The New USPAP

[George Hatch]

The reason I asked about page numbers is because the number of pages involved is nowhere near "too many" to understand. A person can read through them all in an hour or less. Getting a handle on its application in all imagineable situations in our business is more complicated but that's because of the variables among all those situations, not because of variables or inconsistencies in our requirements.

 

[Terrel L. Shields]

This happened a long time ago. I can't see it happening that way these days.

6-7 years is not a "long time ago"... CA must be giving everyone a bye then. It is not happening here. In the states I've worked in MO-AR-OK - they were far more likely to give you a free pass in the early 90s when everyone was still basically on a learning path. The boards now are at least as aggressive as they've ever been. And our state director a few years ago remarked on the reduced number of complaints they field. That suggests a lot of people do comply with USPAP. And likewise, the investigator has a lot more time to devote to a single complaint. But it is no different before a board composed of amateur jurists than it is to go to a real court of amateur juries. It's a dart board process where the most sympathetic and contrite will get the lightest punishment.

And I want to puke every time I hear another board member or ex-board member get up in a presentation to our appraisal group, and say something to the effect that "I learned a lot about USPAP when I went on the board..." Really? And I can think of 3 board members who have said that after or during serving. Gimme a break. If a board member goes on the board and "learns" USPAP, then how many other appraisers are also deficient in the wordsmithing that comes with Std 2, or the 'techniques' we are all supposed to know in Std 1. I've seen enough comments on the cost approach in this forum alone to know half of all residential appraisers are ill-trained on those practices and techniques we are all supposed to know. And we see obvious signs of people who do not know the fundamentals of income appraising, have no clue what a net operating income statement is or how to derive a direct cap rate. You were supposed to have learned that in your first income class.

But that has little to do with whether or not the format of USPAP has improved. There is no excuse for USPAP to even be sold as a paper book. Sell the CD, sell the download and make it searchable. And cut the cost. The production costs alone of the 3 set volume of Standards, the giant piffle book, and Student manual has to be north of $20 a copy. I know what Amazon charges authors to self-publish, and these volumes are huge beside the average 9 x 6 paperback 140 page novel someone publishes for $5 cost each.

The USPAP document as well as the AOs and FAQs are well indexed. Try using it.

If you can find the index...of the indexes...so I attached labels so I could. No there is an inadequate glossary of terms.

Question for all - particularly George... How many pages were in the 1st copy of USPAP we were mandated to know? How many pages are in the 2 epistles we need to know now? Hint it is more than triple the size I believe.

 

[George Hatch]

Inasmuch as the 2nd epistle (which is actually 2 separate publications) are entirely derivative of the 1st and provide specific applications and answers to specific issues, the apples-to-apples is the page count for USPAP itself. It's not the content that is complicated so much as all the variables in appraisal practice itself that would be impossible to address in a 10-pg white paper.

And I can answer your question about page count. The 1994 version (which was published after licensing came online) ended on pg 76. The 2020 version (before they added the clarifications to the ETHICS RULE) ended on pg 58. Due to retiring and removing some of the previously included material.

 

[Terrel L. Shields]

While not the subject of my OP, which is the document is poorly laid out, etc. There seems to be an idea that USPAP is 'easy' to understand and all appraisers should understand it EXACTLY as it is written.

OK - go to the Q & A of March 2008 when USPAP described how to value only a portion of an estate - i.e.- you could value the land separate from the buildings etc. The battle raged on for weeks in this forum about how that Q & A was "wrong" and could not be applied universally. Weeks upon weeks. And you think appraisers are in some sort of lock-step parade march unity in agreeing upon what the document even says??? Nonsense. Again, it is a black and white document regulating a 50 shades of gray world. And like 50 Shades of Grey, if you're rich it is erotica that makes women pant, but if the protagonist were poor, it would have been called sexual assault.

 

[Terrel L. Shields]

(before they added the clarifications to the ETHICS RULE) ended on pg 58

You are ignoring the bulk of the document...which is not standards

 

[George Hatch]

The biggest problem appraisers have with USPAP is the tendency to conflate user-driven requirements with USPAP minimums. And not reading the source text for what it actually says. And doesn't say.

And when NONE of the members of a state board have previously been exposed to the distinction between those two concepts that's where the misinterpretation and emo-rulings occur.

 

[djd09]

client bias...

 

[George Hatch]

You are ignoring the bulk of the document...which is not standards

"which are not standards". And for which licensees are not supposed to be judged by. Nobody gets disciplined for violating an AO or FAQ. Not unless all those board members and the state atty are especially incompetent with the laws/regs as written.

Your problem is and always has been the competency of the part-time political appointees to the state boards. That's like saying the vehicle code is too hard to understand because that one (or 6) County-appointed court commissioner who is adjudicating the speeding ticket is incompetent with that material.

What do you think it means when some state boards don't have these problems? It means it can be done without making any changes to the rules, regs or USPAP.

If some state board has 2-yr terms and meets twice a year and handles issues involving 500 licensees for the entire state then the exposure of those board members to various problems and complaints and investigations and hearings and such then the individual members - appointed by the governor - may not all be adequately qualified to be deciding the fates of their licensees. Not that every member needs to know what they're talking about, but it would be helpful for at least one of them to be competent with the material. And that IS doable, even among the smaller states.

Regardless, those problems accrue to the lack of zero defect people, not to the idea that the material itself is unknown or unknowable.

Put it this way, if you had a board comprised of 6 Fernandos or 6 Terrels, would you expect both boards to have the same competency and performance WRT the application of the laws, rules, regs and USPAP? I wouldn't have that expectation.

 

[djd09]

most of the sow is just contractual agreements...not a violation of law

 

[George Hatch]

USPAP requires the appraiser to meet the Clients SOW requirements they agree to . The SOWR is about appraisal development decisions. There's a hard deck for what an appraiser can do WRT a clients legitimate requirements but there's basically no ceiling.

The "turn time" example you commented on was the result of one board not making the distinction between an SR1 development requirement vs a contractual agreement for a due date or a fee or mode of transmittal or such. Mistakes happen.