The Uniform Standards of Professional Appraisal Practice (USPAP) is the U.S. appraisal profession’s generally recognized ethical and performance standards. USPAP was embraced in 1989 and includes standards for all kinds of assessment services, including real estate, personal property, business, and mass assessment.
Full compliance is needed for federally-related real estate transactions involving state-licensed and state-certified evaluators. Every two years, USPAP is updated to provide evaluators with the information they need to provide unbiased and thoughtful value opinions. If you work under USPAP, you need to take special caution to ensure you’re staying compliant. Below are some of the more common USPAP violations and what they mean for you.
Common Violations of USPAP
- Failure to correctly characterize the property
Misrepresentation of the subject property is a common USPAP violation, for example, when a commercial property is appraised as a residential or mixed-use property.
- Use of unsupported site value
Another common breach is the use in the cost approach of unsupported site value. This is something that many boards have cited in appraisal reports as a prevalent deficiency.
- Failure to analyze sales history
Failing to report and evaluate all sales agreements, options, and listings, as of the effective date of the assessment or three years prior to the effective date of the sales history of the property is another USPAP violation. Failure to report and analyze the subject’s previous listings when the listings would have a significant impact on the property’s results’ credibility is a common example of this violation.
- Failure to submit an appraisal report the meets USPAP requirements
When writing an appraisal report, it needs to meet the USPAP requirements. Requirements in the report are just the minimum, but if not met, it becomes a violation.
- Failure to include number and title with signature
As you know, failing to include your certification or license number and title with your signature is a violation of USPAP. It would also be a breach of state law or regulation, depending on who stipulates the requirement to include your certification or license number and title with your signature.
Contact an Attorney
It’s crucial to avoid committing any USPAP violations. Let the Law Office of Jack R. Sturgill help you ensure that you uphold the USPAP. Contact us today and set up a free consultation.