New edition of USPAP updates ethics rules on disclosure

The Appraisal Foundation (TAF) just released the 2010-2011 Uniform Standards of Professional Appraisal Practice (USPAP), effective January 1, 2010 through December 31, 2011. As with prior editions, the new release includes guidance from the Appraisal Standards Board (ASB) in its USPAP Advisory Opinions and the USPAP Frequently Asked Questions (FAQs). Significant changes include:

•    The Conduct section of the Ethics Rule now requires that, prior to accepting an engagement (or if discovered during the engagement), an appraiser must disclose to the client and certify in the report any services that he/she performed related the subject property within the prior three years, as an appraiser or in any other capacity.

•    The Jurisdictional Exception Rule now states that an exception may only exist if it precludes an appraiser from complying with USPAP. There are also related revisions that apply to the citation and disclosure of the source of the jurisdictional exception.

“The ASB made several revisions that we believe improve the clarity, understandability and enforceability of USPAP,” says 2009 ASB chair Sandra Guilfoil. Clearly the revisions to the Ethics Rule are the most controversial. “The ASB must always be mindful of its mission to promote and maintain a high level of public trust,” Guilfoil added. “This new requirement allows the client to determine whether there may be any real or perceived conflicts of interest prior to engaging the appraiser in the assignment.”

Although the revisions won’t take effect until next year, TAF is encouraging appraisers to familiarize themselves with the changes now. Copies are available at TAF (print for $75 and electronic copies for $60).