website: though typically 60 days. Visit TAF website: www.appraisalfoundation.orgwww.appraisalfoundation.org
b.b. A longer time may be selected for complex A longer time may be selected for complex documentsdocuments
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 9
Why and How USPAP ChangesWhy and How USPAP Changes
Section 1-3Section 1-3
Changes to USPAPChanges to USPAP
B.B. The ASB analyzes comments receivedThe ASB analyzes comments received1.1. All comments are sent to the TAF office in All comments are sent to the TAF office in
Washington, DC, where a permanent file of all Washington, DC, where a permanent file of all comments is maintained. All comments are comments is maintained. All comments are given impartial consideration by the ASBgiven impartial consideration by the ASB
2.2. Each individual submitting a response receives Each individual submitting a response receives an acknowledgement of receipt from the staff. an acknowledgement of receipt from the staff. Further communication with respondents is Further communication with respondents is optional at the discretion of the ASBoptional at the discretion of the ASB
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 10
Why and How USPAP ChangesWhy and How USPAP Changes
Section 1-4Section 1-4
Changes to USPAPChanges to USPAP
B.B. The ASB analyzes comments received The ASB analyzes comments received (cont’d)(cont’d)
3.3. Comment letters are read and are valued by Comment letters are read and are valued by the ASB. A good example of this is the fact the the ASB. A good example of this is the fact the current PREAMBLE was taken almost verbatim current PREAMBLE was taken almost verbatim from a comment letterfrom a comment letter
4.4. A permanent record of the history of the A permanent record of the history of the drafts, a file of comments received in response drafts, a file of comments received in response to the exposure draft(s), and other pertinent to the exposure draft(s), and other pertinent correspondence and reports is maintained correspondence and reports is maintained
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 11
Why and How USPAP ChangesWhy and How USPAP Changes
Section 1-4Section 1-4
Changes to USPAPChanges to USPAP
B.B. The ASB analyzes comments received The ASB analyzes comments received (cont’d)(cont’d)
5.5. If changes in the original exposure draft are If changes in the original exposure draft are substantial enough to constitute a substantial enough to constitute a fundamental change in direction, then fundamental change in direction, then consideration is given to additional exposure consideration is given to additional exposure drafts as neededdrafts as needed
a.a. Five exposure drafts for 2012-2013Five exposure drafts for 2012-2013b.b. Postponed COMMUNICATION RULE in Third Postponed COMMUNICATION RULE in Third
Exposure Draft for 2012-2013Exposure Draft for 2012-2013© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 12
Why and How USPAP ChangesWhy and How USPAP Changes
Section 1-4Section 1-4
Changes to USPAPChanges to USPAP
C.C. The ASB finalizes any changes to USPAPThe ASB finalizes any changes to USPAP1.1. Final action on a proposed change may be Final action on a proposed change may be
taken onlytaken onlya.a. After the completion of the exposure After the completion of the exposure
process and process and b.b. After discussion and adoption at a public After discussion and adoption at a public
meeting meeting 2.2. Once adopted, the changes must be definitive Once adopted, the changes must be definitive
and cannot contain alternative wordingsand cannot contain alternative wordings
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 13
Why and How USPAP ChangesWhy and How USPAP Changes
Section 1-5Section 1-5
Changes to USPAPChanges to USPAP
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 14
Illustration: Process in ActionIllustration: Process in Action
Section 1-5Section 1-5
The new RECORD KEEPING RULE illustrates how the The new RECORD KEEPING RULE illustrates how the process works. The record keeping issue was brought to process works. The record keeping issue was brought to the ASB from several sources. the ASB from several sources. Record KeepingRecord Keeping has has been a section within the ETHICS RULE for over two been a section within the ETHICS RULE for over two decades. Minor record keeping errors such as not decades. Minor record keeping errors such as not having a signed copy of the report in the workfile, having a signed copy of the report in the workfile, could be classified as an ETHICS RULE violation. So the could be classified as an ETHICS RULE violation. So the Record Keeping Record Keeping section was moved from the ETHICS section was moved from the ETHICS RULE to its own rule. Initial feedback was that failure to RULE to its own rule. Initial feedback was that failure to properly maintain a workfile should be considered an properly maintain a workfile should be considered an ethical violation. ethical violation.
Changes to USPAPChanges to USPAP
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 15
Illustration: Process in ActionIllustration: Process in Action
Section 1-5Section 1-5
(cont’d) The ASB was still concerned that (cont’d) The ASB was still concerned that appraisers might, in some cases, be considered appraisers might, in some cases, be considered unethical because of what might be clerical errors unethical because of what might be clerical errors by the appraiser. The ASB then added language by the appraiser. The ASB then added language to the ETHICS RULE addressing “willingly and to the ETHICS RULE addressing “willingly and knowingly” violating the RECORD KEEPING RULE knowingly” violating the RECORD KEEPING RULE in the next draft. After additional feedback, the in the next draft. After additional feedback, the language in the Fifth Exposure Draft was “willingly language in the Fifth Exposure Draft was “willingly or knowingly,” so that, for enforcement purposes, or knowingly,” so that, for enforcement purposes, either would be an ethical violation either would be an ethical violation
Changes to USPAPChanges to USPAP
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 16
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-5Section 1-5
Changes to USPAPChanges to USPAP
A.A. DefinitionsDefinitions1.1. ClientClient
a.a. RationaleRationale1.1. Questions and concerns regarding Questions and concerns regarding
definition, particularly with Appraisal definition, particularly with Appraisal Management CompaniesManagement Companies
2.2. AMCs were often identified as the client AMCs were often identified as the client when, in practice AMCs were acting as an when, in practice AMCs were acting as an agent of a client who initiated the orderagent of a client who initiated the order
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 17
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-6Section 1-6
Changes to USPAPChanges to USPAP
A.A. DefinitionsDefinitions1.1. ClientClient
a.a. Rationale (cont’d)Rationale (cont’d)3.3. Guidance is provided in 2012-2013 FAQs Guidance is provided in 2012-2013 FAQs
116 and 117116 and 1174.4. Comment Comment was changed to make it clear an was changed to make it clear an
agent may act as a representative of the agent may act as a representative of the clientclient
5.5. Edits were also made to SMT-9Edits were also made to SMT-9© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 18
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-6Section 1-6
Changes to USPAPChanges to USPAP
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 19
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-6Section 1-6
Changes to USPAPChanges to USPAP
A.A. DefinitionsDefinitions2.2. Exposure TimeExposure Time
a.a. RationaleRationale1.1. The only definition of exposure time was The only definition of exposure time was
included in SMT-6included in SMT-62.2. The definition is substantially the same and The definition is substantially the same and
moving it to the DEFINITIONS enhances the moving it to the DEFINITIONS enhances the usability of USPAPusability of USPAP
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 20
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-6Section 1-6
Changes to USPAPChanges to USPAP
b.b. Revised definitionRevised definition
EXPOSURE TIME: estimated length of time that EXPOSURE TIME: estimated length of time that the property interest being appraised would the property interest being appraised would have been offered on the market prior to the have been offered on the market prior to the hypothetical consummation of a sale at market hypothetical consummation of a sale at market value on the effective date of the appraisal. value on the effective date of the appraisal.
Comment: Exposure time is a retrospective Comment: Exposure time is a retrospective opinion based on an analysis of past events opinion based on an analysis of past events assuming a competitive and open market.assuming a competitive and open market.
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 21
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-7Section 1-7
Changes to USPAPChanges to USPAP
A.A. DefinitionsDefinitions3.3. Extraordinary Assumptions and Hypothetical Extraordinary Assumptions and Hypothetical
ConditionsConditionsa.a. RationaleRationale
1.1. Often misunderstood and misappliedOften misunderstood and misapplied2.2. Adding the concept of effective date Adding the concept of effective date
reduces misunderstanding and reduces misunderstanding and misapplicationmisapplication
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Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-6Section 1-6
Changes to USPAPChanges to USPAP
A.A. DefinitionsDefinitions3.3. Extraordinary Assumptions and Hypothetical Extraordinary Assumptions and Hypothetical
ConditionsConditionsa.a. Rationale (cont’d)Rationale (cont’d)
3.3. Additional wording also makes it clear that Additional wording also makes it clear that a Hypothetical Condition is contrary to a Hypothetical Condition is contrary to what is known to exist on the effective date what is known to exist on the effective date of the assignment resultsof the assignment results
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Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-6Section 1-6
Changes to USPAPChanges to USPAP
b.b. Revised definitionRevised definition
EXTRAORDINARY ASSUMPTION: an assumption, directly EXTRAORDINARY ASSUMPTION: an assumption, directly related to a specific assignment, related to a specific assignment, as of the effective date of as of the effective date of the assignment results,the assignment results, which, if found to be false, could which, if found to be false, could alter the appraiser’s opinions or conclusions.alter the appraiser’s opinions or conclusions.
