ASB Urged to Make USPAP More Flexible
The Appraisal Institute Urges ASB to Make Uniform Standards of Professional Appraisal Practice More Flexible
The Appraisal Institute announced Aug. 16 that it has asked the Appraisal Standards Board to institute a principles-based approach to appraisal standards that would, over time, require fewer changes to the Uniform Standards of Professional Appraisal Practice and enhance understanding of the document.
Representatives of AI attended a public ASB meeting in July, during which Paula Konikoff, JD, MAI, chair of AI’s Appraisal Standards and Guidance Committee, urged the ASB to:
- Modify USPAP to be “principles-based” and not “rules-based,” as it has become over time;
- Modify USPAP to be more flexible for appraisers to meet the needs of diverse clientele; and
- Modify USPAP to allow restricted reports to go to more than one intended user.
The meeting addressed the issue of “draft” communications from appraisers to clients, and some panelists noted that USPAP may not be appropriate for litigation assignments and instead suggested that an entirely new standard may be required for this practice area.
Konikoff noted that a properly drafted USPAP (i.e. a principles-based document) would be appropriate for all intended uses. Additionally, she urged that USPAP address draft reports more directly, noting that the legal and accounting professions recognize that draft reports often play a part in developing professional opinions. She noted that the integrity of lawyers and accountants is not questioned solely on the basis of a draft report.
In its last exposure period for USPAP, the ASB proposed making it a requirement that appraisers maintain all preliminary communications with the client as well as a paper trail explaining differences in revised reports. The proposal, which was made at the urging of the bank regulatory community, may resurface again during the next exposure period in two years.
- Fannie Mae Filed a Complaint Against Me - October 18, 2023
- Appraisers Pressured to Inflate Values Based on Race - August 16, 2023
- Foregoing Contingencies! But What About Fiduciary Duty? - June 27, 2023