Practising valuers Association (India)

Introduces

“Uniform Standards of professional Appraisal /Valuation Practice”

UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE

As promulgated by the
Appraisal standards Board of
The Appraisal Foundation
DEFINITIONS
For the purpose of these standards,the following definitions apply:

ADVOCACY: representing the cause or interst of another,even if that cause or interest does not necessarily coincide with one’s own beliefs, opinions, or recommendations.

APPRAISAL : (noun)the act or process of developing an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services. Complete Appraisal :the act or process of developing an opinionOf value developed without invoking the DEPARTURE RULE. Limited Appraisal :the act or process of developing an opinion of Value or an opinion of value developed without under and Resulting from invoking the DEPARTRE RULE. Comment: An appraisal must be numerically expressed as a specific amount ,as a range of numbers,or as a relationship e.g. not more than,less than) to a previous value opinion or numerical benchmark (e.g. ,assessed value, collateral value).

APPRAISAL CONSULTING :the act or process of developing an analysis,recommendation,or opinion to solve a problem, where an opinion of value is a component of the analysis leading to the assignment results.

Comment : An appraisal consulting assignment involves an opinion of value but
does not have an appraisal or an appraisal review as its primary purpose.

APPRAISAL PRACTICE : valuation services performed by an individual acting as an appraiser, including but not limited to appraisal, appraisal review,or appraisal consulting.


Comment : Appraisal practice is provided only by appraisers, while valuation services are provided by a variety of professionals and others. The terms appraisal, appraisal review, and appraisal consulting are intentionally generic and are not mutually exclusive. For example, an opinion of value may be required as part of an appraisal review and is required as a component of the analysis in an appraisal consulting assignment. The use of other nomenclature for an appraisal review, or appraisal consulting assignment (e.g. analysis ,counseling, evaluation, studfy, submission, or valuation )does not exempt an appraiser from adherence to the Uniform Standards of professional Appraisal Practice.


APPRAISAL REVIEW :the act or process of developing and communicating an opinion about the quality of another appraiser’s work.

Comment : The subject of an appraisel review assignment may be all or part of a report, workfile,or a combination of these.

APPRAISER :One who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective.

Comment : such expectation occurs when individuals,either by choice or
bqy requirement placed upon them or upon the services they provide by law, regulation,or agreement with the client or intended users ,repersenting that they comply. (Sec. PREAMBLE.)

APPRAISER’S PEERS: other appraisers who have expertise and competency in the same or a similar type of assignment
.
ASSIGNMENT :a valuation service provided as a consequence of an agreement between an appraiser and a client.

ASSIGNMENT RESULTS : an appraiser’s opinions and conclusions developed specific to an assignment.

Comment:Assignment results include an appraiser’s ;
“ opinions or conclusions developed in an appraisal assignment,such as value, “ opinions of adequacy,relevancy,or reasonableness developed in an appraisal
review assignment;or
‘’ opinions,conclusions,or recommendations developed in an appraisal cosulting
assignment.

ASSUMPTION: that which is taken to be true.

BLAS : a preference or inclination that precludes an appraiser’s impartially, independence,or objectivity in an assignment.
BINDING REQUIREMENTS : all or part of a standards Rule of USPAP from which departure is not permitted.(Sec. DEPARTURE RULE.)

BUSINESS ENTERPRISE : an entity puruing an economic activity.

BUSINESS EQUITY : the interests,benefits,and rights inherent in the ownership of a business enterprise or a part thereof in any form (including, but not necessarily limited
To,capital stock,partnership interests cooperatives,sole proprietorships,options, and warrents).

CASH FLOW ANALYSIS : a study of the anticipated movement of cash into or our of an investment.

CLIENT: the party or parties who engage an appraiser (by employment or contract ) in A specific assignment.

Comment the party identified by the appraiser in an appraisal,appraisal Review,or appraisal consulting assignment (or in the assignment workfile) Is the party or parties with whom the appraiser has an appraiser-client Relationship in the related assignment and may be an individual, group,or Entity.

CONFIDENTIAL INFORMATION : information that is either:
“ identified by the client as confidential when providing it to an appraiser and that is not available from any other source; or
“ classified as confidential or private by applicable law or regulation*
*NOTICE: For example, pursuant to the passage of the Gramm-Leach-Bliley Act in November 1999,some public agencies have adopted privacy regulations that appraisers. As,a result ,the Federal Trade Commission issued a rule focused on the protection of “non-public personal information”provided by consumers to those involved in financial
activities “found to be closely related to banking or usual in connection with the trasaction of banking .” These activities have been deemed to include “appraising real or personal property.”(Quotations are from the Federal Trade Commission, Privacy of Consumer Financial information ;Final Rule, 16 CFR Part 313.)

COST :the amount required to create,produce,or obtain a property .

Comment: Cost is either a fact or an estimate of fact.

EXTRAORDINARY ASSUMPTION :an assumption,directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions .

Comment :Extraordinary assumptions presume as fact otherwise uncertain Information about pysical ,legal ,or economic characteristics of the subject Property;or about conditions external to the property ,such as market conditions Or trends ;or about the integrity of data used in an analysis.