Comment:Comment: Extraordinary assumptions presume as fact Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about economic characteristics of the subject property; or about conditions external to the property, such as market conditions external to the property, such as market conditions or trends; or about the integrity of data used conditions or trends; or about the integrity of data used in an analysis.in an analysis.
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 24
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-7Section 1-7
Changes to USPAPChanges to USPAP
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 25
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-7Section 1-7
Changes to USPAPChanges to USPAP
B.B. Revisions relating to development and disclosure of Revisions relating to development and disclosure of exposure timeexposure time
1.1. RationaleRationalea.a. The reporting requirements in STANDARDS 2, 6, 8, AND 10 The reporting requirements in STANDARDS 2, 6, 8, AND 10
include the following include the following Comment:Comment:
Stating the definition of value also requires any comments Stating the definition of value also requires any comments needed to clearly indicate to intended users how the needed to clearly indicate to intended users how the definition is being applied.definition is being applied.Interpretations of this comment vary. Some think it means Interpretations of this comment vary. Some think it means that when an opinion of exposure time is developed, that that when an opinion of exposure time is developed, that opinion must be reported. Others think that when there opinion must be reported. Others think that when there are atypical conditions requiring explanation, those are atypical conditions requiring explanation, those conditions, which might include exposure time, must be conditions, which might include exposure time, must be addressed. Still others see this addressed. Still others see this CommentComment as unclear as unclear
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 26
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-8Section 1-8
Changes to USPAPChanges to USPAP
1.1. Rationale (cont’d)Rationale (cont’d)b.b. The ASB wanted a clear requirement that The ASB wanted a clear requirement that
reasonable exposure time must be reasonable exposure time must be reported reported in all in all assignments in which an opinion must be assignments in which an opinion must be developeddeveloped
c.c. While USPAP had requirements for developing an While USPAP had requirements for developing an opinion of reasonable exposure time when opinion of reasonable exposure time when developing an opinion of market value for real developing an opinion of market value for real and personal property, the reporting of such an and personal property, the reporting of such an opinion was not clearly specified in the reporting opinion was not clearly specified in the reporting requirements of STANDARDS 2 (real property) and requirements of STANDARDS 2 (real property) and 8 (personal property)8 (personal property)
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 27
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-8Section 1-8
Changes to USPAPChanges to USPAP
1.1. Rationale (cont’d)Rationale (cont’d)d.d. Proposed language was suggested as a Proposed language was suggested as a
Comment to Standards Rule 7-2(c):Comment to Standards Rule 7-2(c):
Comment:Comment: When exposure time is a When exposure time is a component of the definition for the value component of the definition for the value opinion being developed, the appraiser must opinion being developed, the appraiser must also develop an opinion of reasonable also develop an opinion of reasonable exposure time linked to that value opinion.exposure time linked to that value opinion.
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 28
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-8Section 1-8
Changes to USPAPChanges to USPAP
1.1. Rationale (cont’d)Rationale (cont’d)e.e. STANDARD 1 had the requirement that the STANDARD 1 had the requirement that the
appraiser, when developing an opinion of appraiser, when developing an opinion of market value, also develop an opinion of market value, also develop an opinion of reasonable exposure time linked to the market reasonable exposure time linked to the market value opinion. Based on this development value opinion. Based on this development requirement, inclusion of the exposure time requirement, inclusion of the exposure time opinion in the report would be the opinion in the report would be the appropriate means to indicate compliance appropriate means to indicate compliance with STANDARD 1with STANDARD 1
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 29
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-9Section 1-9
Changes to USPAPChanges to USPAP
1.1. Rationale (cont’d)Rationale (cont’d)f.f. The Comment of Standards Rule 1-2(c) was edited The Comment of Standards Rule 1-2(c) was edited
to require the opinion of reasonable exposure to require the opinion of reasonable exposure time whenever it is an element of the definition, time whenever it is an element of the definition, regardless of what the type of value is labeledregardless of what the type of value is labeled
g.g. Language was added to Standards Rules 2-2(a)(v), Language was added to Standards Rules 2-2(a)(v), 2-2(b)(v), and 2-2(c)(v) requiring that the opinion 2-2(b)(v), and 2-2(c)(v) requiring that the opinion of exposure time, when developed in compliance of exposure time, when developed in compliance with Standards Rule 1-2(c), be stated in the reportwith Standards Rule 1-2(c), be stated in the report
h.h. To add to the overall understandability of USPAP, To add to the overall understandability of USPAP, the definition of exposure time was moved from the definition of exposure time was moved from SMT-6 and placed in DEFINITIONS in the USPAP SMT-6 and placed in DEFINITIONS in the USPAP documentdocument
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 30
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-9Section 1-9
Changes to USPAPChanges to USPAP
2.2. ChangesChangesa)a) The Comment to Standards Rule 1-2(c)(iv), as The Comment to Standards Rule 1-2(c)(iv), as
well as Standards Rule 7-2(c)(iv), was changed well as Standards Rule 7-2(c)(iv), was changed as follows:as follows:
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Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-9Section 1-9
Changes to USPAPChanges to USPAP
2.2. Changes (cont’d)Changes (cont’d)c.c. Only the edits to STANDARD 2 were shown Only the edits to STANDARD 2 were shown
above; however, corresponding edits were above; however, corresponding edits were also made to STANDARD 8also made to STANDARD 8
d.d. Revisions, including corresponding edits, were Revisions, including corresponding edits, were made to SMT-6 to reflect the changes to the made to SMT-6 to reflect the changes to the Standards Rules regarding exposure time. Standards Rules regarding exposure time. Reference is made to SMT 6 in your USPAP Reference is made to SMT 6 in your USPAP document document
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 32
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-10Section 1-10
Changes to USPAPChanges to USPAP
1)1) I received an appraisal order from an I received an appraisal order from an Appraisal Management Company (AMC) Appraisal Management Company (AMC) which has requested to be identified as the which has requested to be identified as the client in the appraisal report. The AMC will client in the appraisal report. The AMC will not provide its client’s name. Does USPAP not provide its client’s name. Does USPAP allow me to identify the AMC as the client if allow me to identify the AMC as the client if the AMC will not disclose the name of its the AMC will not disclose the name of its client?client?
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 33
In the Real WorldIn the Real World
Section 1-12Section 1-12
Changes to USPAPChanges to USPAP
2)2) I was recently asked to perform an appraisal I was recently asked to perform an appraisal assignment, but the individual that assignment, but the individual that contacted my firm was not the client and contacted my firm was not the client and indicated that the client could not be indicated that the client could not be identified. Can I accept this assignment and identified. Can I accept this assignment and comply with USPAP?comply with USPAP?
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 34
In the Real WorldIn the Real World
Section 1-12Section 1-12
Changes to USPAPChanges to USPAP
3)3) I am completing a market value appraisal. I I am completing a market value appraisal. I use standard pre-printed residential report use standard pre-printed residential report forms that ask for a neighborhood marketing forms that ask for a neighborhood marketing time. Does marketing time on these forms time. Does marketing time on these forms mean the same thing as exposure time as it mean the same thing as exposure time as it is used in USPAP?is used in USPAP?
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 35
In the Real WorldIn the Real World
Section 1-13Section 1-13
Changes to USPAPChanges to USPAP
4)4) What is the difference between a client and What is the difference between a client and an intended user?an intended user?
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 36
In the Real WorldIn the Real World
Section 1-13Section 1-13
Changes to USPAPChanges to USPAP
5)5) When appraising real property, confusion often When appraising real property, confusion often exists between hypothetical conditions and exists between hypothetical conditions and extraordinary assumptions, and between extraordinary assumptions, and between extraordinary assumptions and assumptions. extraordinary assumptions and assumptions. This confusion leads to potential misapplication This confusion leads to potential misapplication in appraisal assignments. Test your in appraisal assignments. Test your understanding of the terms by identifying the understanding of the terms by identifying the following examples as: a) an extraordinary following examples as: a) an extraordinary assumption; b) a hypothetical condition; or c) assumption; b) a hypothetical condition; or c) an assumption. You may want to review the an assumption. You may want to review the definitions of all three first. definitions of all three first.
