Rental Agreements.

[William K]

I used to get beat up on the forum when it was not the Kinder/Gentler forum. I made it out alive. Learned something too.

Like not asking if something is in USPAP on a public forum, when you could and should look it up yourself.

The, "Does USPAP?" questions are becoming more than a little bit disconcerting!m2:

 

[Scott R Marshall]

The, "Does USPAP?" questions are becoming more than a little bit disconcerting!m2:

Does USPAP state anything about posting on an appraisers forum? How about a good recipe for waffles? :Eyecrazy:

 

[George Hatch]

I think it helps to have reasonable expectations up front. Someone new showing up and asking basic questions doesn't usually bother me too much. But once we provide an answer having someone who doesn't know what they're talking about argue with you gets real annoying real fast. That's not the case in this situation so I'm not inclined to get all huffy this time.

I aspire to that patience so if/when I slip up I reckon you guys can set them straight.

In answer to the OPs question, the only time I get worked up about stated rents is when there's a long term lease or a prevailing rent control ordinance in effect that compels me to base my appraisal on them. If neither of those situations are present then I don't much care what the property owner says about rents because I'm going to develop my opinion of market rents off the rental survey anyway. That's what it's for. I'm also going to base my analysis of the subject and the comparables based on the expectations in the market, not on what's reported unless it's reasonably close.

If the borrower isn't showing you rental agreements then just say so in your report. Don't get huffy with them or create a mountain out of a molehill. They're problem isn't with you, it will be with your client if/when they ask the property owner to prove it.

I warn property owners all the time as to what to expect from a lender with respect to proving building permits and contract rents and such. In cases where I cannot proceed without the info I tell them that up front and forward a note to explain the situation to the Client so they know who's holding up the process.

 

[CANative]

It's easy to find things in USPAP that are there. It's not so easy to find things that are not there.

 

[William K]

It's easy to find things in USPAP that are there. It's not so easy to find things that are not there.

:laugh::laugh:

Where does it address what to do when Pookas are found during an inspection?

 

[Mountain Man]

MM -
Do not assume anything about me or my knowledge of USPAP. I am not the OP.
MCG's point is valid, direct - and harsh. Your assumption of me is - plain wrong.

Most folks on this board try to bounce thoughts and ideas off each other and most get what they came for - but some use the board to crush fellow appraisers for what..? respect? Gimme a break - Help improve this profession by answering the OP question without the neagtive tone of a know-it-all.

You are the reason many view this site - but are too afraid to ask a question if fear of heavy-handed negative feed-back. Be kind and gentle with your reponses and, if respect is what you are after, it will rewarded.


My office has a policy that a rental agreement must be in the file or the assignment will be turned down due to risk exposure.

You run your office and I will run mine - but do not assume my knowledge of USPAP and I will not assume your a horse's ***.

Try to be a little more positive and help those that need it instead of chasing off those who need the help the most.

Make notes in your work file of what the owner said, disclose and move on. Fact of life, leases are not always available. Often times all we get are a spreadsheet of a summary, use it and disclose it. Fact is USPAP only requires the appraiser to make an attempt and disclose what measures were taken. If you insist on leases, many non-lenders will pass you over. As a broker, I will not give you a lease. I too have privacy laws to go by. Will give a summary with my clients permission, but many leases are confidential and can't be disclosed to anyone out side the transaction itself.

 

[Michigan CG]

Yesterday there were three different threads asking if such-and-such were in USPAP, and all three thread questions were highly annoying. How does one ask such a question and claim to be a professional in this industry? A typical residential appraiser needs to only be versed in about 30 pages MAX, and one can read some of the pages once and never need to return. Confidentiality, read it once and done. Ethics, read it once and done. Standards 1 and 2 are not that long.

................My office has a policy that a rental agreement must be in the file or the assignment will be turned down due to risk exposure. ................

Risk of what?

Residential appraising and commercial appraising along with agricultural appraising all fall under the directive of one USPAP document. There are not three different documents. Why do you need a lease or rental agreement? What risk is there by not having one vs. having one where the lease is not at market?

