The Appraisal Standards Board (ASB) of The Appraisal Foundation has released its Second Exposure Draft of proposed changes for the 2018-2019 edition of the Uniform Standards of Professional Appraisal Practice (USPAP), and is seeking public comments by October 14th. The Draft’s Executive Summary outlines eleven specific sections in question, including:
1) The definition of Report, and edits to the ETHICS RULE and the RECORD KEEPING RULE
The ASB is attempting to resolve issues related to the definition of Report being tied to completion of assignment. The Board is also attempting to clarify requirements for communicating assignment results outside the parameters of a report by proposing revisions to the Conduct section of the ETHICS RULE. Revisions have been proposed for the RECORD KEEPING RULE to address an appraiser’s obligations to maintain such communications. The ASB has proposed language to make it clearer that the work-file must be sufficient for the appraiser to produce an Appraisal Report or an Appraisal Review Report.
2) The definitions of Assignment, Intended Use, and Intended User, as well as related edits to the COMPENTENCY RULE
The ASB has proposed revising the definition of Assignment to remove the portion that involves the agreement to provide services. The Board has also proposed clarifying the definitions of Intended Use and Intended User by substituting “during the assignment” for the current language, “at the time of assignment.” In addition, the ASB also proposed revisions to the COMPETENCY RULE to address the appraiser’s obligations prior to accepting an assignment.
3) The definitions of Assumption and Extraordinary Assumption
The Board has proposed keeping the terms Assumption and Extraordinary Assumption, but has also proposed making revisions to their definitions.
4) STANDARD 3 – Dividing into STANDARD 3, Appraisal Review, Development, and STANDARD 4, Appraisal Review, Reporting
The ASB has proposed revising the definition of Appraisal Review, as well as dividing the existing STANDARD 3 into two separate standards.
5) STANDARD 6 – Dividing into STANDARD 5, Mass Appraisal, Development, and STANDARD 6, Mass Appraisal, Reporting
The Board has proposed revisions to the existing STANDARD 6, which includes dividing it into two separate standards. The ASB has also proposed changes to the current Mass Appraisal Reporting standard to reflect changes that were previously made to other reporting standards when the Self-Contained Appraisal Report option was eliminated.
6) Removing the term Market Value from STANDARDS 7 and 8
The ASB has proposed removing the term ‘Market Value’ from the Personal Property Development and Reporting standards due to its seldom use in this discipline. When necessary for credible results, these proposed changes could lead to additional analysis and reporting requirements for personal property appraisers.
7) Edits to the Personal Property Certification in Standards Rule 8-3
The Board has proposed a change that will allow personal property appraisers—in assignments involving different types of items—to sign the certification without making them accountable for the assignment results of items which they did not appraise.
8) Advisory Opinion 37, Computer Assisted Valuation Tools
The ASB has proposed a new Advisory Opinion to address technology-based tools that are commonly used in the appraisal profession. The Board is also considering whether or not an update of Advisory Opinion 18—“Use of an Automated Model (AVM)”—is necessary, or whether it should just be retired.
9) Illustration in Advisory Opinion 21, USPAP Compliance
The ASB has proposed a revision to the graphics depicted in Advisory Opinion 21 to more clearly illustrate the relationship between appraisal practice and valuation services.
10) Edits to Advisory Opinion 31, Assignments Involving More than One Appraiser
The Board has proposed edits to Advisory Opinion 31 to help clarify guidance related to significant appraisal assistance.
11) Edits to Advisory Opinion 1, Sales History
The ASB has proposed edits to Advisory Opinion 1 to help clarify guidance that’s related to an appraiser’s proper analysis and reporting of a subject property’s prior and pending sales and current listings.
In addition to all the comments received between now and October 14th, The Appraisal Foundation will also accept verbal comments on these proposed changes during its public meeting in Washington D.C. on October 21st.
For more information, or to view the Second Exposure Draft in its entirety, click here.