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 37
In the Real WorldIn the Real World
Section 1-14Section 1-14
Changes to USPAPChanges to USPAP
5)5) (cont’d)(cont’d)1.1. Title to the property is good and marketableTitle to the property is good and marketable2.2. Appraising a site as if sewer were available when Appraising a site as if sewer were available when
it is notit is not3.3. Appraising a site as if the zoning were differentAppraising a site as if the zoning were different4.4. Appraising a site under an assumed zoning when Appraising a site under an assumed zoning when
the zoning is not known and there is no evidence the zoning is not known and there is no evidence that the assumed zoning is not possiblethat the assumed zoning is not possible
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 38
In the Real WorldIn the Real World
Section 1-14Section 1-14
Changes to USPAPChanges to USPAP
5)5) (cont’d)(cont’d)5.5. Appraising irrigated farmland on the premise Appraising irrigated farmland on the premise
water supply is adequate for irrigated crop water supply is adequate for irrigated crop production, knowing that the existing supply is production, knowing that the existing supply is not adequatenot adequate
6.6. Appraising a property as though there were no Appraising a property as though there were no issues when there is a potential structural issues when there is a potential structural problem (i.e., crack in a foundation wall)problem (i.e., crack in a foundation wall)
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 39
In the Real WorldIn the Real World
Section 1-14Section 1-14
Changes to USPAPChanges to USPAP
5)5) (cont’d)(cont’d)7.7. Appraising proposed improvements, such as new Appraising proposed improvements, such as new
construction or additions, as of the date of construction or additions, as of the date of completion (a prospective date of valuecompletion (a prospective date of value
8.8. Appraising proposed improvements, such as new Appraising proposed improvements, such as new construction or additions, assuming they were construction or additions, assuming they were completed as of a current effective datecompleted as of a current effective date
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 40
In the Real WorldIn the Real World
Section 1-14Section 1-14
Changes to USPAPChanges to USPAP
6)6) The Federal Highway Administration (FHWA) The Federal Highway Administration (FHWA) publishes a publishes a Guide for Preparing an Appraisal Guide for Preparing an Appraisal Scope of Work. Scope of Work. One of the items listed is One of the items listed is that the property being acquired should be that the property being acquired should be “appraised as if free and clear of “appraised as if free and clear of contamination,” unless otherwise specified. contamination,” unless otherwise specified. Is this a jurisdictional exception, Is this a jurisdictional exception, extraordinary assumption, or hypothetical extraordinary assumption, or hypothetical condition?condition?
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In the Real WorldIn the Real World
Section 1-15Section 1-15
Changes to USPAPChanges to USPAP
7)7) If I employ a hypothetical condition or an If I employ a hypothetical condition or an extraordinary assumption in an assignment, extraordinary assumption in an assignment, does USPAP require me to label it as such?does USPAP require me to label it as such?
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In the Real WorldIn the Real World
Section 1-15Section 1-15
Changes to USPAPChanges to USPAP
C.C. RECORD KEEPING RULE and related edits to the RECORD KEEPING RULE and related edits to the ConductConduct section of the ETHICS RULE section of the ETHICS RULE
1.1. Rationale for addition of Rule and related editsRationale for addition of Rule and related editsa.a. The appropriateness of having record keeping The appropriateness of having record keeping
requirements located within the ETHICS RULE has requirements located within the ETHICS RULE has been questionedbeen questioned
b.b. While record keeping is important, minor While record keeping is important, minor infractions should not rise to the level of an infractions should not rise to the level of an ethical violation. However, deliberate acts that ethical violation. However, deliberate acts that violate the record keeping requirements should violate the record keeping requirements should be seen as ethical violationsbe seen as ethical violations
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Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-15Section 1-15
Changes to USPAPChanges to USPAP
C.C. RECORD KEEPING RULE and related edits to RECORD KEEPING RULE and related edits to the the ConductConduct section of the ETHICS RULE section of the ETHICS RULE
1.1. Rationale for addition of Rule and edits (cont’d)Rationale for addition of Rule and edits (cont’d)c.c. The prohibition against a willful or deliberate The prohibition against a willful or deliberate
failure to comply with the RECORD KEEPING failure to comply with the RECORD KEEPING RULE has been added to the RULE has been added to the ConductConduct section section of the ETHICS RULE Regardless of how minor of the ETHICS RULE Regardless of how minor errors originate, appraisers are ultimately errors originate, appraisers are ultimately responsible for record keeping requirementsresponsible for record keeping requirements
d.d. The changes improve clarity and The changes improve clarity and reasonablenessreasonableness
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Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-16Section 1-16
Changes to USPAPChanges to USPAP
C.C. RECORD KEEPING RULE and related edits to RECORD KEEPING RULE and related edits to the the ConductConduct section of the ETHICS RULE section of the ETHICS RULE
2.2. ChangesChangesa.a. The RECORD KEEPING RULE was added to the The RECORD KEEPING RULE was added to the
2012-2013 edition of USPAP, replacing the 2012-2013 edition of USPAP, replacing the prior prior Record KeepingRecord Keeping section of the ETHICS section of the ETHICS RULERULE
b.b. The new Rule incorporates parts of the prior The new Rule incorporates parts of the prior Record KeepingRecord Keeping section of the ETHICS RULE, section of the ETHICS RULE, with changes and additions. The new RECORD with changes and additions. The new RECORD KEEPING RULE appears on the following page KEEPING RULE appears on the following page
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 45
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-16Section 1-16
Changes to USPAPChanges to USPAP
C.C. RECORD KEEPING RULE and related edits to RECORD KEEPING RULE and related edits to the the ConductConduct section of the ETHICS RULE section of the ETHICS RULE
2.2. ChangesChangesc.c. The prohibition against a willful or deliberate The prohibition against a willful or deliberate
failure to comply with the RECORD KEEPING failure to comply with the RECORD KEEPING RULE was added to the RULE was added to the ConductConduct section of the section of the ETHICS RULE. Reference is made to the USPAP ETHICS RULE. Reference is made to the USPAP document for the entire rule. The additional document for the entire rule. The additional prohibition statesprohibition states
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 46
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-16Section 1-16
An appraiser:
must not willfully or knowingly violate the requirements of the RECORD KEEPING RULE;
An appraiser who willfully or knowingly fails to comply with the obligations of this RECORD KEEPING RULE is in violation of the ETHICS RULE.
An appraiser:
must not willfully or knowingly violate the requirements of the RECORD KEEPING RULE;
An appraiser who willfully or knowingly fails to comply with the obligations of this RECORD KEEPING RULE is in violation of the ETHICS RULE.
Changes to USPAPChanges to USPAP
C.C. RECORD KEEPING RULE and related edits to RECORD KEEPING RULE and related edits to the the ConductConduct section of the ETHICS RULE section of the ETHICS RULE
2.2. ChangesChangesd.d. With the adoption of the RECORD KEEPING With the adoption of the RECORD KEEPING
RULE, edits to Standards Rules 2-4, 3-7, 5-4, RULE, edits to Standards Rules 2-4, 3-7, 5-4, 8-4, and 10-4 were required8-4, and 10-4 were required
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 47
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Section 1-18Section 1-18
Changes to USPAPChanges to USPAP
D.D. Revisions to Standards Rules 2-3, 3-6, 5-3, 6-9, 8-Revisions to Standards Rules 2-3, 3-6, 5-3, 6-9, 8-3, and 10-3, addressing prior services in the 3, and 10-3, addressing prior services in the report certificationreport certification
1.1. Rationale for revision Rationale for revision a.a. In the 2010-2011 edition of USPAP, prior services In the 2010-2011 edition of USPAP, prior services
were to be addressed in the certification only were to be addressed in the certification only when the appraiser had provided them within the when the appraiser had provided them within the relevant time framerelevant time frame
b.b. Conversely, in the same edition of USPAP, the Conversely, in the same edition of USPAP, the appraiser must disclose either the presence or appraiser must disclose either the presence or absence of any current or prospective interest absence of any current or prospective interest regarding the subject or the parties involvedregarding the subject or the parties involved
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Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-18Section 1-18
Changes to USPAPChanges to USPAP
D.D. Revisions to Standards Rules 2-3, 3-6, 5-3, 6-Revisions to Standards Rules 2-3, 3-6, 5-3, 6-9, 8-3, and 10-3, addressing prior services in 9, 8-3, and 10-3, addressing prior services in the report certificationthe report certification
1.1. Rationale for revision (cont’d)Rationale for revision (cont’d)c.c. Confusion among appraisers and users of Confusion among appraisers and users of
appraisal services exists with respect to appraisal services exists with respect to disclosing and reporting a prior serviced.disclosing and reporting a prior serviced.
d.d. To improve consistency and help reduce client To improve consistency and help reduce client questions, an addition has been made to the questions, an addition has been made to the certification regarding prior services certification regarding prior services
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Section 1-18Section 1-18
Changes to USPAPChanges to USPAP
D.D. Revisions to Standards Rules 2-3, 3-6, 5-3, 6-Revisions to Standards Rules 2-3, 3-6, 5-3, 6-9, 8-3, and 10-3, addressing prior services in 9, 8-3, and 10-3, addressing prior services in the report certificationthe report certification
2.2. ChangesChangesa.a. The following addition has been made to the The following addition has been made to the
certifications for Standards Rule 2-3, 3-6, 5-3, certifications for Standards Rule 2-3, 3-6, 5-3, 6-9, 8-3, and 10-3. 6-9, 8-3, and 10-3.
