USPAP Questions and Answers

Two new USPAP questions and answers have been posted by the appraisal foundation.  Both apply to personal property appraising.  The first pertains to the Ethics rule and conduct, acting as an appraiser, the second on personal property definitions and consulting.

The Q&A are as follows

2012-02: ETHICS RULE – CONDUCT

“Acting as an Appraiser”

Question:

I know that appraisers are prohibited from accepting appraisal assignments in which the fee is contingent upon the attainment of a stipulated result, such as a reduction in property taxes. However, I’ve heard of some appraisers who believe that they are able to accept such assignments, claiming that they are not “acting as an appraiser.” Are these appraisers correct?

Response:

USPAP only applies to individuals when they are performing as an appraiser. If an individual is providing this service in some other role, the individual’s USPAP obligation would be to not misrepresent his or her role. If an individual performs a valuation service which is outside of appraisal practice, he or she may be able to perform such a service without complying with USPAP, subject to applicable laws and regulations. It is extremely important, however, for all state licensed or certified appraisers to fully understand the laws and regulations related to their state appraiser credentials; most states require their credentialed appraisers to comply with USPAP when engaged in appraisal practice, which would prohibit the appraiser from accepting assignments where the fee is contingent upon attainment of a stipulated result.


2012-03: DEFINITIONS

Personal Property Appraisal Consulting

Question:

I am an appraiser who has been asked to perform a consulting service on when and where best to sell some machinery and equipment. I am aware that STANDARDS 4 and 5 relate only to real property appraisal consulting. I have determined that this assignment will require me to estimate probable value ranges in different markets. What are my USPAP obligations?

Response:

Because this assignment will require you to “estimate probable value ranges,” you will be developing appraisals as part of this assignment. These appraisals must be developed in compliance with STANDARD 7 and reported in compliance with STANDARD 8.

There are no development or reporting Standards for personal property appraisal consulting. However, the ETHICS RULE, COMPETENCY RULE and JURISDICTIONAL EXCEPTION RULE apply to all appraisal practice. In addition, the RECORD KEEPING RULE and the SCOPE OF WORK RULE both apply to all appraisal, appraisal review and appraisal consulting assignments. Therefore, all of these Rules apply to personal property appraisal consulting assignments.

Source: The Appraisal Foundation (click to download the Q&As)