With the coming of a even numbered New Year, a new version of USPAP is with us. As of January 2018, the new version of USPAP, good through December 31, 2109, is with us.
This version of USPAP rewrites large parts of the document and adds some guidance on appraiser’s use and misuse of certain types of technological tools. Two single standalong Standards – Review and Mass Appraisal – are converted into two standards – development and reporting – to be consistent with the format of the other standards.
While the document has a different look and feel – more modern and accessible – the content is not dramatically different, even with the addition of the new standards. Many edits consist of moving existing parts of USPAP for structural reasons. Other edits were made to clarify language, definitions, and concepts.
All in all, a lot of useful refinements. In an uncertain and changing appraisal environment, it’s nice to see the trend in USPAP for better understability and transparency.
Exposure Drafts. The Appraisal Standards Board has issued a Discussion Draft of Potential Areas of Change for the 2020-21 edition of the Uniform Standards of Professional Appraisal Practice (USPAP). (The draft is downloadable from the foundation website).
Many of you may express some concern about the author’s motives (and indeed, his sanity), in initiating discussion of 2020 USPAP. Indeed, even discussing an Exposure Draft, issued by the ASB for discussion draft, seems premature given the young year.
However, it is not too soon to begin thinking about how USPAP needs to change. And, remember, that the development cycle with exposure drafts is not two years but just a long year as USPAP gets finalized early in 2019 for 2020 publication.
The ASB utilizes a highly transparent exposure process to determine when and how to make changes to USPAP. A permanent file is maintained of all comments submitted in response to an exposure draft. All comments are read and evaluated by each ASB member. Comments often lead to changes in what is exposed in further drafts and what is ultimately adopted.
After considering all comments, ASB may issue a subsequent exposure draft. There were three exposure drafts for the 2018-19 edition. There have been years where exposure drafts were drastically rewritten based on reactions from commenters and, in some cases, proposed changes were withdrawn based on public reaction.
Final action on a proposed change may be taken only after completion of the exposure process; and discussion and adoption at a public meeting.
USPAP 2020 Discussion Draft. The ASB recently issued a “Discussion Draft” to explore Potential Areas of Change for the 2020-21 edition of the Uniform Standards of Professional Appraisal Practice.
The Board notes: “Based on feedback from a 2017 survey, prior exposure drafts, and other sources, the ASB is currently examining potential areas of change for the 2020-21 edition of USPAP. The ASB recognizes that changes to USPAP can have far-reaching impacts on appraisers, users of appraisal services, and others.”
The Discussion Draft – not quite an Exposure Draft - explores the following:
• Reporting Options (Restricted Appraisal Report and Appraisal Report): Among others, the issue of multiple intended users in Restricted Appraisal Reports is raised. The ASB notes, and wonders, why Restricted Appraisal Reports are not more utilized. Good questions. Let’s see what comes out of this version.
• Scope Of Work Rule: Among other issues the ASB is looking for feedback on include: Is the scope of work rule relevant as currently written? Would the flexibility reflected in some of the Standards Rules be better addressed in the scope of work rule rather than in the standard rules?
• Comments in Standards Rules: “An argument has been made that Comments to the Standards Rules should not include additional requirements but rather such requirements should either be part of the Standards Rules or be eliminated.” Resolving this issue would make the intent and comment of comments more consistent.
• Definitions: The draft suggests that what definitions should be included in USPAP should be examined further. Some definitions should be removed and other terms with specific meanings important to USPAP should be added. One suggestion is to define what “inspection” means to appraiser (I applaud an attempt to define what appraisers do when they go out to a property!) Also, the draft suggests that definitions should not contain requirements.
• Review of Advisory Opinions: A review is suggested to provide more clarity and consistency in the Advisory Opinons. One issue that might be addressed rewording the legacy phrase “accept an assignment” since an appraiser “provides” or “performs” but does not “accept” a valuation service. The contemplated minor revisions are intended to remove ambiguity and help make USPAP simpler to read. Especially for non-appraisers
Does USPAP change too much? The best answer to that question is to ask a question. Is the appraisal profession in a static state? If you answer yes, then you must come to the conclusion that USPAP needs to change and evolve along with the changes and evolution of the profession. If you answer no, carry on.
These changes have the potential to affect you and your practice area. Consider taking a look at the issues, if only to gain some understanding of what the Board is thinking and what you think of it.
The written comment deadline is Friday, April 6. To submit comments on the proposals, please email ASBcomments@appraisalfoundation.org.
Bill Pastuszek, MAI, ASA, MRA, heads Shepherd Associates, Newton, Mass.