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Section 1-18Section 1-18
SR 2-3, 5-3, 6-9, 8-3, and 10-3:I have performed no (or the specified) services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.
SR 3-6:I have performed no (or the specified) other services, as an appraiser or in any other capacity, regarding the property that is the subject of the work under review within the three-year period immediately preceding acceptance of this assignment.
SR 2-3, 5-3, 6-9, 8-3, and 10-3:I have performed no (or the specified) services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.
SR 3-6:I have performed no (or the specified) other services, as an appraiser or in any other capacity, regarding the property that is the subject of the work under review within the three-year period immediately preceding acceptance of this assignment.
Changes to USPAPChanges to USPAP
1)1) If I have appraised a property multiple times If I have appraised a property multiple times within the previous three years, do I have to within the previous three years, do I have to disclose the disclose the number number of appraisal services? of appraisal services? (e.g., “I have appraised the subject property (e.g., “I have appraised the subject property three times during the previous three three times during the previous three years.”)years.”)
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Section 1-19Section 1-19
Changes to USPAPChanges to USPAP
2)2) If I have performed a service other than If I have performed a service other than appraisal practice, such as acting as a general appraisal practice, such as acting as a general contractor within the prior three years, do I contractor within the prior three years, do I have to describe the specific service or have to describe the specific service or merely state a service was performed?merely state a service was performed?
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Section 1-19Section 1-19
Changes to USPAPChanges to USPAP
3)3) The The CommentComment to the to the Conduct Conduct section of the section of the ETHICS RULE states, in part, ETHICS RULE states, in part, ““If an appraiser If an appraiser has agreed with a client not to disclose that has agreed with a client not to disclose that he or she has appraised a property, the he or she has appraised a property, the appraiser must decline all subsequent appraiser must decline all subsequent assignments that fall within the three-year assignments that fall within the three-year period.”period.” Does this really mean that the Does this really mean that the appraiser could not be engaged by this same appraiser could not be engaged by this same client, on this property, within the thee-year client, on this property, within the thee-year period?period?
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In the Real WorldIn the Real World
Section 1-20Section 1-20
Changes to USPAPChanges to USPAP
4)4) I am aware of the disclosure requirements in I am aware of the disclosure requirements in the the ConductConduct section of the ETHICS RULE that section of the ETHICS RULE that requires me to disclose any services I requires me to disclose any services I performed regarding the subject property performed regarding the subject property within the prior three years. If I have within the prior three years. If I have notnot performed any such services, am I required performed any such services, am I required to make that disclosure as well?to make that disclosure as well?
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In the Real WorldIn the Real World
Section 1-20Section 1-20
Changes to USPAPChanges to USPAP
6)6) How must recognition of my significant How must recognition of my significant appraisal assistance be included when there appraisal assistance be included when there is no written report, but significant is no written report, but significant assistance was provided and documentation assistance was provided and documentation of my work is in the workfile?of my work is in the workfile?
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In the Real WorldIn the Real World
Section 1-21Section 1-21
Changes to USPAPChanges to USPAP
7)7) I am aware of and comply with the workfile I am aware of and comply with the workfile retention requirements in the RECORD retention requirements in the RECORD KEEPING RULE in USPAP. However, once the KEEPING RULE in USPAP. However, once the required retention period has passed, does required retention period has passed, does USPAP dictate a method I must employ to USPAP dictate a method I must employ to dispose of the workfiles?dispose of the workfiles?
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In the Real WorldIn the Real World
Section 1-22Section 1-22
Changes to USPAPChanges to USPAP
8)8) The RECORD KEEPING RULE states, in part: The RECORD KEEPING RULE states, in part: The workfile must include…true copies of any The workfile must include…true copies of any written reports… written reports… Does a true copy have to Does a true copy have to include a signature on the certification?include a signature on the certification?
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In the Real WorldIn the Real World
Section 1-22Section 1-22
Changes to USPAPChanges to USPAP
E.E. Revisions to STANDARDS 7 and 8: Personal Revisions to STANDARDS 7 and 8: Personal Property Appraisal, Development and Property Appraisal, Development and ReportingReporting
1.1. Rationale for revising STANDARDS 7 and 8Rationale for revising STANDARDS 7 and 8a.a. The personal property community indicated The personal property community indicated
that STANDARDS 7 and 8 did not use personal that STANDARDS 7 and 8 did not use personal property terminology and, in some cases, did property terminology and, in some cases, did not reflect current practice within the not reflect current practice within the personal property disciplinepersonal property discipline
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Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-23Section 1-23
Changes to USPAPChanges to USPAP
E.E. Revisions to STANDARDS 7 and 8: Personal Revisions to STANDARDS 7 and 8: Personal Property Appraisal, Development and ReportingProperty Appraisal, Development and Reporting
1.1. Rationale for revising STANDARDS 7 and 8 (cont’d)Rationale for revising STANDARDS 7 and 8 (cont’d)b.b. STANDARDS 7 and 8 had not been STANDARDS 7 and 8 had not been
comprehensively reviewed for several years comprehensively reviewed for several years c.c. A Personal Property Task Force (PPTF) was A Personal Property Task Force (PPTF) was
appointed and made numerous appointed and made numerous recommendations to the ASB, resulting in recommendations to the ASB, resulting in significant changes to STANDARD 7significant changes to STANDARD 7
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 59
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Section 1-23Section 1-23
Changes to USPAPChanges to USPAP
2.2. ChangesChangesa.a. STANDARD 7 has changed significantly. Many of STANDARD 7 has changed significantly. Many of
the changes present language that is more the changes present language that is more consistent with that used by personal property consistent with that used by personal property appraisers. However, some of the changes have a appraisers. However, some of the changes have a more significant effect on acceptable more significant effect on acceptable performance performance
b.b. Personal property can have multiple market and Personal property can have multiple market and multiple uses, and is largely portable in nature. multiple uses, and is largely portable in nature. Therefore, Standards Rule 7-3(a) was changed to Therefore, Standards Rule 7-3(a) was changed to eliminate the language that is typically associated eliminate the language that is typically associated with highest and best use to be more consistent with highest and best use to be more consistent with the vocabulary and practices of the personal with the vocabulary and practices of the personal property appraiserproperty appraiser
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Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-23Section 1-23
Changes to USPAPChanges to USPAP
2.2. ChangesChangesc.c. Personal property appraisals frequently involve Personal property appraisals frequently involve
multiple objects in a single appraisal assignment, multiple objects in a single appraisal assignment, and the value significance of these objects can and the value significance of these objects can vary greatly. Standards Rule 7-4(e) was changed vary greatly. Standards Rule 7-4(e) was changed to specify that objects which are more significant to specify that objects which are more significant to the assignment results should be the focus of to the assignment results should be the focus of the analysisthe analysis
d.d. Wording in Standards Rule 7-5 was changed. The Wording in Standards Rule 7-5 was changed. The Rule now requires the analysis of prior sales that Rule now requires the analysis of prior sales that occurred within a reasonable and applicable time occurred within a reasonable and applicable time period, if relevant given the intended use of the period, if relevant given the intended use of the appraisal and property type.appraisal and property type.
