Recertification/ 1004D

[Gobears81]

I get this question quite often, and almost all of the clients use the term recertification for bringing prior appraisals to current date. I always say that this is a new appraisal vs a recertification of the prior appraisal. Only doing commercial work, but I think one reason that I get this question so often is because of the 1004D form. Wanted to make sure that I understood what a 1004D actually entails and how it complies with USPAP?

 

[DWiley]

As indicated on the form itself, form 1004D/442 is a multi-purpose form. It can be used to report an appraisal update, or to verify completion of construction or repairs. When used only to verify completion, it is NOT an appraisal report and is not subject to STD 2 reporting requirements. When used for an Appraisal Update, it is an appraisal report, and it is subject to STD 2.

Forms do not comply with USPAP. Appraisers comply with USPAP. Forms can contain fields designed to help an appraiser comply with USPAP, but their is no such thing as a USPAP-compliant form.

The 1004D/442 self states that it is a SUMMARY APPRAISAL UPDATE REPORT. Of course, the concept of a Summary Report no longer exists in USPAP. That has been changed to just Appraisal Report. So, a 1004/442 used for an appraisal update is subject to the requirements of SR 2-2(a). The fields on the form address some, but not all, of those requirements. For example, there is limited space on the form to provide the items listed in SR 2-2(a)(x). In almost all cases, it would be necessary to add an addendum to address everything required y STD 2.

In my experience, failure to add address such items when using the 1004D/442 is one of the most common USPAP violations.

In the UAD 3.6 the update is done on a separate form, and it is designated as a Restricted Report, which lessens the reporting (but not the development) requirements.

 

[J Grant]

I get this question quite often, and almost all of the clients use the term recertification for bringing prior appraisals to current date. I always say that this is a new appraisal vs a recertification of the prior appraisal. Only doing commercial work, but I think one reason that I get this question so often is because of the 1004D form. Wanted to make sure that I understood what a 1004D actually entails and how it complies with USPAP?

Clients are simply using an outdated term. It is a new assignment, and asks if the value has declined since the original appraisal eff date.

Because it is a new assignment, which happens to be on a 1004 D form, the appraiser should cite that they performed a prior service on the subject in the last three years.
D Wiley explained the multi-use of the form, which section is selected via a checkbox.

 

[Joe Flacco]

It is the above. It is a new appraisal. What they want to know is if the value declined since the prior appraisal. They don't need the current market value.

 

[Gobears81]

In the UAD 3.6 the update is done on a separate form, and it is designated as a Restricted Report, which lessens the reporting (but not the development) requirements.

Is the 1004D form still employed for the "recertification" purposes after UAD 3.6? It does seem that the previous version of the form wasn't sufficient support for USPAP as an appraisal without additional documentation.

Most clients have been fine with us just discounting the fee on a new (commercial) appraisal for the economies of having a recent appraisal on the same property, so not 100% sure if I'd like to change that route, but get the question so frequently that I'm curious on how other appraisers have handled it.

 

[DWiley]

Is the 1004D form still employed for the "recertification" purposes after UAD 3.6? It does seem that the previous version of the form wasn't sufficient support for USPAP as an appraisal without additional documentation.

Most clients have been fine with us just discounting the fee on a new (commercial) appraisal for the economies of having a recent appraisal on the same property, so not 100% sure if I'd like to change that route, but get the question so frequently that I'm curious on how other appraisers have handled it.

The form 1004D/442 will NOT be part of the new UAD 3.6. Rather, there will be two new forms - one for an appraisal update and one for completion items. As I noted above, the new appraisal update from is designated as a Restricted Report, reducing the USPAP reporting requirements that apply.

As for the fee, that is a business decision for each appraiser.

 

[Tom4value]

The issue I have is when I am asked to to a final inspection for new construction and they say, “Oh, and determine if the value has changed.” That is another assignment!

I tell them that they will get two 1004Ds, one for the completion and one for the update. Whether I charge more depends on the client.