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APPROVED
BY THE CALIFORNIA STATE
OFFICE OF REAL ESTATE APPRAISERS
FOR QUALIFYING & CONTINUING EDUCATION
OREA COURSE PROVIDER
#CP191803
2012-2013 USPAP Changes
____________________________________________________________
2012-2013
7hr National USPAP Update Course
Schedule of
California Live USPAP Classes
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Anaheim 1/11/2012
Fresno – 1/12/2012
San Francisco 1/13/2012
Thousand Oaks 1/20/2012
Burbank 1/24/2012
Sacramento 1/26/2012 |
Riverside 2/02/2012
Carlsbad 2/03/2012
Pleasanton – 2/23/2012
Roseville – 2/24/2012
San Jose -
3/23/2012
Modesto – 3/24/2012 |
The 2012-2013 edition of USPAP will be
valid for two years, effective January 1, 2012 through
December 31, 2013. The new edition also includes
guidance from the ASB in the form of the USPAP Advisory Opinions and the USPAP
Frequently Asked Questions (FAQs)
There are some significant changes
in 2012 that will affect Appraisers in the new USPAP including:
While USPAP has
always required that appraisers develop an opinion of "reasonable
exposure time" whenever it was relevant to the value definition (i.e. market
value), appraisers were not necessarily required to report the opinion of EXPOSURE
TIME.
The new requirement
is that appraisers report the EXPOSURE TIME in the appraisal, anytime it
is developed (and it MUST be developed when it is relevant to the
definition of value).
Bottom line: We are now required to report EXPOSURE TIME when estimating
market value.
Remember, EXPOSURE
TIME is NOT the same as "Marketing Time." Most appraisers already
include an estimate of "marketing time" (especially when completing "form
reports" that require a checkbox), so this will require the addition of
specific statements to indicate the appraiser's opinion of the reasonable
EXPOSURE TIME that was developed in the process of estimating Market Value.
The ASB has added a
definition of EXPOSURE TIME to the USPAP document (see new Definitions below).
While Exposure Time
and Marketing Time may frequently be a similar number, it is important to
clearly understand the difference - there are times when these estimates may
be substantially different.
Exposure time is a
"retrospective" opinion, looking back (from the effective date) to the beginning
of the "hypothetical" process of selling the asset, so that the sale would have
been consummated on the "effective date" of appraisal.
While marketing time
is a "forward looking" estimate (from the effective date), to estimate the amount
of time it might take a seller (sometimes the Intended User of the appraisal),
to market and sell the asset.
The existing requirement to disclose any prior services, if performed in the
preceding 3 years, has been "upgraded" and now requires certification
whether you have OR HAVE NOT performed any services in the preceding 3
years. Some Clients have required this since 2010, but it was not required
by USPAP. We recommend the following language be inserted into your report
certification.
I have performed no (or the specified) services, as an appraiser or in any other
capacity, regarding the property that is the subject of this report within the
three-year period immediately preceding acceptance of this assignment.
With
regard to residential "form reports" that won't allow changes to the
certification, it will be necessary to include a "supplemental certification"
page. Some of the software providers have already designed a supplemental
certification form that can be added to form reports, in order to help with
compliance, or you can create your own, however, be careful to use an addendum
page which includes date and signature as both of these items must
be included in a "certification."
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Revisions to
DEFINITIONS of “Client,” “Extraordinary Assumption,” and
“Hypothetical Condition,” as well as a new definition of
“Exposure Time”
CLIENT:
the party or parties who engage, by employment or
contract, an appraiser in a specific assignment.
Comment: The client may be an individual, group, or entity, and may engage
and communicate with the appraiser directly or through an agent.
EXPOSURE TIME:
estimated length of time that the property interest being appraised would have
been offered on the market prior to the hypothetical consummation of a sale at
market value on the effective date of the appraisal.
Comment: Exposure time is a retrospective opinion based on an analysis of
past events assuming a competitive and open market.
EXTRAORDINARY ASSUMPTION:
an assumption, directly related to a specific assignment, as of
the effective date of the assignment results, which, if found to be false, could
alter the appraiser’s opinions or conclusions.
Comment: Extraordinary assumptions presume as fact otherwise uncertain
information about physical, legal, or economic characteristics of the subject
property; or about conditions external to the property, such as market
conditions or trends; or about the integrity of data used in an analysis.
HYPOTHETICAL
CONDITION: a
condition, directly related to a specific assignment, which is contrary to what
is known by the appraiser to exist on the effective date of the assignment
results, but is used for the purpose of analysis.
Comment:
Hypothetical conditions are contrary to known facts about physical, legal, or
economic characteristics of the subject property; or about conditions external
to the property, such as market conditions or trends; or about the integrity of
data used in an analysis.
Moves most of
the requirements, related to Record Keeping, from the ETHICS RULE to the new
RECORD KEEPING RULE. This was done so that minor record keeping
infractions would not be viewed, by the state regulatory agencies, as "ethical"
violations, however, the ETHICS RULE still prohibits "willfully and knowingly"
violating the RECORD KEEPING RULE.
Advisory Opinion 21
was significantly updated and edited to include more current examples and to
reflect other recent USPAP changes.
Standard 7
was significantly changed to reflect current practice in the
personal property appraisal discipline.
Standard 8
was edited to reflect these and other changes in the USPAP
document. If you appraise personal property, we
recommend a complete review of these revised STANDARDS.
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