The Appraisal foundation and the Appraisal Standards Board has just released a summary of action noting the changes in the upcoming USPAP 2020-2021 edition.
All personal property appraisers should be aware of the upcoming changes. There are some interesting changes such as additional intended users on restricted appraisal reports and "enumerate and clarify the minimum level of reporting necessary under the reporting requirements for an Appraisal Report in STANDARDS 2, 8, and 10."
Take a few minutes to review and then visit the AF website and read the most recent accepted exposure draft.
The AF and ASB reports
Source: The Appraisal FoundationAPPRAISAL STANDARDS BOARD 2019 SUMMARY OF ACTIONS RELATED TO USPAP CHANGES
April 17, 2019
On April 5, 2019, the Appraisal Standards Board (ASB) adopted modifications to the Uniform Standards of Professional Appraisal Practice (USPAP). This action began in earnest with the issuance of a Discussion Draft in January 2018, followed by four exposure drafts with specific proposed revisions to USPAP. Written comments were received in response to each document, and oral comments were provided at each of four public meetings. Each member of the ASB read and carefully considered every comment. Based on the feedback received, the Board adopted revisions for the 2020-21 edition of USPAP.
The following changes were adopted by the Board in a public meeting on April 5, 2019, and will be incorporated in the 2020-21 edition of USPAP and associated guidance material with an effective date of January 1, 2020:
Revisions to the Standards regarding reporting options and Comments in Standards Rules
The Board adopted revisions to permit additional intended users besides the client for Restricted Appraisal Reports, as long as the other intended users are named in the report (i.e., not merely identified “by type”). The second adopted change for Restricted Appraisal Reports is a simplification of warning language that will no longer include a reference to the appraiser’s workfile.
The Board also adopted revisions to Standards Rules 2-3 and 4-3 to address situations where an assignment requires the use of a certification that does not include all of the certification elements in the respective Standards Rule. In such cases an appraiser is required to include a supplemental certification, which includes the remaining required certification elements. Notably, the Board is also clarifying that such supplemental certifications do not require signature by the appraiser(s). The Board also adopted revisions to enumerate and clarify the minimum level of reporting necessary under the reporting requirements for an Appraisal Report in STANDARDS 2, 8, and 10.
The Board voted to delete some Comments that had redundant requirements clearly stated elsewhere, and to incorporate other Comments directly into the Standards Rules. In some cases, Comments were retained to provide interpretation and/or establish the context and conditions for the application of Standards Rules.
The Board also adopted labels for each Standards Rule in order to make it easier for users to locate specific rule content in the document.
Revision of SCOPE OF WORK RULE
The Board adopted revisions to add language to the Disclosure Obligations section of the SCOPE OF WORK RULE to address the flexibility afforded the appraiser in the disclosure of scope of work.
Revisions to COMPETENCY RULE
The Board revised the “Perfection is impossible to attain...” Comment in Standards Rules 1-1, 3- 1, 5-1, 7-1, and 9-1, and moved it into to the COMPETENCY RULE. Moving the Comment into the COMPETENCY RULE reduces duplication and, at the same time, broadens the applicability since the COMPETENCY RULE applies to both development and reporting in all disciplines.
Revisions to DEFINITIONS
The Board adopted some modifications and additions to the DEFINITIONS in order to help readers better understand USPAP. The Board adopted changes to the definitions of APPRAISAL, APPRAISAL PRACTICE, APPRAISAL REVIEW, APPRAISER, ASSIGNMENT CONDITIONS, ASSIGNMENT RESULTS, CLIENT, COST, EXPOSURE TIME, MARKET VALUE, PERSONAL PROPERTY, REAL PROPERTY, VALUATION SERVICE, VALUE and WORKFILE.
The Board also adopted new definitions for the terms ASSIGNMENT ELEMENTS, EFFECTIVE DATE, MISLEADING, PERSONAL INSPECTION, PHYSICAL CHARACTERISTICS, and
RELEVANT CHARACTERISTICS, to help clarify how each term is used in USPAP.
