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USPAP – What is it Exactly?
USPAP is the acronym for Uniform Standards of Professional Appraisal Practice. You often hear the term USPAP, either in the context that an appraisal must be USPAP compliant or that an appraiser needs to make revisions to a report in order for the report to be compliant with USPAP. The specific certifications that are found in appraisals as a signed certification page are dictated by USPAP.
USPAP is considered to be the quality control standard by which all real property, personal property, intangibles and business valuation appraisal analysis and reports must meet. It represents the generally accepted and recognized standards of appraisal practice.
USPAP has Standards and Statements which cover the development and reporting of valuation and are considered binding. There are also quite a number of Advisory Opinions which are not binding, however, provide advisory opinions on various aspects of the USPAP.
USPAP was developed in the 1980’s by an ad hoc committee representing the nine major U.S. and Canadian appraisal organizations. Following the savings and loan crisis around the same time, the Appraisal Foundation (TAF) was also formed by these groups and authorized by Congress as the source of appraisal standards and appraiser qualifications. The TAF took responsibility for administration of USPAP. The Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) authorized the Appraisal Subcommittee (ASC) which provides oversight to TAF. The Appraisal Standards Board (ASB) of the TAF publishes, promotes and maintains the USPAP.
USPAP is updated in a two year cycle, which begins on January 1 of even number years. The next USPAP is already available and will be effective January 1, 2014 and will remain in effect until December 31, 2015.
As a part of their state licensure, appraisers are required to be knowledgeable of USPAP. This generally occurs through the successful completion of periodic continuing education.
Valuation Management Group performs commercial and residential appraisal reviews to ensure compliance with USPAP. We will be keeping our appraisers and clients informed of the 2014-2015 USPAP updates.