USPAP 2008–2009
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Each written personal property appraisal
report must be prepared under one of the following three options and prominently
state which option is used: Self-Contained Appraisal Report, Summary Appraisal
Report, or Restricted Use Appraisal Report.(note85) |
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Comment: When the intended users include parties other than the client, either a Self-Contained Appraisal Report or a Summary Appraisal Report must be provided. When the intended users do not include parties other than the client, a Restricted Use Appraisal Report may be provided.
The essential difference among these three options is in the content and level of information provided. The appropriate reporting option and the level of information necessary in the report are dependent on the intended use and intended users.
An appraiser must use care when characterizing the type of report and level of information communicated upon completion of an assignment. An appraiser may use any other label in addition to, but not in place of, the label set forth in this Standard for the type of report provided.
The report content and level of information requirements set forth in this Standard are minimums for each type of report. An appraiser must supplement a report form, when necessary, to ensure that any intended user of the appraisal is not misled and that the report complies with the applicable content requirements set forth in this Standards Rule.
A party receiving a copy of a Self-Contained Appraisal Report, Summary Appraisal Report, or Restricted Use Appraisal Report in order to satisfy disclosure requirements does not become an intended user of the appraisal unless the appraiser identifies such party as an intended user as part of the assignment.
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(a) |
The content of a Self-Contained Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum:
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(i) |
state the identity
of the client and any intended users, by name or type;(note86) |
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Comment: An appraiser must use care when identifying the client to ensure a clear understanding and to avoid violations of the Confidentiality section of the ETHICS RULE. In those rare instances where the client wishes to remain anonymous, an appraiser must still document the identity of the client in the workfile but may omit the clients identity in the report.
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(ii) |
state
the intended use of the appraisal;(note87) |
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(iii) |
describe information sufficient to identify the property involved in the appraisal, including the physical and economic property characteristics relevant to the assignment;
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(iv) |
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(v) |
state the type and definition
of value and cite the source of the definition; |
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Comment: Stating the definition of value also requires any comments needed to clearly indicate to the intended users how the definition is being applied.(note88)
When reporting an opinion of market value, state whether the opinion of value is:
When an opinion of market value is not in terms of cash or based on financing terms equivalent to cash, summarize the terms of such financing and explain their contributions to or negative influence on value.
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(vi) |
state the effective date of the appraisal and
the date of the report;(note89) |
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Comment: The effective date of the appraisal establishes the context for the value opinion, while the date of the report indicates whether the perspective of the appraiser on the market and property as of the effective date of the appraisal was prospective, current, or retrospective.
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(vii) |
describe the scope of work used to develop the appraisal;(note90)
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Comment: Because intended users reliance on an appraisal may be affected by the scope of work, the report must enable them to be properly informed and not misled. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed. When any portion of the work involves significant personal property appraisal assistance, the appraiser must describe the extent of that assistance. The signing appraiser must also state the name(s) of those providing the significant personal property appraisal assistance in the certification, in accordance with Standards Rule 8-3.(note91) |
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(viii) |
describe the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income approach must be explained;(note92)
Comment: A Self-Contained Appraisal Report must include sufficient information to indicate that the appraiser complied with the requirements of STANDARD 7. The amount of detail required will vary with the significance of the information to the appraisal.
The appraiser must provide sufficient information to enable the client and intended users to understand the rationale for the opinions and conclusions, including reconciliation of the data and approaches, in accordance with Standards Rule 7-6.
When reporting an opinion of market value, a summary of the results of analyzing the subject sales, offers, options, and listings in accordance with Standards Rule 7-5 is required. If such information was unobtainable, a statement on the efforts undertaken by the appraiser to obtain the information is required. If such information is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required.
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(ix) |
state, as appropriate to the class of personal property involved, the use of the property existing as of the date of value and the use of the property reflected in the appraisal; and, when an opinion of the appropriate market or market level was developed by the appraiser, describe the support and rationale for that opinion;
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Comment: In the context of personal property, highest and best use may equate to the choice of the appropriate market or market level for the type of item, the type and definition of value, and intended use of the report.
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(x) |
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(xi) |
include a signed certification in accordance with Standards Rule 8-3.
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(b) |
The content of a Summary Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum:
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Comment: The essential difference between the Self-Contained Appraisal Report and the Summary Appraisal Report is the level of detail of presentation.
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(i) |
state the identity of the client and any intended users, by name or type;(note93)
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Comment: An appraiser must use care when identifying the client to ensure a clear understanding and to avoid violations of the Confidentiality section of the ETHICS RULE. In those rare instances where the client wishes to remain anonymous, an appraiser must still document the identity of the client in the workfile but may omit the clients identity in the report.
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(ii) |
state
the intended use of the appraisal;(note94)
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(iii) |
summarize information sufficient to identify the property involved in the appraisal, including the physical and economic property characteristics relevant to the assignment;
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(iv) |
state the property interest appraised;
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(v) |
state the type and definition of value and cite the source of the definition;
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Comment: Stating the definition of value also requires any comments needed to clearly indicate to the intended users how the definition is being applied.(note95)
When reporting an opinion of market value, state whether the opinion of value is:
When an opinion of market value is not in terms of cash or based on financing terms equivalent to cash, summarize the terms of such financing and explain their contributions to or negative influence on value.
