Comments on the proposed changes to the 2022-23 USPAP are needed. The proposed changes to the reporting requirement of Standard 2 may impact the profession negatively and confuse the public on who we are and what we do. We ask that each and every one of you pause for a moment and comment by July 30th. Below is what was sent out to the Arizona Association of Real Estate Appraisers by Joanna Conde. Virginia also requires anyone using the title appraiser, be licensed.
Please do not delay, as the proposed changes will be discussed at the Appraisal Standards Board July 31st meeting. The virtual meeting is open to the public and public comments will be taken. The meeting starts at 1:00 PM EST and you must register for the meeting.
The Appraisal Standards Board, ASB, will be meeting on July 31st
to discuss changes proposed for the 2022-23 USPAP. Comments are due by July 30th
I realize this is really boring stuff to most appraisers who go blithely on with their business, only to complain when something is done that has a major impact on their business.
As I read the proposed Draft, I see a change that would undercut the appraisal profession in a major way.
Proposed Revision to STANDARDS RULE 2-2, CONTENT OF A REAL PROPERTY APPRAISAL REPORT
The content and level of information provided in an appraisal report must be appropriate for the intended use and intended users of the appraisal.
Each written real property appraisal report must indicate which of the two report options in Standards Rule 2-2 is used, either:
- by stating that it is an Appraisal Report or Restricted Appraisal Report; or,
- if a different title or label is used, by stating whether the report is intended to comply with the requirements of Standards Rule 2-2(a) or Standards Rule 2-7 2(b).
The use of a different report title or label does not exempt an appraiser from adherence to USPAP.
Comment: Some examples of other report titles or labels that are commonly used in appraisal practice are Evaluation Report, Comprehensive Written Business Valuation Report, Comprehensive Valuation Report, or Abbreviated Valuation Report.”
Currently Standards Rule 2- 2 reads:
STANDARDS RULE 2-2, CONTENT OF A REAL PROPERTY APPRAISAL REPORT
Each written real property appraisal report must be prepared under one of the following options and prominently state which option is used: Appraisal Report or Restricted Appraisal Report.
An appraiser may use any other label in addition to, but not in place of, the labels set forth in this Standards Rule for the type of report provided. The use of additional labels such as analysis, consultation, evaluation, study, or valuation does not exempt an appraiser from adherence to USPAP.
In other words, and what has been stressed in USPAP courses, an appraiser could use the term “Evaluation Appraisal Report” or “Restricted Appraisal Evaluation” but not just “Evaluation”.
The stated reason for this proposed change was it was initiated “in response to changes in the market for appraisals,” according to the ASB which might include “assignment conditions require than an appraiser use a different title for the report, such as Evaluation Report…”
My question is “who” and “why”?
Who is asking for this change and why?
Assignment conditions are imposed on the appraiser by the client. I cannot think of one instance where a real property appraiser would benefit from the use of another title, except to blur the line between what an appraiser issues as a report and what someone else who is not an appraiser issues as a report.
In Arizona, our State Statutes require that anyone who uses the title “appraiser” must be licensed in the state, which means held to certain standards (USPAP) and regulated. It also does not allow anyone to use the title of “appraisal” unless it is completed by an appraiser.
By incorporating the requirement that all appraisers comply with USPAP, which is, I believe the way it is in most states, the definition of appraisal and appraiser are as follows:
Appraisal: (noun) the act or process of developing an opinion of value; an opinion of value.” USPAP 2020-2021 – definitions.
Appraiser: one who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective.”
There is no definition of Evaluation, or the other terms suggested, proposed. An appraiser must comply with USPAP, but the term “Evaluation” does not indicate that the value was estimated by an appraiser. It could be done by anyone. Requiring the appraiser to state under whether it was prepared as a Restricted Report or an Appraisal Report somewhere in the report, does not solve the problem of confusion as many clients and intended users would not look for or know the difference.
The most important thing appraisers offer to their clients is a report done by someone who is held to standards of being competent, independent and unbiased under regulation through licensing and USPAP. To allow any term other than “appraisal” be used for these reports undercuts what we do and our profession and to me, appears to be a loop-hole for clients to contract with non-appraisers who may bend to their wishes without consequences.
I suggest every appraiser think of this carefully, and if you are opposed to the proposal to which would allow clients through assignment condition to require appraisers to use another title for their report other than one including the term “appraisal”.
Simply click on this link: ASBcomments@appraisalfoundation.org and state your opinion. I have included the words I have used are below.
I am opposed to the proposed change in Standard 2-2 which would allow for a “different title or label” that would not require the use of the term “Appraisal” or “Restricted Appraisal” to be included.
I believe this change would be confusing to clients and the public, would eliminate the protection our profession has under state laws which identify appraisals and being independent and unbiased estimates of value.
I see no good coming from this change and many unintended consequences.”
Comment on the proposed changes to the 2022-23 USPAP at ASBcomments@appraisalfoundation.org.
Register for the ASB Meeting here.