New USPAP Frequently Asked Questions & Answers
Effective Date: January 1st, 2012 - December 31st, 2013
If you look carefully at the 2012-2013 Uniform Standards of Appraisal Practice you find a separate section of 159 pages answering 321 questions. It reminds me of when I walk into an attorney’s office and looked at their book shelves. The number of books that interpret the Connecticut statutes were far greater then the number of books that contain the statutes.
When I receive an “Ask Henry” question the first thing I do is look up the subject it covers in this FAQ section of the current USPAP. Often I am able to use what I find as the basis for my answer. (If you have the electronic version of the USPAP it is easy to look for a subject by using the search function).
After publishing the current USPAP (2012-2013), the Appraisal Foundation continues to publish answers to frequently asked questions. You can see these questions and all the 2011 questions at www.appraisalfoundation.org. (On the right side of their home page click on the “Appraisal Standards Board (ASB) – USPAP Q&As” tab which will take you to eight new 2012 questions and seven 2011 questions.)
Below is a list of the 2012 USPAP Questions and my summary of these questions and answers:
Question: Most Fannie Mae and Freddie Mac forms have a space only for “Market Time.” Is this the same as “Exposure Time”?
Answer: No -- “Market Time” is not the same as “Exposure Time.” “The exposure time is specific to the subject property whereas marketing time refers to properties in the subject neighborhood. Most Definitions of Value refer to “Exposure Time” therefore somewhere in the appraisal report there should be an opinion as to what the exposure time is of the subject property.
Comment: Whenever the USPAP requires something, it is not a satisfactory excuse that you left it out because there was no place for it on the form you are using.
2) “Acting as an Appraiser”
Question: Are there situations where you can render a value opinion without acting as an appraiser.?
Answer: The USPAP only applies when you are acting as an appraiser. It is possible to do in some instances provided that there can be no confusion about whether you are or are not acting as an appraiser. For example many people do not understand the difference between an appraiser and an assessor.
Comment: The definition of what is an appraiser is a matter of individual state law and interpretations. If you are going to try and do valuations that are not appraisals you need to understand your own state laws.
3) Personal Property Appraisal Consulting
[I am skipping this Q&A because REV Magazine only covers real estate appraising.]
4) Appraiser Fees for “Assessment Appeal” Assignments
Can an appraiser’s fee for performing a tax appeal be a percentage of the tax savings?
Answer: No. This answer applies to any fee that is based on something happening.
5) Alternate Valuation Products
I have been asked by a client to provide them with an “alternative valuation product” that they have designed. This product, as designed, does not appear to comply with USPAP. Am I allowed to perform such an assignment as and appraiser?
Answer: First it is important to understand that appraisers, not report forms, must comply with USPAP. If you are able to perform an acceptable scope of work and make modifications and/or additions to the report that would result in USPAP compliance, then you may perform such an assignment as an appraiser. Otherwise you must decline or withdraw from the assignment.
6) Appraising a Property More Than Once in Three years
Does the USPAP prohibit appraising the same property for different clients within a three year period.
Answer: There is nothing in the USPAP that specifics the number of times you may appraise a property for different clients.
Comment: Some employment contracts contain such a provision. Also you cannot use confidential information supplied by a client for their appraisal in another appraisal. You should be familiar with the Confidentiality rules in the Ethics section of the URAR. You many even run into a problem if you disclose to a client that you have appraised the property in the past for someone else.
7) Date of Report
Question: I have been asked by a client to change the date of appraisal on an appraisal I have previously submitted them. I used the date I began writing the appraisal as my report date. My client wants me to change it to the date the report was transmitted to them. Can I change the date as they have requested?
Answer: “Response: Yes. The date of the report is the date that it is completed and transmitted to the client. According to USPAP, a report is a communication “transmitted to the client of the assignment.” Given that language, the appraiser’s document is not a ‘report’ until it is transmitted to the client.”
Comment: I have been asked this question in the past. Until this precise answer was published, I could not find any definitive answer to this question. Above is an exact quote of the answer.
8) Date of Revised Report
Question: In response to a client request is it permitted to make some minor edits to a report, which consists of a few minor typographical errors, omission of the census track numbers and when the results are not changed? Also the client wants the original date of the report and the effective date to remain the same.
Answer: See answer USPAP Q&A 2012-07 Date of Report. Whenever a report is changed in any way and resubmitted to the client the date of the report must be changed. Also you must change the date on the certification because the certification date cannot be before the date of the report. When two different reports are submitted on the same date it should be so noted on the second report so there will be no confusion.
If you have a question about any of these USPAP 2012-2013 Questions and Answers or any USPAP you should contact John S. Brenan, Director of Appraisal Issues. Ph: (202) 6243044, Fax: (202) 347-7727, email: firstname.lastname@example.org