Other Edits to Improve Clarity and Enforceability of USPAP
The Board adopted changes related to the phrases “accept an assignment” and “intangible items.” The edits are intended to improve clarity and consistency.
Revisions to ADVISORY OPINION 1, Sales History
The Board adopted revisions to Advisory Opinion 1, Sales History, to provide additional detail and illustrations related to an appraiser’s obligation to analyze the listing, contract, and sales history of the subject property.
Revisions to ADVISORY OPINION 2, Inspection of Subject Property
The Board adopted revisions to Advisory Opinion 2, Inspection of Subject Property, to provide guidance and illustrations reflecting changes in the marketplace related to an appraiser’s inspection of a property.
Revisions to ADVISORY OPINION 3, Update of a Prior Appraisal
The Board adopted revisions to Advisory Opinion 3, Update of a Prior Appraisal, to clarify an appraiser’s obligations regarding confidentiality when performing an update of an appraisal using the “incorporate by reference” option.
Revisions to ADVISORY OPINION 28, Scope of Work Decision, Performance, and Disclosure
The Board adopted revisions to Advisory Opinion 28, Scope of Work Decisions, Performance, and Disclosure, including a new Illustration 2 regarding a scope of work problem related to tangible personal property, and adding an additional illustration regarding a scope of work problem related to real property.
Revisions to ADVISORY OPINION 31, Assignments Involving More than One Appraiser
The Board adopted revisions to Advisory Opinion 31, Assignments Involving More than One Appraiser, to help clarify guidance related to significant appraisal assistance and Standards Rules 2-3, 4-3, 6-3, 8-3, and 10-3.
Revisions to ADVISORY OPINION 32, Ad Valorem Property Tax Appraisal and Mass Appraisal Assignments
The Board adopted revisions to Advisory Opinion 32, Ad Valorem Property Tax Appraisal and Mass Appraisal Assignments, that adds a new Illustration 5 on the topic of an appraiser’s obligations regarding the quantity and quality of factual data collected in a mass appraisal assignment.
Revisions to ADVISORY OPINION 36, Identification and Disclosure of Client, Intended Use, and Intended Users
The Board adopted revisions to Advisory Opinion 36, Identification and Disclosure of Client, Intended Use, and Intended Users, to clarify an appraiser’s requirement to make a proper disclosure of the client and any other intended users in an Appraisal Report or Restricted Appraisal Report, particularly in cases where the client has requested anonymity in the report.
Creation of ADVISORY OPINION 38, Content of an Appraisal Report and Restricted Appraisal Report
The Board adopted newly-created Advisory Opinion 38, Content of an Appraisal Report and Restricted Appraisal Report. The new Advisory Opinion compares the reporting requirements under the revised Appraisal Report and Restricted Appraisal Report options, and replaces the prior guidance offered in Advisory Opinions 11 and 12.
Retirement of ADVISORY OPINION 4, Standards Rule 1-5(b); ADVISORY OPINION 11, Content of the Appraisal Report Options of Standards Rules 2-2, 8-2, and 10-2; and ADVISORY OPINION 12, Use of the Appraisal Report Options of Standards Rules 2-2, 8-2, and 10-2
The Board adopted the retirement of Advisory Opinions 4, 11, and 12. Advisory Opinion 4 was narrowly-focused, and was more appropriately housed where it also currently exists in the USPAP Frequently Asked Questions. As stated above, Advisory Opinions 11 and 12 have been replaced with the newly-created Advisory Opinion 38, Content of an Appraisal Report and Restricted Appraisal Report.
Additional administrative edits will be made to other Advisory Opinions and FAQs for consistency with the adopted changes.
Detailed Adopted Revisions
You can also access the Discussion Draft & Comments, First Exposure Draft & Comments, First Exposure Draft of Advisory Opinions & Comments, Second Exposure Draft & Comments, Third Exposure Draft & Comments, and the Fourth Exposure Draft & Comments by clicking on them. If you are having issues accessing these documents, please contact Aida Dedajic, aida@appraisalfoundation.org. More information on the actions of the ASB can be found on The Appraisal Foundation’s website www.appraisalfoundation.org.
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