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AppraiserLoft Blog I Appraisal Industry News |
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Recent PostsBlogroll« Parent Company of AMC Faces Financial Challenges | Home | Vermont Backs Appraisal Independence » USPAP is updated for 2010-2011By AppraiserLoft Team | June 12, 2009 The Appraisal Foundation has released an update of the 2010-2011 edition of USPAP. Among the changes are a rewriting of Standard 3, an improvement in the clarity of the Ethics Rule and the Competency Rule, and a new disclosure requirement. Find out more here. The Appraisal Foundation has released the update for the 2010-2011 edition of USPAP. The new edition was revised by the Appraisal Standards Board (ASB) after a public meeting in New Orleans, where a number of comments regarding the confusion that surrounds certain parts of USPAP were received. There are two significant changes in the new edition. The first is an addition to the Conduct section of the Ethics Rule. Appraisers will now be required to disclose to a client and in the report any services they may have performed on the subject property within the three years prior to receipt of the assignment. These services are not necessarily a previous appraisal: they can include property management, leasing, brokerage, auction, investment advisory services, or others. The addition is intended to allow the client to determine if there would be any potential conflicts of interest. “The ASB believes the client has a right to know about an appraiser’s involvement and make the decision whether or not to engage the appraiser in that particular assignment,” said Sandra Guilfoil, chair of the ASB. The ASB believed this new requirement was necessary for increasing transparency in the appraisal process. “We did not believe that USPAP was adequately serving public trust by allowing an appraiser to complete an assignment without initially notifying the client of any recent involvement with the property,” said Guilfoil. The second significant revision is the removal of an appraiser’s obligation to allow a client access to their workfile when providing a Restricted Use Appraisal Report. The rationale behind this was that appraisal reports provided enough information for an intended user to be able to understand the report properly. Other revisions in the new edition were to improve the clarity, understanding and enforceability of the Ethics Rule, the Competency Rule and Standard 3: Appraisal Review, Development and Reporting. The Ethics Rule was largely rewritten. One of the changes was to separate “misleading or fraudulent” acts, in order to differentiate between ethical violations (fraudulent) and errors of performance (misleading). Other changes were to the introductory section, the conduct section, management section, the confidentiality section, and the record keeping section. The Competency Rule was divided into three sections to distinguish an appraiser’s competency obligations in an assignment. It also now clearly states the alternative actions an appraiser can take when they are not competent to complete the assignment. Other changes in the Competency Rule concerned the Jurisdictional Exception Rule. Standard 3 was largely overhauled to create a more “logical and comprehensive structure” and to bring it in line with the other standards, following the format of general requirements followed by specific requirements. To read about the changes in Standard 3, and the other rules, the Appraisal Foundation released a Summary of Actions, which explained the changes in full as well as the rationale behind the ASB’s thinking. The new edition of USPAP will be valid for two years, effective January 1, 2010 through December 31, 2011. It is scheduled to be available by October 1, 2009. The ASB will issue guidance, including advisory opinions and FAQs, which Valuation Review will report on as they are released.
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