Vitale_ci_08

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Changes in USPAP
th
and the 14 Edition
S. Steven Vitale, MAI
[email protected]
262-782-7990
valbridge.com
USPAP Background
• Originally developed in 1986-87
• Goal of USPAP is to promote and maintain a
high level of public trust in appraisal practice
by establishing requirements for appraisers.
• Regular updates intended to improve clarity,
understanding and enforcement of USPAP.
USPAP has 5 Main Sections
1. Definitions
2. Preamble
3. Rules (Ethics, Record Keeping, Competency, Scope of Work
and Jurisdictional Exception)
4. Standards and Standards Rules
5. Statement on Standards
Additional Guidance Items:
– Advisory Opinions
– Frequently Asked Questions (FAQs)
2014-15 USPAP Revisions
1.
2.
3.
4.
5.
6.
7.
8.
9.
Definitions – Assignment Results and Scope of Work
Preamble – When do USPAP Rules and Standards Apply?
Ethics Rule
Competency Rule
Report Options in Standards 2, 8 and 10
Standard Rule 3-5
Retirement of Standards 4 and 5
Revision to Advisory Opinion 11 and 12
Revision to Advisory Opinion 13
1. Revisions to Definitions
Assignment Results
• An appraiser’s opinions and or conclusions developed specific
to an assignment.
Scope of Work
• The type and extent of research and analysis in an appraisal or
appraisal review assignment.
2. Revisions to Preamble
• Edited to more clearly address when USPAP applies and which
parts apply when.
• A section was added titled “When do USPAP Rules and
Standards Apply?”. This includes a bullet list that summarizes
which parts of USPAP apply to which assignments, including
assignments that fall outside of Standards 1 - 10.
3. Revisions to Ethics Rule
• Edited certification requirement related to
current or prospective interest and prior
services.
• In normal appraisal and appraisal review
assignments, a certification is included and
requires disclosure of current or prospective
interest and prior services. For assignments
with no certification, only the initial disclosure
to the client is required.
4. Revisions to Competency Rule
• Competence Rule always required the
appraiser must be competent to perform the
assignment, or acquire the necessary
competency to perform, or withdraw from the
assignment.
• Change in Competence Rule now clearly states
that the appraiser must perform competently
when completing the assignment.
5. Revisions to Report Options
OLD
1. Self-Contained Appraisal
Report
2. Summary Appraisal Report
3. Restricted Use Appraisal
Report
NEW
1. Appraisal Report
2. Restricted Appraisal Report
6. Revisions to St. Rule 3-5
• Standard 3, which relates to appraisal reviews, now requires
to report the following dates:
1.
2.
Date of appraisal review report
Effective date of the appraisal review report
Makes Standard 3 more consistent with Standard 2.
7. Retirement of Standards 4 & 5
• Standards 4 and 5 addressed real property appraisal
consulting development and reporting.
• Retired due to the confusion and misuse of these standards.
• It was determined they were not needed.
• The use of the term “appraisal consulting” has been
eliminated in USPAP.
• Revisions and additional were made to AO 21 to guide
appraisers with regards to unique appraisal services.
• Does not impact the nature of assignments appraisers can do.
• NOTE: Remaining standards were NOT renumbered.
8. Revision to AO 11 and 12
• Advisory Opinion 11 relates to the Content of the Appraisal
Report Options of Standards Rules 2-2 and 8-2 and Advisory
Opinion 12, Use of the Appraisal Report Options of Standards
Rules 3-2 and 8-2.
• Due to the reporting format changes, AO 11 and 12 were
edited to account for these changes.
9. Revision to AO 13
• Advisory Opinion 13 related to Performing Evaluations of Real
Property Collateral to Conform with USPAP.
• Was edited due to changes in the Interagency Appraisal and
Evaluation Guidelines from December 2010.
Other Changes to 2014-15 USPAP
1. Misc. appropriate edits throughout
2. No Statements added or deleted
3. No Advisory Opinions added or deleted
Biggest Impact for
Condemnation Appraisals
• Report format designations
• No more Appraisal Consulting standards
Changes to 14th Edition of
The Appraisal of Real Estate
Published by the Appraisal
Institute (2013)
Changes to the 14th Edition
13th Edition
14th Edition
Changes to the 14th Edition
• Restructured to follow the organization of the
appraisal process, flowing from identification of the
appraisal problem, appraisal development and
reporting results.
• Expanded discussion of Scope of Work, Client
Communication and Data Standards
• Increased emphasis of the fundamentals of statistical
analysis, and the role it plays in market analysis,
highest and best use and the three approaches to
value.
Changes to the 14th Edition
• Expanded coverage of topics introduced in the 13th
Edition including: “green” buildings, advances in
information technology, and the use of AVMs.
• Expanded market analysis process.
• More focused HBU analysis.
• Discussion on evolution of US and international
appraisal standards.
• Limited additional discussion on appraisal review,
consulting, valuation for financial reporting, the
valuation of non-realty assets.
Thank You
S. Steven Vitale, MAI
[email protected]
262-782-7990
valbridge.com
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