Question? (not hard ones)

[Terry Russell]

What would be the benefits or the detriments to the appraisal industry if the "Supplemental Standards Rule" was removed from USPAP?

In addition, how about the severing the Jurisdictional Exception Rule Would it be a bad idea to remove this rule also?

Terry

 

[Terrel L. Shields]

I think it is pretty meaningless as is, and cannot think of a single instance it even comes into play in a normal practice. It's absence would be a non-event, imho.
ter

 

[George Hatch]

Terry,

The concept of supplemental standards is a mechanism whereby the appraiser can be held accountable for compliance with appraisal standards inherent in an assignment that are not otherwise specifically addressed in the USPAP. Removing it could cause situations where appraisers would try to hide behind omitting these requirements by saying "Well, it isn't in USPAP, so I don't have to do it!!" You can argue that the requirements for Intended Use/Intended Users and Scope of Work could serve to render this element of USPAP as redundant. Who knows, maybe that's how it will go in the future. But I don't think we'd like the results of pulling it out right now. Read up on Statement 10 in the USPAP, and bear in mind that Smt-10 is not a suggestion.

The concept of Jurisdictional Exception is another handy feature in the USPAP that essentially prevents it from ever actually being in conflict with the law or other juridictional authority. Say a court issues a consent decree in a fair housing case that prevents appraisers from using certain descriptions or presenting certain factual data of certain type in appraisal reports; information that some people could argue would affect a reader's decision making process with respect to the appraisal. Without the Jurisdictional Exception Rule, appraisers would find themselves stuck between the law as interpreted by a court or other jurisdiction, and the disclosure requirements of the USPAP, which through incorporation by most appraisal regulatory agencies governs their appraisal licenses. This mechanism removes that conflict by yielding any specific portion of the USPAP in favor of established law or regulation, so long as it comes from a bona fide jurisdiction as defined, but without rendering the whole of the USPAP irrelevant to that assignment. Thus, there are no "non-USPAP" appraisal assignments just because one or more portions of the USPAP are in conflict with a law or regulation. I can't really see how Scope of Work could be written to actually conflict with the USPAP, so I can't see how this mechanism could be removed the way the Supplemental Standards rule could (someday) be.

Believe it or not, the contents of the USPAP are not added or otherwise changed casually. The ASB puts a lot of thought into it. As with any group of people engaged in such comprehensive endeavors, it's hard to make the right decision every single time, but their track record is pretty good from my viewpoint.


George Hatch

 

[Terry Russell]

Thank you for your relpies.

George,

If the supp. stds. were to be eliminated at some point in time, it seems to me there could not be any jurisdictional exception.
As it is stated in USPAP "By logical extension, there can be no violation of USPAP by an appraiser disregarding, with proper disclosure, only the part or parts of USPAP that are void and of no force and effect for a particular assignment by operation of legal authority."
The way I read that is if the assignment and the resulting report complies with USPAP as it stands and there are no supp. stds. Then why is there a need for Juris except?
Terry

 

[Steve Owen]

The Jurisdictional exception is common in most professions covered by governmental standards. Basically, what they are saying is that if following USPAP would be breaking the law, then you don't have to follow it. I don't see how it could be removed even though it almost never comes up.

 

[Terry Russell]

What I see in the Juris Except. is a basic severability clause.
Which states if a part of rule is unlawful, the rest of the rule stands as is.
Anyway thanks for the replies and keep your thinking caps on.

Terry

 

[Steve Owen]

Terry, the Juris Except that you mention is common in individual contracts. It is in most of the leases I see.

I was thinking more in terms of professional standards. Professions that I can think of, which have legal exceptions in their standards include CPS's, doctors, and of course, attorneys. I believe that, in some cases, the exception is not as specifically spelled out as in our profession. There is an interesting case getting ready to go before the high court right now as to whether doctors can follow their professional standards and recommend marijuana use to patients in states where that medical use has recently been made legal because it is still a federal crime. It is cast as a free speech issue, but also crosses over to jurisdictional exception.

The question is not whether we can do without a jurisdictional exception, of course you have to have one. You cannot have people to doing illegal things to meet their professional standard. Rather, I believe the question is whether it must be spelled out or can just be implied. Personally, I like the way USPAP does it.