The New USPAP

[DWiley]

Committing a substantial error of omission or commission that significantly affects an appraisal

I would agree that on the development side the appraiser committed an error that violated SR 1-1(b).

But what about the reporting requirement to "clearly and accurately set forth the appraisal in a manner that will not be misleading"? Was the report with the large GLA error "clear and accurate" and not misleading? Is your interpretation (that being misleading requires intent) consistent with standard dictionary definitions of the term?

 

[djd09]

View attachment 85292
Twice I've had a report used in a divorce and been forced to testify although there was no mention of a divorce. Once it was the sister of a loan officer and another time I have no idea whether the couple were planning a divorce or not. I was sent to value the property from their bank.

But how would I have known?

Preparing a cost approach solely at the client's

request even though the results were not meaningful.

Failing to report that the cost approach was given no

weight in the final reconciliation and why.

you should like that one...

 

[Dale Floyd]

Actually, I think that was understood very well. Disagreement is not the same as not understanding. And, there are certainly two sides to the debate on that term and whether it should address unintentional acts.

Real world example: An appraiser starts an appraisal report by cloning a report the he did two months ago for a home on the same street. The appraiser neglects to update the sketch in the cloned report. As a result, the size reported for the subject property is off by 500 square feet. This was not an intentional act by the appraiser; it was a mistake.

Should that be considered a misleading appraisal report?

And there is the problem, isn't it? You pointed out earlier that you had issues with officials trying to impose non-USPAP violations as though they were in the past. This is another, that will entirely fall upon the opinion of whomever is presenting a challenge.

Would that be considered misleading? You and I both know of a few who would absolutely say yes. Not everybody is as logical as they should be.

And that's the problem with things like this in USPAP.

You had asked for an example of a USPAP item lacking a general understanding - I think you and I would agree that we just discussed one in the past.

 

[djd09]

I would agree that on the development side the appraiser committed an error that violated SR 1-1(b).

But what about the reporting requirement to "clearly and accurately set forth the appraisal in a manner that will not be misleading"? Was the report with the large GLA error "clear and accurate" and not misleading? Is your interpretation (that being misleading requires intent) consistent with standard dictionary definitions of the term?

that is alot of questions...you want me to fix it...just this one time..."clearly and accurately set forth the appraisal in a manner that will be credible"

 

[DWiley]

Would that be considered misleading? You and I both know of a few who would absolutely say yes. Not everybody is as logical as they should be.

Sorry, I want to be 100% clear on what you mean, and I am not.

In the case cited (500 SF error in reported GLA), do you think that report would violate SR 2-1(a) or not?

STANDARDS RULE 2-1, GENERAL REPORTING REQUIREMENTS
Each written or oral real property appraisal report must:
(a) clearly and accurately set forth the appraisal in a manner that will not be misleading;

 

[Dublin ohio]

I am thinking that maybe a version in the "Dick and Jane" format might be beneficial to some appraisers.

 

[Dublin ohio]

I am thinking that maybe a version in the "Dick and Jane" format might be beneficial to some appraisers.

Or maybe a "pop up" version

 

[djd09]

Sorry, I want to be 100% clear on what you mean, and I am not.

In the case cited (500 SF error in reported GLA), do you think that report would violate SR 2-1(a) or not?

STANDARDS RULE 2-1, GENERAL REPORTING REQUIREMENTS
Each written or oral real property appraisal report must:
(a) clearly and accurately set forth the appraisal in a manner that will not be misleading;

oh this is comical...was it a hybrid?

 

[djd09]

USPAP does not even require a measurement...

 

[George Hatch]

USPAP is about appraiser conduct. What the appraiser actually did or didn't do.

If public records has an error the source of that error is in the public records. MLS, building permits, surveys, title reports, termite reports, whatever - none of those data sources can be considered perfectly accurate on the 100% basis.

If an appraiser uses that information there is still an error, but the appraiser isn't the one who made the error. It's a standard assumption that we assume the information being used is true and correct, and we explicitly assert that in our SR2-3 certifications. "to the best of my knowledge and belief".

Where the definition of "misleading" that they were using becomes a problem is that "...unintentionally misrepresenting, misstating..." clause. There is a misstatement, it was unintentional on the appraiser's part, it is often beyond the control or the knowledge of the appraiser but under this definition it could still be attributed to them by someone acting in bad faith.

As an illustration of the controversy,
djd09 has USED that definition - in bad faith - many times on this forum to say that if a 3rd party inspection has an error and the appraiser relies in part on that information in a desktop SOW assignment then the appraiser was "misleading". His interpretation of it is that the appraiser is 100% responsible for the accuracy of the data regardless of its cause or source.

Regardless if the ASB ever intended the term to be interpreted that way, the manner in which it was worded enabled djd09 and others who want to act in bad faith and under the logical disconnect to use it that way despite the open, notorious and universally accepted common sense reality that appraisers use imperfect data all the time. In spite of the fact that appraisers qualify their usage of the information by disclosing "to the best of my knowledge and belief". Despite the point that it's impossible to perform any appraisal without the use of assumptions in lieu of certainty with some of this data. If we had to be 100% certain of every fact in support of an appraisal we wouldn't be able to complete any assignment.

That's why some appraisers disagreed with the manner in which that definition was worded. And as it turns out that includes at least some of the appraisers serving on the ASB.