What do you do if there are no tenants and therefore there is not lease? You do the same thing as if you DID have a lease, you still determine market rent. I had a farm where the tenants were paying $60/acre and I had the lease. It was highly productive land and the lease was not even close to market; I estimated rent at $200/acre. So in that case the lease had no bearing on the valuation.

Requiring a lease is the same as requiring a purchase price in a sle property; you don't need it to appraise it.

The, "Does USPAP?" questions are becoming more than a little bit disconcerting!

Your words are nicer than mine. The questions are insulting to the profession. When doing a residential assignment I am held to the same standards as a Certified Residential Appraiser and vice versa. Why do these certified people not know the basics of their profession?

I remember a litigation case where the other appraiser cited USPAP rules (not) getting them mixed up with Fannie guidelines which was not applicable in the case. He was applying fannie adjustment guidelines to a litigation case and then citing USPAP as the source of those fannie adjustment guidelines which DID NOT EVEN *&%%&(%^ apply!!!!!!!

This idiot should be just as familiar with USPAP as I am and he couldn't even get Fannie and USPAP separated and in addition was stupid enough to abide by fannie guidelines (calling them USPAP guidelines) in a #$$%^&*() litigation case.

Frustrated is an understatement because people like him make the profession look very bad.

m2: m2: m2:

 

[J Grant]

Many times rental properties are vacant and there is no lease. Always develop market rents, and most times it is good practice to put more reliance on them unless there is a compelling reason not to.

 

[CANative]

So would this be more of a rant or a tirade?

Yesterday there were three different threads asking if such-and-such were in USPAP, and all three thread questions were highly annoying. How does one ask such a question and claim to be a professional in this industry? A typical residential appraiser needs to only be versed in about 30 pages MAX, and one can read some of the pages once and never need to return. Confidentiality, read it once and done. Ethics, read it once and done. Standards 1 and 2 are not that long.



Risk of what?

Residential appraising and commercial appraising along with agricultural appraising all fall under the directive of one USPAP document. There are not three different documents. Why do you need a lease or rental agreement? What risk is there by not having one vs. having one where the lease is not at market?

What do you do if there are no tenants and therefore there is not lease? You do the same thing as if you DID have a lease, you still determine market rent. I had a farm where the tenants were paying $60/acre and I had the lease. It was highly productive land and the lease was not even close to market; I estimated rent at $200/acre. So in that case the lease had no bearing on the valuation.

Requiring a lease is the same as requiring a purchase price in a sle property; you don't need it to appraise it.



Your words are nicer than mine. The questions are insulting to the profession. When doing a residential assignment I am held to the same standards as a Certified Residential Appraiser and vice versa. Why do these certified people not know the basics of their profession?

I remember a litigation case where the other appraiser cited USPAP rules (not) getting them mixed up with Fannie guidelines which was not applicable in the case. He was applying fannie adjustment guidelines to a litigation case and then citing USPAP as the source of those fannie adjustment guidelines which DID NOT EVEN *&%%&(%^ apply!!!!!!!

This idiot should be just as familiar with USPAP as I am and he couldn't even get Fannie and USPAP separated and in addition was stupid enough to abide by fannie guidelines (calling them USPAP guidelines) in a #$$%^&*() litigation case.

Frustrated is an understatement because people like him make the profession look very bad.

m2: m2: m2:

 

[Mark K]

I asked the owner for his rental agreements and he said that he woould not supply them to me. Is there any thing in USPAP that says we have to have the rental agreements. The owners says he gets a certain amount for rent and I asked for the rental agreement and he said no.

Well, I think the USPAP police have piled on you enough re: that question.

Personally (and I don't really care what others do or don't do), I will not appraise a rental property unless the owner provides a copy of the lease, if one exists.

Nothing prevents you from completing a report with an Extraordinary Assumption that the current rents are the same as the market rents. Personally, I think its a waste of time and insist that the client provides me with the existing lease.