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(vi) |
state the effective date of the appraisal and the date of the report;(note96)
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Comment: The effective date of the appraisal establishes the context for the value opinion, while the date of the report indicates whether the perspective of the appraiser on the market and property as of the effective date of the appraisal was prospective, current, or retrospective.
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(vii) |
summarize the scope of work used to develop the appraisal;(note97)
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Comment: Because intended users reliance on an appraisal may be affected by the scope of work, the report must enable them to be properly informed and not misled. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed.
When any portion of the work involves significant personal property appraisal assistance, the appraiser must summarize the extent of that assistance. The signing appraiser must also state the name(s) of those providing the significant personal property appraisal assistance in the certification, in accordance with Standards Rule 8-3.(note98)
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(viii) |
summarize the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income approach must be explained;(note99)
Comment: A Summary Appraisal Report must include sufficient information to indicate that the appraiser complied with the requirements of STANDARD 7. The amount of detail required will vary with the significance of the information to the appraisal.
The appraiser must provide sufficient information to enable the client and intended users to understand the rationale for the opinion and conclusions, including reconciliation of the data and approaches, in accordance with Standards Rule 7-6.
When reporting an opinion of market value, a summary of the results of the analysis of the subject sales, offers, options, and listings in accordance with Standards Rule 7-5 is necessary. If such information was unobtainable, a statement on the efforts undertaken by the appraiser to obtain the information is required. If such information is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required.
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(ix) |
state, as appropriate to the class of personal property involved, the use of the property existing as of the date of value and the use of the property reflected in the appraisal; and, when an opinion of the appropriate market or market level was developed by the appraiser, summarize the support and rationale for that opinion;
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Comment: In the context of personal property, highest and best use may equate to the choice of the appropriate market or market level for the type of item, the type and definition of value, and intended use of the report.
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(x) |
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(xi) |
include a signed certification in accordance with Standards Rule 8-3.
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(c) |
The content of a Restricted Use Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum:
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(i) |
state the identity of the client, by name or type;(note100) and state a prominent use restriction that limits use of the report to the client and warns that the appraisers opinions and conclusions set forth in the report may not be understood properly without additional information in the appraisers workfile;
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Comment: An appraiser must use care when identifying the client to ensure a clear understanding and to avoid violations of the Confidentiality section of the ETHICS RULE. In those rare instances when the client wishes to remain anonymous, an appraiser must still document the identity of the client in the workfile but may omit the clients identity in the report.
The Restricted Use Appraisal Report is for client use only. Before entering into an agreement, the appraiser should establish with the client the situations where this type of report is to be used and should ensure that the client understands the restricted utility of the Restricted Use Appraisal Report.
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(ii) |
state the intended use of the appraisal;(note101)
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Comment: The intended use of the appraisal must be consistent with the limitation on use of the Restricted Use Appraisal Report option in this Standards Rule (i.e., client use only).
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(iii) |
state
information sufficient to identify the property involved in the appraisal; |
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(iv) |
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(v) |
state
the type of value, and cite the source of its definition;(note102) |
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(vi) |
state
the effective date of the appraisal and the date of the report;(note103) |
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Comment: The effective date of the appraisal establishes the context for the value opinion, while the date of the report indicates whether the perspective of the appraiser on the market and property as of the effective date of the appraisal was prospective, current, or retrospective.
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(vii) |
state the scope of work used to develop the appraisal;(note104)
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Comment: Because the clients reliance on an appraisal may be affected by the scope of work, the report must enable them to be properly informed and not misled. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed.
When any portion of the work involves significant personal property appraisal assistance, the appraiser must state the extent of that assistance. The signing appraiser must also state the name(s) of those providing the significant personal property appraisal assistance in the certification, in accordance with Standards Rule 8-3.(note105)
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(viii) |
state the appraisal methods and techniques employed, state the value opinion(s) and conclusion(s) reached, and reference the workfile; exclusion of the sales comparison approach, cost approach, or income approach must be explained;(note106)
Comment: An appraiser must maintain a specific, coherent workfile in support of a Restricted Use Appraisal Report. The contents of the workfile must include sufficient information to indicate that the appraiser complied with the requirements of STANDARD 7 and for the appraiser to produce a Summary Appraisal Report. The file must be available for inspection by the client (or the clients representatives, such as those engaged to complete an appraisal review), state enforcement agencies, such third parties as may be authorized by due process of law, and a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation.
When reporting an opinion of market value, information analyzed in compliance with Standards Rule 7-5 is significant information that must be disclosed in a Restricted Use Appraisal Report. If such information was unobtainable, a statement on the efforts undertaken by the appraiser to obtain the information is required. If such information is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required.
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(ix) |
state, as appropriate to the class of personal property involved, the use of the property existing as of the date of value and the use of the property reflected in the appraisal; and, when an opinion of the appropriate market or market level was developed by the appraiser, state that opinion;
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Comment: In the context of personal property, highest and best use may equate to the choice of the appropriate market or market level for the type of item, the type and definition of value, and intended use of the report.
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(x) |
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(xi) |
include a signed certification in accordance with Standards Rule 8-3. |
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USPAP 2008–2009 Edition
©The Appraisal Foundation