Exposure Draft USPAP 2018-19 - Appraisal Foundation

[hastalavista]

But what does that mean? Assume that the proposed definition of "report" was adopted, and Ken then sends a document to someone. That document contains value opinions, but no signed certification. Under USPAP, that is not a "report." Under the law it is a report. So, when USPAP says that copies of "reports" must be retained, which definition applies?

In Florida, the USPAP requirements apply to retention because the regulation clearly states
Except as otherwise specified in the Uniform Standards of Professional Appraisal Practice

And Danny, I was very specific. I said that in Ken's single example, it would appear that there is no contradiction between the state law retention rules and the USPAP retention rules (under the draft exposure change) nor is there any enforcement conundrum. There may be other conflicts, but that isn't one of them.

One might argue that the state's definition applies to the state law, or one could argue that the phrase you highlighted means that the law defers to the USPAP definition with regards to retention. These is a valid logical base for either position. It is a legal quagmire that appraisers should not have to deal with.

Regulations are full of "what ifs" in regard to interpretation. Look how long we've argued C&R and the two presumptions.

In Ken's example, while one could try to argue that
"except as otherwise specified in the Uniform Standards of Professional Appraisal Practice"
doesn't mean that if something is otherwise specified, it is an exception, I don't see the valid logic base to do so. The regulation says what it says "except as otherwise specified..." As far as retention goes, the proposed change to the USPAP would specify something other than in the regulation.

 

[hastalavista]

The discovery issue is the one most cited by the "pro-draft" crowd. I understand it, but I have also lived it (hundreds of times) and it is not the monster that many claim. USPAP should address appraisal practice, not legal processes. Rules of discovery should be driven by law and should play no part in the USPAP, IMO.

Ok. I can certainly accept that as a valid argument.
It is a good one. This is a rare instance where I disagree with you & George over the same issue (which always causes me to continually consider my position).

 

[Ken B]

USPAP states that an appraisal report is delivered upon completion of the assignment. USPAP is silent about any document that may be delivered to the client prior to completion of the assignment

My state's law is more inclusive regarding what comprises an "appraisal report."

USPAP states that an appraisal report must include a signed certification.

My state's law is silent on the matter of a certification.

Some would attempt to use state law in an effort to trump USPAP requirements.

I don't see the conflict.

 

[DWiley]

No conflict - just additional requirements added by the state law.

 

[George Hatch]

The "conflict with law" is just a tangent. The reason this proposed change would be in conflict with some of the state laws is the same reason we shouldn't be so anxious to make the change in the first place - because it directly conflicts with both common sense and the idea that the appraisal profession has established core requirements for both the development and reporting elements of our assignments. Requirements that always apply in every appraisal or appraisal review assignment and which are not contingent on specific circumstances.

The word "report" has a common meaning in the English Language. The definition in common usage does not include requisite elements for signature or labeling, so it should come as no surprise that up until now the USPAP Definition of Appraisal Report also includes no elements pertaining to signatures or labels. So far, the communication of an appraisal is not an appraisal report because it's labeled as such or because it is signed. Those requirements go with the report, they don't define it.

1.
give a spoken or written account of something that one has observed, heard, done, or investigated.
"the representative reported a decline in milk and meat production"
synonyms: announce, describe, give an account of, detail, outline, communicate,divulge, disclose, reveal, make public, publish, broadcast, proclaim,publicize

"the government reported a fall in inflation"

This isn't a problem because of some arbitrary decisions made in the past or because of established verbiage used in either the laws or USPAP; it's a problem because it contradicts what the individuals (appraisers) are actually doing and what the expectations of the users are for those actions.

 

[George Hatch]

Forget the semantics and wordplay, and lets be honest about who's doing what. I keep asking the questions and I keep getting crickets in response


When an appraiser sends over a 120pg document that says "appraisal report" and contains 100% of the content that would normally be expected in an appraisal report, what has the appraiser done?
In transmitting that document, who does the appraiser believe the intended users to be?
In transmitting that document what does the appraiser believe the intended use to be?
Are the users and uses that the appraiser expects for that particular communication identified as such in that document?
Are those intended users and intended uses exactly the same as will be expected for any subsequent documents?