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 61
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-23Section 1-23
Changes to USPAPChanges to USPAP
2.2. ChangesChangese.e. Edits were made to STANDARD 8 consistent Edits were made to STANDARD 8 consistent
with changes to STANDARD 2 and the other with changes to STANDARD 2 and the other reporting standards regarding the reporting of reporting standards regarding the reporting of exposure time, the labeling of hypothetical exposure time, the labeling of hypothetical conditions, the RECORD KEEPING RULE, and conditions, the RECORD KEEPING RULE, and the revised certificationthe revised certification
f.f. It is important to reference STANDARDS 7 and It is important to reference STANDARDS 7 and 8 in their entirety because of the extensive 8 in their entirety because of the extensive updating and revising to bothupdating and revising to both
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Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-24Section 1-24
Changes to USPAPChanges to USPAP
F.F. Revisions to Advisory Opinion 21, USPAP Revisions to Advisory Opinion 21, USPAP ComplianceCompliance
1.1. Rationale for revisingRationale for revisinga.a. Requests were received from appraisers, Requests were received from appraisers,
appraisal clients, and state appraisal appraisal clients, and state appraisal regulatory officials for additional clarification regulatory officials for additional clarification and additional illustrative examples in and additional illustrative examples in Advisory Opinion 21, Advisory Opinion 21, USPAP ComplianceUSPAP Compliance
b.b. The addition of the new RECORD KEEPING The addition of the new RECORD KEEPING RULE necessitated, in part, some edits and RULE necessitated, in part, some edits and enhancements to the Advisory Opinionenhancements to the Advisory Opinion
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 63
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-24Section 1-24
Changes to USPAPChanges to USPAP
F.F. Revisions to Advisory Opinion 21, USPAP Revisions to Advisory Opinion 21, USPAP ComplianceCompliance
2.2. ChangesChangesa.a. The illustrations in AO-21 were reviewed and The illustrations in AO-21 were reviewed and
updated or replaced as necessary to provide updated or replaced as necessary to provide relevant guidance regarding when USPAP applies.relevant guidance regarding when USPAP applies.
b.b. Other edits were made as necessaryOther edits were made as necessaryc.c. Reference is made to AO-21 in the USPAP Reference is made to AO-21 in the USPAP
document under the Advisory Opinions tab for document under the Advisory Opinions tab for the full content of the revised Advisory Opinionthe full content of the revised Advisory Opinion
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 64
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-24Section 1-24
Changes to USPAPChanges to USPAP
G.G. Other changes to USPAPOther changes to USPAP1.1. Appropriate edits were made throughout USPAP Appropriate edits were made throughout USPAP
to reflect the changes to reflect the changes 2.2. No STATEMENTS were added or deleted for 2012-No STATEMENTS were added or deleted for 2012-
2013. As appropriate, STATEMENTS were edited 2013. As appropriate, STATEMENTS were edited for consistency with changes to the USPAP for consistency with changes to the USPAP document document
3.3. No Advisory Opinions were added and none No Advisory Opinions were added and none were deleted for 2012-2013. were deleted for 2012-2013.
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 65
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-24Section 1-24
Changes to USPAPChanges to USPAP
G.G. Other changes to USPAPOther changes to USPAP4.4. Guidance was removed from Advisory Opinion 13 Guidance was removed from Advisory Opinion 13
(AO-13), (AO-13), Performing Evaluations of Real Property Performing Evaluations of Real Property Collateral to Conform with USPAPCollateral to Conform with USPAP, for the 2012-2013 , for the 2012-2013 edition of the USPAP document. The guidelines edition of the USPAP document. The guidelines offered in AO-13 were superseded by revised offered in AO-13 were superseded by revised Interagency Appraisal and Evaluation Guidelines Interagency Appraisal and Evaluation Guidelines issued on December 2, 2010. As a result, the ASB issued on December 2, 2010. As a result, the ASB will be working with the Interagency Work Group to will be working with the Interagency Work Group to update AO-13 to provide meaningful guidance on update AO-13 to provide meaningful guidance on this more recent edition of the guidelines. this more recent edition of the guidelines.
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 66
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-25Section 1-25
Changes to USPAPChanges to USPAP
G.G. Other changes to USPAPOther changes to USPAP4.4. Advisory Opinion 13 (AO-13) (cont’d)Advisory Opinion 13 (AO-13) (cont’d)
a.a. The ASB intends to expose proposed revisions The ASB intends to expose proposed revisions to AO-13 as soon as possible, and expects to to AO-13 as soon as possible, and expects to issue an updated version of AO-13 prior to the issue an updated version of AO-13 prior to the effective date of the next edition of USPAP effective date of the next edition of USPAP (January 1, 2014)(January 1, 2014)
b.b. Appraisers, in the interim, are urged to review Appraisers, in the interim, are urged to review the revised guidelines on The Appraisal the revised guidelines on The Appraisal Foundation’s websiteFoundation’s website
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 67
Rationale of the 2012-2013 ChangesRationale of the 2012-2013 Changes
Section 1-25Section 1-25
Changes to USPAPChanges to USPAP
1)1) Robert Agent is an individual who provides Robert Agent is an individual who provides both brokerage and appraisal services. What both brokerage and appraisal services. What are Robert’s obligations under USPAP when are Robert’s obligations under USPAP when preparing a broker’s price opinion (BPO)?preparing a broker’s price opinion (BPO)?
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 68
In the Real WorldIn the Real World
Section 1-26Section 1-26
Changes to USPAPChanges to USPAP
2)2) A client has asked Mike Black to perform a A client has asked Mike Black to perform a rent survey. The client owns the Acme Office rent survey. The client owns the Acme Office Building and wants to know if he is charging Building and wants to know if he is charging enough rent. The client asked Mike to enough rent. The client asked Mike to perform this work because he knows Mike is perform this work because he knows Mike is an appraiser; therefore, this valuation service an appraiser; therefore, this valuation service is included in appraisal practice and USPAP is included in appraisal practice and USPAP applies. How can Mike provide this service applies. How can Mike provide this service in compliance with USPAP?in compliance with USPAP?
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In the Real WorldIn the Real World
Section 1-26Section 1-26
Changes to USPAPChanges to USPAP
3)3) Dan Williams is an appraiser. He was asked Dan Williams is an appraiser. He was asked by a client to perform an “administrative by a client to perform an “administrative screening review” of an appraisal report to screening review” of an appraisal report to determine if a more thorough review is determine if a more thorough review is warranted. The client would like Dan to warranted. The client would like Dan to check the math calculations and determine check the math calculations and determine whether the appraisal report complies with whether the appraisal report complies with the client’s basic content specifications. the client’s basic content specifications. What are Dan’s obligations under USPAP?What are Dan’s obligations under USPAP?
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 70
In the Real WorldIn the Real World
Section 1-27Section 1-27
Changes to USPAPChanges to USPAP
4)4) Marie Vaughn has a diverse practice that Marie Vaughn has a diverse practice that includes specialized litigation services. She includes specialized litigation services. She commonly aids attorneys in developing commonly aids attorneys in developing cross-examination strategies for expert cross-examination strategies for expert witness testimony from appraisers. How witness testimony from appraisers. How does USPAP apply to Marie’s “litigation does USPAP apply to Marie’s “litigation services”?services”?
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In the Real WorldIn the Real World
Section 1-27Section 1-27
Changes to USPAPChanges to USPAP
5)5) A client feels that her property is over A client feels that her property is over assessed by the county. She’s asked me to assessed by the county. She’s asked me to perform a tax consulting service that involves perform a tax consulting service that involves advocacy for her position and I’d like to advocacy for her position and I’d like to charge her on a contingency fee basis. This charge her on a contingency fee basis. This assignment would not include an appraisal. I assignment would not include an appraisal. I have two questions: Is this service allowed have two questions: Is this service allowed under USPAP? If not, can I perform this under USPAP? If not, can I perform this assignment outside of USPAP?assignment outside of USPAP?
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In the Real WorldIn the Real World
Section 1-28Section 1-28
Changes to USPAPChanges to USPAP
6)6) I’m a personal property appraiser and I’ve I’m a personal property appraiser and I’ve been asked to donate my professional been asked to donate my professional services to help raise funds for a charitable services to help raise funds for a charitable organization. The charity wants to hold an organization. The charity wants to hold an event where individuals can bring in their event where individuals can bring in their personal property items and, for a nominal personal property items and, for a nominal fee that is paid to the charity, receive an oral fee that is paid to the charity, receive an oral report of my opinion as to the value of their report of my opinion as to the value of their item(s). item(s).
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In the Real WorldIn the Real World
Section 1-28Section 1-28
Changes to USPAPChanges to USPAP
6)6) (cont’d) This appears to be similar to (cont’d) This appears to be similar to television shows where people bring in their television shows where people bring in their personal items to be valued. If I decide to personal items to be valued. If I decide to participate, would my opinions be participate, would my opinions be considered appraisals and, if so, how could I considered appraisals and, if so, how could I comply with USPAP in performing these comply with USPAP in performing these assignments?assignments?
