At its February 3, 2017, meeting, the Appraisal Standards Board (ASB) of The Appraisal Foundation adopted several proposed changes to the Uniform Standards of Professional Appraisal Practice (USPAP). These changes will be effective January 1, 2018.
The ASB revised the definition of Report to specify that a client or a party authorized by the client can transmit reports. The ETHICS RULE and COMPETENCY RULE received minor revisions regarding the transmission of assignment results. An appraiser must not communicate a report or assignment results that are known by the appraiser to be misleading or fraudulent. A work file must be in existence before the issuance of any report or other communication of assignment results.
A new definition, Assignment Conditions, was added. Assignment conditions will be defined as, “Assumptions, extraordinary assumptions, hypothetical conditions, laws and regulations, jurisdictional exceptions, and other conditions that affect the scope of work.” The Comment to this new definition states, “Laws include constitutions, legislative and court-made law, administrative rules, and ordinances. Regulations include rules or orders, having legal force, issued by an administrative agency.”
The definition of Assignment will be revised to state, “A valuation service that is provided by an appraiser as a consequence of an agreement with a client.” Previously, the definition of assignment had referred to both the agreement to perform a valuation service, and the service itself. Now the definition refers only to the valuation service provided.
The ASB created a new Advisory Opinion, AO-37, which is titled Computer Assisted Valuation Tools. The Board also approved edits to current Advisory Opinions 1, 21, 31, and 32. Advisory Opinions are intended to provide advice and guidance only, and are not intended to establish new standards.
Organization and consistency were behind other changes. For example, the ASB voted to separate STANDARD 3 into two separate Standards – STANDARD 3 which will address the development of an appraisal review, and STANDARD 4 which will address the reporting of an appraisal review. Likewise, the ASB separated STANDARD 5 into STANDARD 5 and STANDARD 6, which will address mass appraisal development and reporting, respectively.
The Appraisal Foundation has released a Summary of Actions document that discusses these changes in more detail; this document can be found on the Foundation’s website here: https://appraisalfoundation.sharefile.com/share?#/view/s305094efde84bbda
Look for more guidance from McKissock in the coming months regarding the changes to USPAP. The 2018–19 version of the 7-hour USPAP Update Course will be available in the fourth quarter of 2017.