The acronym USPAP stands for the “Uniform Standards of Professional Appraisal Practice”. The USPAP standard manual is published every two years by the Appraisal Standards Board of the Appraisal Foundation, an industry group authorized by Congress to write appraisal standards. The standards are organized into five sections consisting of Definitions, Preamble, Rules, Standards, and Statements on Appraisal Standards.
The USPAP Standard Rules are separated into 10 sections with sections 1 & 2 pertaining to Real Property Appraisal (Real Estate), 3 & 4 to Appraisal Review, 5 & 6 to Mass Appraisal, 7 & 8 to Personal Property Appraisal (which includes Machinery & Equipment), and 9 & 10 to Business Appraisal.
In short USPAP requires that the appraiser take certain actions to develop the appraisal, and that the report include a minimum amount of content. Examples of the minimum actions to develop the appraisal are identifying the problem being addressed (i.e. the scope of work necessary to develop credible appraisal results), and identifying the type and definition of value. Examples of minimum content are disclosing all assumptions, extraordinary assumptions (those that if proven false would affect the value), and hypothetical conditions assumed, stating the appraisal methods and techniques used, stating the reason that one of the three appraisal approaches was excluded, and including the effective date of the appraisal.
All appraisal reports conforming to USPAP must include a signed certification page stating the following:
I certify that, to the best of my knowledge and belief:
- The statements of fact contained in this report are true and correct.
- The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
- I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.
- I have performed no services (or the following), as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.
- My engagement in this assignment was not contingent upon developing or reporting predetermined results.
- My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
- My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
- I have (or have not) made a personal inspection of the property that is the subject of this report.
- No one provided significant personal property appraisal assistance to the person signing this certification.
USPAP requires that any person who signs any part of the appraisal report (including a letter of transmittal) also sign the certification. For that reason the signed certification should be a separate document from the appraisal report (a separate page after the report signature page or as an attachment to the report).
Users of typical Condition & Valuation Surveys and/or Appraisal Reports would be well served to make sure that the surveyor/appraiser that they are using is current in the latest version of USPAP. Courses are held annually for the full 15-hour USPAP, or the 7-hour refresher course.
Any marine surveyor or appraiser can be current on USPAP and include the minimum required content in their appraisals. However, neither of the main marine surveyor associations (NAMS or SAMS) have any USPAP requirements for their membership. ASA accredited appraisers are required to either complete the full course every 5 years or the 7-hour course every two years.
Dana R. Teicheira is a NAMS Certified Marine Surveyor and an ASA Accredited Senior Appraiser in both Appraisal Review and Management (ARM) and Machinery and Technical Specialties (MTS), with a designation in Commercial Marine Surveying. Mr. Teicheira is headquartered in Northern California and can be contacted at 707-769-9171 or by email at email@example.com