Professional Standards for the Appraiser
| Publication year | 1993 |
| Pages | 1263 |
1993, June, Pg. 1263. Professional Standards for The Appraiser
It is essential that a professional appraiser arrive at and communicate . . . analyses, opinions, and advice in a manner that will be meaningful to the client and will not be misleading in the marketplace. . . . These standards are for appraisers and the users of appraisal services. . . . Appraisers must observe . . . and users . . . should demand work performed in conformance with these standards.
Excerpts from Preamble of the Uniform Standards of Professional Appraisal Practice ("USPAP"), Appraisal Standards Board of The Appraisal Foundation (1993 ed.).
The USPAP standards, which are part of federal and state legislation regulating appraisers, are the present standards for all appraisal practice. The major appraisal organizations have adopted the standards as a part of their professional standards and ethics. The standards are recognized throughout the United States as the generally accepted rules of appraisal practice. (Appraisers and users of appraisal services may obtain a copy of the standards from The Appraisal Foundation, 1029 Vermont Ave., NW, Suite 900, Washington, DC 20005-3517.)
The USPAP standards are comprised of ten standards with six statements intended to clarify, interpret, explain and elaborate on the standards. The standards set forth minimum requirements for the development and communication of appraisal, consulting and review assignments. Standards for real property, personal property, business and mass appraisal assignments are included. Eight advisory opinions have been adopted to illustrate the applicability of the standards to specific situations. This article discusses the standards of conduct for professional appraisers and the impact of recent legislation requiring licensing and regulation of real estate appraisers.
Independent fee appraisers are public appraisers who provide appraisals for the client in exchange for a professional services fee. Appraisers are defined as being "public" because of their fiduciary relationship to clients and to third parties who might have occasion to rely on the work product of appraisers. The work product may be (1) an appraisal or value estimate, (2) a consultation by providing information, analysis or recommendation with no estimate of value or (3) a review of an appraisal prepared by another appraiser.
Users of appraisal services rely on the estimates and opinions of appraisers to make informed decisions regarding private and public investment. The failure during the 1980s of a large number of financial institutions, especially savings and loan associations, has subjected appraisers and their work product to an almost microscopic examination. The result of this scrutiny---the majority of which has come from within the profession itself---has been a swift and decisive move toward attainment of professional status for the appraiser.
A nationwide effort by each of the states to regulate appraisers is the most evident result of this examination of appraisal practices. A less visible result has been the cooperative effort by appraisal organizations to recognize the need to police the profession and to improve the appraisal practice nationwide. In 1989, federal legislation(fn1) laid the groundwork for state regulation of the appraiser's activities through license and certification requirements. Eight American...
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