When their attorney client (for example) receives that document, what do they expect of it?
How are they using that document? Are they using that interim communication in exactly the same way and for the same purposes as they would for any subsequent document?
What decisions are they making as a result of reading the content of that interim communication?


If there's an intended use and intended user for a document that communicates an appraiser's SR1 opinion of value (aka an appraisal) and if that intended user actually uses that communication for that intended use then how can that communication be considered anything other than an appraisal report? Particularly if the users/use of the interim communication are in any way different than for the subsequent communications?

 

[George Hatch]

BTW, everyone should feel free to substitute "UAD-compliant URAR" or any other type of appraisal report for any other type of user for my references to the 120pg narrative and the attorney client because regardless of who/what there are otherwise ZERO differences in the actions and expectations for the competency and impartiality that are involved.

One can only imagine the usage (just as one example) at the FHA assignments for unsigned "interim communications" that can be deemed "not an appraisal report" if their results are undesirable. One can only imagine how quickly the residential lenders will adapt their protocols to exploit these changes or the amount of pressure that will be brought to bear upon appraisers to make these changes to their assignment protocols.

And remind us again, exactly which type (singular) of client actually thinks they need this change and doesn't think they can deal with signed appraisal reports that are also marked "draft" or "interim" or the like? We're talking about the lawyers, right? 'Cause gov't can deal, and so can most any other big ticket oh-so-complicated decision makers.

So we're going to upend the entire profession on behalf of the lawyers?

Puh-leeze. If we want to make an exception to common sense on behalf of the lawyers' need to advocate on behalf of their clients then let's just develop another Exception Rule - we can call it the "Litigation Exception Rule" that will sever the contested portions of USPAP from those assignments.

 

[Ken B]

Many words and terms in the English language have different meanings, dependent upon context and user. Hence the never-ending discussion of PUDs. The confusion lies in the effort to apply one meaning of the term to a situation where a different meaning of the term is required. Why this is so confusing is a mystery to me. Yet, it happens.

George, you know better than most that you can't legislate or regulate morality. If someone is going to lie, cheat, or steal, they are going to do it, regardless of consequence. You oft proclaim that USPAP is a principles-based document, but your argument on this issue is entirely rules-based. The efforts to apply a state's definition of a report to a discussion of USPAP and its definition of report is no less appropriate than trying to assert that a property's location within a PUD zoning district requires that the PUD block be checked in a URAR. That is wrong and to emphatically repeat that it is correct is unbecoming.

Draft reports are not acceptable for some intended users and some intended uses. For other intended users and intended uses, they are a business necessity. You can't disrupt the businesses of some because you fear the consequences of misuse by others.

 

[DWiley]

If the ASB wanted to officially "sanction or "recognize" drafts, I can live with that. But they need to face the reality, and that reality is just what you typed. You used the phrase "draft reports." That's what they are - reports, of a certain type. As long as they keep trying to bastardize that basic reality, any solution will have unwanted consequences to other sections of USPAP.

The real issue driving this bus is being required to keep copies of drafts. Again, until they admit that, they will struggle for resolution.

I just don't want them to adopt something that is so fundamentally screwed up that is messes up other foundational aspects of USPAP

 

[Peter LeQuire]

The real issue driving this bus is being required to keep copies of drafts. Again, until they admit that, they will struggle for resolution.

If this is the real issue, then the real issue isn't a real issue, is it? The whole appraisal world - except for a few technological dinosaurs - are going or have gone to electronic files. As behind the technological curve as I am, I do know how to make an electronic copy of a document and store it somewhere on my machine. (I can also apply a watermark that says "DRAFT", and can copy and save that draft, as well.)

("What's that thing they dragged up to the gate?" - Priam "I don't know, Pop. You want me to go look? -Hector)