The Appraisal Standards Board (ASB) of The Appraisal Foundation has officially announced its planned changes for the 2016-2017 Uniform Standards of Professional Appraisal Practice (USPAP), which are set to become effective on January 1, 2016.
There were 11 modifications made to the 2016-2017 USPAP, which came as a direct result of 19 months of discussion, four exposure drafts of proposed revisions, one exposure draft of the proposed new Advisory Opinions, and edits to an existing Advisory Opinion.
Provided below is a brief summary of the most significant changes that were made:
Definition of Assignment Results – The definition of Assignment Results now clarifies that physical characteristics are not assignment results. This means—assuming it is not prohibited by the client—that an appraiser can share information about physical characteristics of the subject property with others without being in violation of the Ethics Rule.
The Confidentiality Section of the Ethics Rule – This section was revised to require an appraiser to take “reasonable steps to safeguard access to confidential information and assignment results by unauthorized individuals”. Appraisers must also ensure that his or her employees, co-workers, subcontractors, and others “are aware of the prohibitions on disclosure of such information or results”.
The Record Keeping Rule – This rule was revised to require an appraiser to retain true copies of all written reports within the work-file. This includes previously transmitted copies of reports that were subsequently revised.
Revision of Standard 3 – Standard 3 was revised to remove the requirement that a reviewer must identify and state the effective date of the appraisal review. As a result, appraisal review reports will only need to specify three dates:
- The date of the work under review
- The effective date of the opinions and conclusions in the work under review
- The date of the review report
Retirement of Statements on Appraisal Standards – The information from the Statements, which was intended to be enforceable, has been moved into the Standards. Likewise, the information that was intended to provide advice and guidance has been made into the following four new Advisory Opinions:
- AO-33: Discounted Cash Flow Analysis
- AO-34: Retrospective and Prospective Value Opinions
- AO-35: Reasonable Exposure Time in Real and Personal Property Opinions of Value
- AO-36: Identification and Disclosure of Client, Intended Use, and Intended Users
For more information and to see the complete breakdown of the 2016-2017 USPAP revisions, check out The Appraisal Foundation’s 2015 Summary of Actions Related to Proposed USPAP Changes.