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In the Real WorldIn the Real World
Section 1-28Section 1-28
Section TwoSection Two
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 75
Review of SCOPE OF WORK RULEReview of SCOPE OF WORK RULEand USPAP Appliedand USPAP Applied
to Real World Examplesto Real World Examples
SCOPE OF WORK RULESCOPE OF WORK RULE
A.A. Three sections to the RuleThree sections to the Rule1.1. Problem identificationProblem identification2.2. Scope of work acceptabilityScope of work acceptability3.3. Disclosure obligationsDisclosure obligations
B.B. Scope of work – generalScope of work – general1.1. Scope of work includes, but is not limited toScope of work includes, but is not limited to
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Review of RuleReview of Rule
Section 2-31Section 2-31
a. The extent to which the property is identifiedb. The extent to which tangible property is
inspectedc. The type and extent of data researchedd. The type and extent of analyses applied to
arrive at opinions or conclusions
a. The extent to which the property is identifiedb. The extent to which tangible property is
inspectedc. The type and extent of data researchedd. The type and extent of analyses applied to
arrive at opinions or conclusions
SCOPE OF WORK RULESCOPE OF WORK RULE
2.2. Appraisers have broad flexibility and Appraisers have broad flexibility and significant responsibility in determining significant responsibility in determining the appropriate scope of work in an the appropriate scope of work in an assignmentassignment
3.3. Credible assignment results require Credible assignment results require support by relevant evidence and logicsupport by relevant evidence and logic
4.4. The credibility of assignment results is The credibility of assignment results is measured in the context of the intended measured in the context of the intended useuse
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Problem IdentificationProblem Identification
Section 2-31Section 2-31
SCOPE OF WORK RULESCOPE OF WORK RULE
© 2012 by © 2012 by The Appraisal FoundationThe Appraisal Foundation 78
Problem IdentificationProblem Identification
Section 2-32Section 2-32
A.A. Common assignment elements are addressed Common assignment elements are addressed in problem identification (see applicable in problem identification (see applicable Standards Rules – SR 1-2, SR 3-2, SR 4-2, SR 6-Standards Rules – SR 1-2, SR 3-2, SR 4-2, SR 6-2, SR 7-2, and SR 9-2). 2, SR 7-2, and SR 9-2). For example, in an appraisal, identification of For example, in an appraisal, identification of the problem to be solved requires the the problem to be solved requires the appraiser to identify the following assignment appraiser to identify the following assignment elements:elements:
1.1. Client and any other intended usersClient and any other intended users2.2. Intended use of the appraiser’s opinions Intended use of the appraiser’s opinions
and conclusionsand conclusions3.3. Type and definition of valueType and definition of value4.4. Effective date of the appraiser’s opinions Effective date of the appraiser’s opinions
and conclusionsand conclusions5.5. Subject of the assignment and its relevant Subject of the assignment and its relevant
characteristicscharacteristics6.6. Assignment conditionsAssignment conditions
1.1. Client and any other intended usersClient and any other intended users2.2. Intended use of the appraiser’s opinions Intended use of the appraiser’s opinions
and conclusionsand conclusions3.3. Type and definition of valueType and definition of value4.4. Effective date of the appraiser’s opinions Effective date of the appraiser’s opinions
and conclusionsand conclusions5.5. Subject of the assignment and its relevant Subject of the assignment and its relevant
characteristicscharacteristics6.6. Assignment conditionsAssignment conditions
SCOPE OF WORK RULESCOPE OF WORK RULE
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Problem IdentificationProblem Identification
Section 2-32Section 2-32
B.B. Assignment elements provide an appraiser with Assignment elements provide an appraiser with the basis for determining type and extent of the basis for determining type and extent of research and analyses to include in the research and analyses to include in the development of an appraisal. (Similar development of an appraisal. (Similar information is also necessary in appraisal review information is also necessary in appraisal review and appraisal consulting assignments.)and appraisal consulting assignments.)
C.C. Requires communication with client to establish Requires communication with client to establish most of the information necessary; however, most of the information necessary; however, identification of relevant characteristics is a identification of relevant characteristics is a judgment made by the appraiser that requires judgment made by the appraiser that requires competencycompetency
SCOPE OF WORK RULESCOPE OF WORK RULE
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Problem IdentificationProblem Identification
Section 2-32Section 2-32
D.D. Assignment conditions includeAssignment conditions include1.1. AssumptionsAssumptions2.2. Extraordinary assumptionsExtraordinary assumptions3.3. Hypothetical conditionsHypothetical conditions4.4. Laws and regulationsLaws and regulations5.5. Jurisdictional exceptionsJurisdictional exceptions6.6. Other conditions that affect the scope of Other conditions that affect the scope of
work work
SCOPE OF WORK RULESCOPE OF WORK RULE
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AcceptabilityAcceptability
Section 2-33Section 2-33
A.A. Scope of work is acceptable when it meets or Scope of work is acceptable when it meets or exceeds:exceeds:1.1. Expectations of parties who are regularly Expectations of parties who are regularly
intended users for similar assignments intended users for similar assignments andand2.2. What an appraiser’s peers’ actions would What an appraiser’s peers’ actions would
be in performing the same or a similar be in performing the same or a similar assignmentassignment
SCOPE OF WORK RULESCOPE OF WORK RULE
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AcceptabilityAcceptability
Section 2-33Section 2-33
B.B. ProcessProcess1.1. Determining scope of work is an ongoing process Determining scope of work is an ongoing process
during the assignmentduring the assignment2.2. Information or conditions discovered during the Information or conditions discovered during the
assignment might necessitate reconsidering the assignment might necessitate reconsidering the scope of workscope of work
3.3. An appraiser must be prepared to support the An appraiser must be prepared to support the exclusion of any investigation, information, exclusion of any investigation, information, method, or technique that would appear relevant method, or technique that would appear relevant to the client, another intended user, or the to the client, another intended user, or the appraiser’s peersappraiser’s peers
SCOPE OF WORK RULESCOPE OF WORK RULE
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AcceptabilityAcceptability
Section 2-33Section 2-33
C.C. Assignment conditionsAssignment conditions1.1. An appraiser must not allow assignment An appraiser must not allow assignment
conditions to limit the scope of work to such a conditions to limit the scope of work to such a degree that assignment results are not degree that assignment results are not credible in the context of the intended usecredible in the context of the intended use
2.2. An appraiser must withdraw from an An appraiser must withdraw from an assignment if relevant information is not assignment if relevant information is not available because assignment conditions limit available because assignment conditions limit research opportunities, unless the appraiser research opportunities, unless the appraiser cancan
a.a. Modify assignment conditions to Modify assignment conditions to expand the scope of work to include expand the scope of work to include gathering the information orgathering the information or
b.b. Use an extraordinary assumption about Use an extraordinary assumption about such information if credible assignment such information if credible assignment results can still be developedresults can still be developed
a.a. Modify assignment conditions to Modify assignment conditions to expand the scope of work to include expand the scope of work to include gathering the information orgathering the information or
b.b. Use an extraordinary assumption about Use an extraordinary assumption about such information if credible assignment such information if credible assignment results can still be developedresults can still be developed
3.3. An appraiser must not allow the An appraiser must not allow the intended use of an assignment or a intended use of an assignment or a client’s objectives to cause the client’s objectives to cause the assignment results to be biasedassignment results to be biased
3.3. An appraiser must not allow the An appraiser must not allow the intended use of an assignment or a intended use of an assignment or a client’s objectives to cause the client’s objectives to cause the assignment results to be biasedassignment results to be biased
SCOPE OF WORK RULESCOPE OF WORK RULE
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A.A. Report must contain sufficient information to Report must contain sufficient information to allow intended users to understand the scope of allow intended users to understand the scope of the work performedthe work performed
B.B. This includes disclosure of research and analyses This includes disclosure of research and analyses performed and might include disclosure of performed and might include disclosure of research and analyses not performedresearch and analyses not performed
C.C. There is no requirement for the scope of work to There is no requirement for the scope of work to be in a defined, specific or separate section of be in a defined, specific or separate section of the reportthe report
SCOPE OF WORK RULESCOPE OF WORK RULE
1)1) I am a residential appraiser performing work for I am a residential appraiser performing work for several Appraisal Management Companies. several Appraisal Management Companies. Often I am asked to perform an appraisal Often I am asked to perform an appraisal assignment outside the areas I am most familiar assignment outside the areas I am most familiar with. The assignments come with a with. The assignments come with a requirement that a completed report be requirement that a completed report be submitted within 48 hours or less. This time submitted within 48 hours or less. This time frame does not permit me to adequately frame does not permit me to adequately research the subject property market. Is it research the subject property market. Is it permissible for me to accept an assignment permissible for me to accept an assignment under these conditions? under these conditions?
