The protection of personal property under the USPAP - by Steven Spangle

Hiring someone to complete an appraisal of jewelry or antiques (personal property), the value of a business (business valuation), or of real estate (real property) can be challenging. When ordering a real property appraisal lenders have the advantage the real estate appraisers be appropriately credentialed when appraising for a Federally Related Transaction required to comply the Uniform Standards of Professional Appraisal Practices (USPAP). The USPAP standards require competence and ethical behavior and a State issued credential provides a direct an appropriate place to file a complaint. Additionally lenders have trained staff who know what to look for in an appraisal and what might be a problem area.

The task of hiring an appraiser can be more daunting for someone who is not experienced with appraisers. Even individuals who regularly order real estate appraisals may be faced with the same issue when attempting to hire personal property or business appraisers. What qualifications should you look for and how do you know the appraiser will perform ethically?

There are ways that all users of the appraisal services can assure themselves of having the maximum chance of hiring a competent and ethical appraiser. 

The first step is requiring, as part of the engagement, that the appraiser agree to comply with the USPAP as promulgated by the Appraisal Foundation. The Appraisal Foundation (TAF) sets the congressionally authorized standards and qualifications for real estate appraisers, and provides voluntary guidance on recognized valuation methods and techniques for all valuation professionals. These standards include both ethics and competency requirements as well as minimal development and reporting standards. The foundation advances the profession by ensuring that appraisals are independent, consistent, and objective.

Clients requiring appraisers to comply with USPAP provides themselves with the greatest possible protection. An appraiser accepting an assignment should then be aware that there are specific ethical and performance standards they will be required to comply with. 

If they do not know what USPAP is or do not want to comply, a client has the option of not hiring them.

If an appraiser fails to comply with USPAP they have, at a minimum, breached a contract and potentially damaged their client. There is no licensing board were a complaint can be filed against a personal property or business appraiser. However there are organizations, discussed later, that an appraiser may belong to that may be able to help. There is also legal recourse if someone violates a contract and causes the client damage. 

The Standards are public documents. They can be purchased from the Appraisal Foundation at www.appraisalfoundation.org. A free version is viewable on the Internet. It is not a printable document. 

Another resource that consumers can use to protect themselves is by hiring appraisers who are members of a recognized appraisal organization that requires all members to comply with USPAP. Hiring appraisers from these organizations results in appraisers who comply with USPAP but also gives a user of the appraiser’s services a source, short of litigation, to file a complaint against an appraiser who is not state credentialed but is a member of the organization. A list, not all inclusive, of organizations requiring members to comply with USPAP can be found on the Appraisal Foundation website by going to: https://www.appraisalfoundation.org/imis/TAF/About_Us/Sponsors/TAF/TAF_Sponsors.aspx?hkey=8ba10b49-afa4-4423-83ea-8b49e6564353.

An excellent resource is The Appraisal Foundation website. By looking in the tab “Resources” a number of valuable links can be found that can answer many of the questions users have about appraisals. The best way for users of appraisal services to protect themselves is to require that personal property, real property or business appraisers comply with USPAP and preferably that they belong to a professional organization requiring members to comply with USPAP.

Steven Spangle, SRA, MRA, MBREA representative to the TAF BOT, and president of Spangle Associates, Auburn, Mass.