Uniform Standards of Professional Appraisal Practice can be thought of as the quality control standards applicable for appraisal analysis and reports in the United States and its territories. USPAP, as it is commonly known, was first developed in the 1980s by a joint committee representing the major U.S. and Canadian appraisal organizations.
While USPAP provides a minimum set of quality control standards for the conduct of appraisal in the U.S., it does not attempt to prescribe specific methods to be used. Rather, USPAP simply requires that appraisers be familiar with and correctly utilize those methods which would be acceptable to other appraisers familiar with the assignment at hand and acceptable to the intended users of the appraisal. USPAP directs this through what is called the Scope of Work rule. At the onset of an assignment, an appraiser is obligated to gather certain specified preliminary data about the project, such as the nature of the property to be appraised, the basis of value (e.g. market, investment, impaired, unimpaired), the interests appraised (e.g. fee, partial), important assumptions or hypothetical conditions, and the effective date of the valuation. Based on this and other key information, the appraiser relies on peer-reviewed methodology to formulate an acceptable workplan.
What is the primary intent of USPAP?
The intent of USPAP is to promote and maintain a high level of public trust in professional appraisal practice. This concept is emphasized at the very beginning of the PREAMBLE:
The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers.
The development of “trust” between the general public and the professional appraiser is not unique to the appraisal profession – it is also inherent in other professions such as medical practice and accountancy.
Contained within this notion of “trust” is a relationship that requires the professional to provide more than their skill or expertise. There is a distinct ethical obligation to act in the behalf of the public’s to the appraisal profession – it is also inherent in other professions such as medical practice and accountancy.
Contained within this notion of “trust” is a relationship that requires the professional to provide more than their skill or expertise. There is a distinct ethical obligation to act in the behalf of the public’s
Although the main purpose is not to protect appraisers, appraisers do receive significant benefits and protection from USPAP. It establishes requirements for impartiality, independence, objectivity, and competent performance. Because of these standards, appraisers who comply with USPAP are viewed as unbiased professionals whose work is worthy of public trust.
Real property appraisers are often legally bound to comply with USPAP by applicable laws. There are no such laws binding non-real property appraisers to comply with USPAP. However, many non-real property appraisers either choose or agree to comply with USPAP in their assignments. The decision to comply may be prompted by affiliation with a professional appraisal organization or the preference of the client.
To comply with USPAP, a personal property appraiser would have to comply with the requirements of STANDARD 7 and STANDARD 8, in addition to the applicable rules (e.g. ETHICS RULE, COMPETENCY RULE). This means the appraiser would have to perform the level of research and analyses required to produce credible assignment results (given the intended use). Since the appraiser would be communicating the appraisal as an oral report, the report must address (to the extent that it is both possible and appropriate) the substantive matters of a Summary Appraisal Report. In addition, the appraiser would have to prepare a workfile as required by the Record Keeping section of the ETHICS RULE.
In compliance with USPAP, all appraisal reporting must include the following, at a minimum in the appraiser’s workfile, and more usually, in the report itself:
- Effective Date of the Appraisal
- Date of Appraisal
- Date of Value