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2)2) An appraiser completed an appraisal for An appraiser completed an appraisal for Client A. Client B received a copy of the Client A. Client B received a copy of the appraisal from Client A and finds it appraisal from Client A and finds it acceptable for their purposes, but wants to acceptable for their purposes, but wants to be identified as the client in the appraisal be identified as the client in the appraisal report. Client B is aware that appraisers are report. Client B is aware that appraisers are prohibited from readdressing (or prohibited from readdressing (or transferring) a completed report to a transferring) a completed report to a different client’s name. different client’s name.
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2)2) (cont’d) As a result, Client B would like to (cont’d) As a result, Client B would like to engage the appraiser in a new assignment, engage the appraiser in a new assignment, limiting the appraiser’s scope of work to only limiting the appraiser’s scope of work to only identifying them as the new client. Can the identifying them as the new client. Can the appraiser complete the assignment from appraiser complete the assignment from Client B under these terms?Client B under these terms?
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3)3) In the SCOPE OF WORK RULE, one of the two In the SCOPE OF WORK RULE, one of the two tests regarding the acceptability of an tests regarding the acceptability of an appraiser’s scope of work is what the appraiser’s scope of work is what the appraiser’s peers would do. There are many appraiser’s peers would do. There are many appraisers that do things differently, so how appraisers that do things differently, so how would I know what they would do in an would I know what they would do in an assignment?assignment?
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4)4) Can an appraisal, appraisal review, or Can an appraisal, appraisal review, or appraisal consulting assignment include appraisal consulting assignment include more than one intended use?more than one intended use?
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5)5) Why are appraisers required to report the Why are appraisers required to report the scope of work in an appraisal, appraisal scope of work in an appraisal, appraisal review, or appraisal consulting report?review, or appraisal consulting report?
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6)6) AO-26 and AO-27 clarify that I cannot AO-26 and AO-27 clarify that I cannot readdress an appraisal, and I must treat a readdress an appraisal, and I must treat a subsequent request as a new assignment. subsequent request as a new assignment. Does that mean I must start from scratch Does that mean I must start from scratch since I would be performing a new since I would be performing a new assignment for a different client? Must I re-assignment for a different client? Must I re-inspect the property?inspect the property?
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7)7) I have been asked to perform an appraisal I have been asked to perform an appraisal involving proposed improvements. The involving proposed improvements. The client has indicated that plans and specs client has indicated that plans and specs have not been finalized. Does USPAP require have not been finalized. Does USPAP require me to review the plans and specifications me to review the plans and specifications prior to completing this assignment?prior to completing this assignment?
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8)8) I am valuing a controlling interest in a I am valuing a controlling interest in a business enterprise by use of an asset-based business enterprise by use of an asset-based (cost) approach, and that business owns real (cost) approach, and that business owns real property. Am I required to have an appraisal property. Am I required to have an appraisal of the real property or may I use other of the real property or may I use other indications of the real property value?indications of the real property value?
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9)9) A client has asked me to disregard any A client has asked me to disregard any foreclosure, real estate owned (REO), or foreclosure, real estate owned (REO), or short sales when performing market value short sales when performing market value appraisal assignments. Is this an acceptable appraisal assignments. Is this an acceptable assignment condition?assignment condition?
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10)10) What is the difference between exposure What is the difference between exposure time and marketing time?time and marketing time?
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11)11) I live and work just outside an area that I live and work just outside an area that was devastated by a catastrophic weather was devastated by a catastrophic weather event. My market area experienced event. My market area experienced sudden changes in supply and demand, sudden changes in supply and demand, and real estate sales prices climbed rapidly and real estate sales prices climbed rapidly for a period of time following the disaster. for a period of time following the disaster. Does USPAP provide advice to real estate Does USPAP provide advice to real estate appraisers on how to handle sudden appraisers on how to handle sudden market changes brought about by such market changes brought about by such catastrophic events?catastrophic events?
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12)12) The real estate market I appraise in has The real estate market I appraise in has slowed down over the last 12 to 18 slowed down over the last 12 to 18 months, and it is now extremely common months, and it is now extremely common to see seller concessions as part of a to see seller concessions as part of a purchase transaction. What are the USPAP purchase transaction. What are the USPAP requirements regarding proper treatment requirements regarding proper treatment of sales/financing concessions?of sales/financing concessions?
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13)13) I have a client that just wants me to I have a client that just wants me to provide comps from a neighborhood. Are provide comps from a neighborhood. Are there any USPAP requirements I must there any USPAP requirements I must comply with to perform this task?comply with to perform this task?
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14)14) I was recently contacted by a client for I was recently contacted by a client for whom I had previously completed an whom I had previously completed an appraisal. The client asked if I could simply appraisal. The client asked if I could simply tell them whether there have been tell them whether there have been changes in the market, or not, since the changes in the market, or not, since the time of my appraisal, and that the value of time of my appraisal, and that the value of the property remains the same. Am I the property remains the same. Am I permitted to do this under USPAP?permitted to do this under USPAP?
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15)15) I have completed an appraisal assignment I have completed an appraisal assignment for a client. The report was completed for a client. The report was completed using the 2005 version of the Uniform using the 2005 version of the Uniform Residential Appraisal Report (URAR). The Residential Appraisal Report (URAR). The client has requested that I remove one of client has requested that I remove one of the comparable properties from the report the comparable properties from the report because, in the underwriter’s opinion, it is because, in the underwriter’s opinion, it is not sufficiently similar to the subject not sufficiently similar to the subject property. If I do this, will my action comply property. If I do this, will my action comply with USPAP?with USPAP?
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16)16) I am completing an appraisal assignment in I am completing an appraisal assignment in which I was engaged by an Appraisal which I was engaged by an Appraisal Management Company (AMC) on behalf of a Management Company (AMC) on behalf of a lender. The AMC has asked me to collect a fee lender. The AMC has asked me to collect a fee from the prospective borrower. I am to retain from the prospective borrower. I am to retain my portion of the total amount collected as my portion of the total amount collected as the fee for my appraisal services, and forward the fee for my appraisal services, and forward the balance to the AMC. The AMC requires the balance to the AMC. The AMC requires that there is to be no disclosure in the report that there is to be no disclosure in the report of the total fee, nor of the manner in which of the total fee, nor of the manner in which the fee is to be split. Does USPAP permit this the fee is to be split. Does USPAP permit this type of fee arrangement?type of fee arrangement?
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17)17) I am a personal property appraiser that I am a personal property appraiser that specializes in the appraisal of coins and specializes in the appraisal of coins and currency. I am required, by federal law, to currency. I am required, by federal law, to report United States counterfeit coins and report United States counterfeit coins and currency to the U.S. Secret Service. In currency to the U.S. Secret Service. In reporting these counterfeit coins and reporting these counterfeit coins and currency, I am also required under federal law currency, I am also required under federal law to provide them with the name and contact to provide them with the name and contact information of my client. Would disclosing my information of my client. Would disclosing my client’s name under these circumstances be a client’s name under these circumstances be a jurisdictional exception under USPAP?jurisdictional exception under USPAP?
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18)18) I am aware that development of an opinion of I am aware that development of an opinion of market value also requires development of an market value also requires development of an opinion of reasonable exposure time linked to opinion of reasonable exposure time linked to the value opinion. The assignment I am the value opinion. The assignment I am working on has an assignment condition working on has an assignment condition under the Uniform Appraisal Standards for under the Uniform Appraisal Standards for Land Acquisitions (the Yellow Book) that Land Acquisitions (the Yellow Book) that requires me to disregard any decrease or requires me to disregard any decrease or increase in market value of the property prior increase in market value of the property prior to the effective date of value that is caused by to the effective date of value that is caused by the public improvement for which the the public improvement for which the property is being acquired. (cont’d)property is being acquired. (cont’d)
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18)18) (cont’d) My research indicates the time (cont’d) My research indicates the time frames of buyers and sellers are often frames of buyers and sellers are often influenced by pending public improvement influenced by pending public improvement projects. Does this requirement represent projects. Does this requirement represent a jurisdictional exception?a jurisdictional exception?
