Last week, the ASA’s BV Committee submitted its comment letter to the Appraisal Standards Board’s third exposure draft of proposed changes to the 2014-2015 edition of the Uniform Standards of Professional Appraisal Practice (USPAP). The BVC approves and accepts many of the board’s changes, in particular its clarification in the “Report Options” section between a standard appraisal and a restricted appraisal. These two options conform to the ASA’s BV standards, the letter says, and “allow appraisers flexibility in their ‘scope of work’ and the fees they charge.” The BVC also agrees with the new requirement to state the identity of a client and intended users by name or type as well as citing the appraiser’s source for the premise of value.
At the same time, the BVC expressed several continuing concerns:
- As stated in its response to the ASB’s second exposure draft, the BVC still believes the proposed definition of “assignment results,” particularly as related to litigation engagements, contradicts the trend in federal proceedings to exclude draft appraisals from discovery. In addition, defining what items constitute “assignment results” when an appraiser acts as a consulting expert “may not be feasible,” the BVC warns. Should the ASB still adopt its proposal, the BVC suggests it adopt a litigation exception to reduce any confusion and “unintended consequence.”
- Although the ASB has withdrawn its proposed new definition of a report, the BVC worries that a draft report may still fall within the default definition. “We believe that the report should be defined as a ‘certified’ document and should exclude any drafts containing ‘assignment results.’” Otherwise, the term “assignment results” might be construed to include “each and every conclusion the appraiser develops in the course of forming the final opinion, including those contained in both draft reports and final reports.”
- The BVC disagrees with proposed new certification requirements related to prior services as well as current/prospective interests “in their entirety.” The proposal would require disclosure for any services regarding the subject property, which could impose “a potentially damaging breach to the legal concept of enterprise trade-secrets integrity, as well as professional confidentiality,” it says. “As long as the appraiser is independent and objective, any prior involvement is considered confidential information that the appraiser should not disclose.”
“Overall, we were pleased with the changes that the ASB included in the third exposure draft,” says BVC chair Linda Trugman in her weekly E-Update to members. “Perhaps it was because of many of our responses to the first and second draft,” and she encourages all BV appraisers to participate in the standards process by endorsing the BVC’s letter or submitting a separate response.