In the organization’s latest YouTube video, the Appraisal Institute invited Paula Konikoff, JD, MAI, chair of the Appraisal Institute’s Professional Standards and Guidance Committee, to discuss 2014-15 USPAP updates, including the process the Appraisal Standards Board used to adopt the latest edition of USPAP, the new Report Options that will be part of the 2014-15 edition of USPAP, and other changes made that might impact appraisers.
The Appraisal Standards Board adopted the 2014-15 edition of the Uniform Standards of Professional Appraisal Practice, commonly known as USPAP, in February of 2013. Beginning in early 2012, the ASB released requests for comment, a discussion draft and three different exposure drafts on the proposed changes. This exposure process is typical for each new edition of USPAP.
The Appraisal Institute sent comments on each of these documents and attended all of the ASB’s public forum meetings. The Appraisal Standards Board’s primary rationale for retiring Standards 4 and 5 was the regulatory community’s complaints that they were being misused. The Appraisal Institute consistently supported this change, based on the rationale that these Standards are redundant and therefore unnecessary. Real Property Appraisal Consulting will continue to require compliance with the applicable USPAP Rules; no Standards Rules will apply to this area of practice.
Two report options will be presented in the 2014-15 edition of USPAP, thus making Standards 2 and 8 conform to the existing Standard 10:
- Appraisal Reports will have the same requirements as the current Summary Appraisal Report; and Restricted Appraisal Reports will have the same requirements as the current Restricted Use Appraisal Report.
- The current Self-Contained Appraisal Report will not be an option in the 2014-15 USPAP.
The Appraisal Institute generally supported this change, but has recommended — and will continue to recommend — that the Restricted Appraisal Report be available even in cases when there is more than one intended user. We cited valuation for financial reporting as one example where appraisers will continue to be constrained by the existing reporting requirements.
Different language will be required regarding current or prospective interest and prior services, clarifying that this disclosure must be made in the Certification for “each” subsequent appraisal or appraisal review assignment. The Appraisal Standards Board did heed comments from the Appraisal Institute and other organizations and limited the additional language that is now required.
The Appraisal Standards Board adopted several changes that are intended to clarify language without making substantive changes, including the: Competency Rule; the preamble; and Standards Rules 3-5. The proposed changes to the Record Keeping Rule were dropped, based on comments from the Appraisal Institute and others.
Proposed changes to the definition of “Report” to include drafts of reports were also dropped. The ASB has indicated that this topic will resurface in the next cycle. The Appraisal Institute will continue to argue that this change is not needed to support public trust, but that it would impede the ability of valuation professionals to deliver optimal reports in several areas of practice.
You can learn more about the 2014-15 USPAP updates on the Appraisal Institute’s website.