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19)19) I am aware of some appraisers who I am aware of some appraisers who perform property tax assessment appeal perform property tax assessment appeal assignments where their fee is based on a assignments where their fee is based on a percentage of the tax savings to the percentage of the tax savings to the property owner. Doesn’t USPAP prohibit property owner. Doesn’t USPAP prohibit appraisers from accepting assignments appraisers from accepting assignments where the fee is based on a specific where the fee is based on a specific outcome?outcome?
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20)20) I occasionally receive requests to appraise I occasionally receive requests to appraise a property that I have appraised in the a property that I have appraised in the past. Since the ETHICS RULE requires me to past. Since the ETHICS RULE requires me to disclose any assignments that I performed disclose any assignments that I performed within the three years prior to the date of within the three years prior to the date of acceptance of the assignment, isn’t such a acceptance of the assignment, isn’t such a disclosure a violation of an appraiser’s disclosure a violation of an appraiser’s responsibility under the responsibility under the ConfidentialityConfidentiality section of the ETHICS RULE?section of the ETHICS RULE?
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21)21) The The ConductConduct section of the ETHICS RULE section of the ETHICS RULE requires the appraiser to disclose, prior to requires the appraiser to disclose, prior to engagement in the assignment, any engagement in the assignment, any services performed on the subject property services performed on the subject property within the prior three-year period. within the prior three-year period. Following is a series of services. Which of Following is a series of services. Which of the following series of services require the following series of services require disclosure by the appraiser if they were disclosure by the appraiser if they were performed within the three-year period? performed within the three-year period?
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21)21) A) If I performed an appraisal that was A) If I performed an appraisal that was “subject to” completion of repairs, and “subject to” completion of repairs, and subsequently received a request to subsequently received a request to perform a “final inspection” confirming perform a “final inspection” confirming that the work had been completed, am I that the work had been completed, am I required to disclose that I previously required to disclose that I previously appraised the property even if it is obvious appraised the property even if it is obvious to the client that I’ve done so?to the client that I’ve done so?
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21)21) B) If I perform an appraisal and use a B) If I perform an appraisal and use a property as one of my comparable sales, property as one of my comparable sales, and later receive a request to appraise the and later receive a request to appraise the property was used as a comparable sale, property was used as a comparable sale, must I disclose that I “performed a service” must I disclose that I “performed a service” on that property because I used it as a on that property because I used it as a comparable sale?comparable sale?
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21)21) C) I am involved in many aspects of the real C) I am involved in many aspects of the real estate industry. As such, I “perform estate industry. As such, I “perform services” on a great number of properties services” on a great number of properties in many different ways. It would be very in many different ways. It would be very difficult for me to recall each and every difficult for me to recall each and every property I’ve performed services on in a property I’ve performed services on in a three-year period. Is it permissible to three-year period. Is it permissible to comply with the disclosure requirements comply with the disclosure requirements by saying something to the effect of “To by saying something to the effect of “To the best of my knowledge?”the best of my knowledge?”
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21)21) D) I perform residential real estate D) I perform residential real estate appraisals using “standard” pre-printed appraisals using “standard” pre-printed appraisal forms, such as those developed appraisal forms, such as those developed by Fannie Mae. I’ve heard that Fannie Mae by Fannie Mae. I’ve heard that Fannie Mae does not allow any changes to their does not allow any changes to their certifications, so how can I comply with the certifications, so how can I comply with the USPAP requirement to disclose, in the USPAP requirement to disclose, in the certification, any prior services I have or certification, any prior services I have or have not performed on the property within have not performed on the property within the prior three years?the prior three years?
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22)22) I am concerned that when I tell a I am concerned that when I tell a prospective client that I have previously prospective client that I have previously provided a service related to a property, it provided a service related to a property, it will lead to questions that I cannot answer will lead to questions that I cannot answer without violating the without violating the ConfidentialityConfidentiality section of the ETHICS RULE. I am sure the section of the ETHICS RULE. I am sure the new client will want to know when I new client will want to know when I appraised it and what my value conclusions appraised it and what my value conclusions had been. How can I address these had been. How can I address these questions and comply with USPAP?questions and comply with USPAP?
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23)23) The real property that I am appraising The real property that I am appraising involves proposed improvements, and the involves proposed improvements, and the client needs to know my opinion of market client needs to know my opinion of market value as if the proposed improvements are value as if the proposed improvements are complete, both as of the current date and complete, both as of the current date and as of a future date. I have two questions: as of a future date. I have two questions: 1) When the date of value is a current date, 1) When the date of value is a current date, is my opinion developed on the basis of a is my opinion developed on the basis of a hypothetical condition or an extraordinary hypothetical condition or an extraordinary assumption? assumption?
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23)23) (Cont’d)(Cont’d)2) When the date of value is a future date, 2) When the date of value is a future date, when the proposed improvements will be when the proposed improvements will be complete, is my opinion developed on the complete, is my opinion developed on the basis of a hypothetical condition or an basis of a hypothetical condition or an extraordinary assumption?extraordinary assumption?
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24)24) I have been engaged to perform a real I have been engaged to perform a real property valuation assignment. The property valuation assignment. The assignment is to develop an opinion of the assignment is to develop an opinion of the market value of the subject property in its market value of the subject property in its current “as-is” condition. USPAP states, current “as-is” condition. USPAP states, Current appraisals occur when the effective Current appraisals occur when the effective date of the appraisal is contemporaneous date of the appraisal is contemporaneous with the date of the report. In this context, with the date of the report. In this context, what defines contemporaneous with the what defines contemporaneous with the date of the report?date of the report?
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25)25) May I perform an appraisal with multiple May I perform an appraisal with multiple intended uses and communicate the intended uses and communicate the results in a single report with a single results in a single report with a single valuation and be in compliance with valuation and be in compliance with USPAP? All of the intended uses have the USPAP? All of the intended uses have the same type and definition of value and were same type and definition of value and were performed with the same scope of work.performed with the same scope of work.
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26)26) If an appraiser is bound by USPAP for a If an appraiser is bound by USPAP for a particular assignment, when must the particular assignment, when must the appraiser comply with USPAP appraisal appraiser comply with USPAP appraisal reporting requirements?reporting requirements?
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27)27) I was recently told that USPAP allows I was recently told that USPAP allows appraisers to wait and create a workfile appraisers to wait and create a workfile after the report has been delivered to the after the report has been delivered to the client for an appraisal, appraisal review, or client for an appraisal, appraisal review, or appraisal consulting assignment. Is this appraisal consulting assignment. Is this true?true?
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28)28) I am a research assistant with an appraisal firm that I am a research assistant with an appraisal firm that has three state certified or licensed real property has three state certified or licensed real property appraisers. My responsibilities include preparing appraisers. My responsibilities include preparing an appraisal file on each new assignment, an appraisal file on each new assignment, researching past sales of the subject, obtaining researching past sales of the subject, obtaining zoning information, tax data, market information zoning information, tax data, market information and sales research (including confirming the sales) and sales research (including confirming the sales) for three associates. The licensed or certified for three associates. The licensed or certified appraisers usually inspect the property and prepare appraisers usually inspect the property and prepare the appraisal themselves. Currently, they do not the appraisal themselves. Currently, they do not recognize me in these reports, and I am not recognize me in these reports, and I am not permitted to sign them. (cont’d)permitted to sign them. (cont’d)
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28)28) I also sometimes go with them on inspections I also sometimes go with them on inspections and write portions of the reports. In these and write portions of the reports. In these cases they do recognize me, as required by cases they do recognize me, as required by USPAP. I am concerned about receiving USPAP. I am concerned about receiving experience credit for all my appraisal experience credit for all my appraisal assistance from my state’s appraiser licensing assistance from my state’s appraiser licensing board or a professional association if I apply board or a professional association if I apply for a designation. Should my participation be for a designation. Should my participation be referenced in all the reports when I provide referenced in all the reports when I provide assistance, or only when I inspect the assistance, or only when I inspect the property and write portions of the report?property and write portions of the report?
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29)29) I am aware that STANDARDS 4 and 5 in I am aware that STANDARDS 4 and 5 in USPAP apply to real property appraisal USPAP apply to real property appraisal consulting, but which Standards apply to consulting, but which Standards apply to personal property appraisal consulting?personal property appraisal consulting?
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30)30) An appraiser receives a request to review An appraiser receives a request to review an appraisal; however, the reviewer has an appraisal; however, the reviewer has previously appraised the same property. previously appraised the same property. Does the reviewer’s prior experience with Does the reviewer’s prior experience with the property create a bias that then the property create a bias that then precludes an objective review?precludes an objective review?
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Thank-you!Thank-you!
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