FEASIBILITY ANALYSIS :a study of the cost –benefit relatioship of an economic Endeavor

HYPOTHETICAL CONDITION: that which is contrary to what excists but is Supposed for the purpose of analysis.

Comment :Hypotrhetical conditions assume conditions contrary to known facts About physical,legal,or economic characteristics of the subject property; or about The integrity of data used in an analysis.

INTANGIBLE PROPERTY (INTANGIBLE ASSETS):nonphysical assets,including b Not limited to franchises,trademarks, parents, copyrights, goodwill,equities, securitiess, and contracts as distinguished from physical assets such as facilities and equipment.

INTENDED USE :the use or uses of an appraiser’s reported appraisal, appraisal review, Or appraisal consulting assignment options and conclusions,as identified by the appraiser Based on communication with the client at the time of the assignment.

INTENDED USER : the client and any other party as identified, by name or type,as Users of the appraisal,appraisal review, or appraisal consuting report by the appraiswer on the on the basis of communication with the client at the time of the assignment.

JURISDICTIONAL EX CEPTION :an assignment condition that voids the force Of a part or parts of USPAP,when compliance with part or parts of USPAP is Contrary to law or public polic plicy applicable to the assignment.

MARKET VALUE: a type of value, stated as an opinion,that presumes the transfer of a property (i.e.,aright of ownership or a bundle of such rights),as of a certain date,under specific conditions set forth in the definition of the terms identified by the appraiser as applicable in an appraisal.

Comment :Forming an opinion of market value is the purpose of many real Property appraisal assignments, particularly when the client’s intended use Includes more than one intended user. The conditions included in market Perspectives for development of the opinion. These conditions may vary from


1. the relationship, knowledge, and motivation of the parties (i.e.,seller and buyer);
2. the terms of sale (e.g.;cash, cash equivalent, or other terms);and
3. the conditions of sale (e.g.; exposure in a competitive market for a reasonable time prior to sale).

Appraisers are cautioned to identify the exact definition of market value, and its authority, applicable in each appraisal completed for the pupose of market value.


MASS APPRAISAL : the process of valuting a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical
testing.

MASS APPRAISAL MODEL : a mathematical expression of how supply and demand factors interact in a market.

PERSONAL PROPERTY : identifiable tangible objects that are considered by the general public as being ‘’personal’’-for example,furnishing, artwork , antiques, gems and jewellary, collectibles,machinary and equipment;all artwork , antiques, gems and jewellary, collectibles,machinary and equipment;all tangible property that is not classified as real estate.

PRICE: the amount asked, offered, or paid for a property.

Comment : once stated, price is a fact, whether it is publicly disclosed or retained in private. Because of the finacial capabilities, motivations, special interests of a given buyer or seller, the price paid for a property may or may not have any relation to the value that might be ascribed to that property by others.

REAL ESTATE: an identified parcel or tract of land, including improvements, if any.

REAL PROPERTY : the interests, benefits, and rights inherent in the ownership of real estate.

Comment: in some jurisdictions, the terms real estate and real property Have the same legal meaning. The separate definitions recognize the traditional distinction between the two concepts in appraisal theory.

REPORT: any communication, written or oral, of an appraisal, appraisal review, or appraisal consulting service that is transmitted to the client upon completion of an assignment.

Comment : Most reports are written and most clients mandate written reports.Oral report requirements (see the Record Keeping section of the ETHICS RULE) are included to cover court testimony and other oral communications of an appraisal, appraisal review, or appraisal consulting service.

The types of written reports listed below apply to real property, personal Property , and business appraisal assignment, as indicated:

Appraisal Report : a written report prepared under Standards Rule 10-2(a)

Self-Contained Appraisal Report : a written report prepared under Standards Rule 2-2(a) or 8-2(a).

Summary Appraisal Report : a written report prepared under Standards Rule 2-2(b) or 8-2(b).

Restricted Use Appraisal Report: a written report prepared under Standards Rule 2-2 (c ), 8-2( c), 0r 10-2(b).

SCOPE OF WORK :the amount and type of information researched and the analysis and analysis applied in an assignment. Scope of work includes,but is not limited to, the following:

: . the degree to which the property is inspected or identified;
. the extent of research into physical or economic factors that could affect the property ;
. the extent of data research; and

. the type and extent of analysis applied to arrive at opinions or
conclusions.

SIGNATURE: personalized evidence indicating authentication of the work performed by the appraiser and the acceptance of the responsibility for content, analyses, and the conclusions in the report.


Comment : A singnature can be represented by a handwritten mark, a
Digitized image cotrolled by a personalized identification number, or
Other media, where the appraiser has sole personalized control of
affixing the signature.

SPECIFIC REQUIREMENTS: all or part of a Standards Rule of USPAP from which departure is permitted under certain limited conditions. (Sec DEPARTURE RULE.)

SUPPLEMENTAL STANDARDS: requirements issued by government agencies, government sponsored enterprises, or other entities that establish public which add to the purpose, intent and content of the requirements in USPAP, that have a material effect on the development and reporting of assignment results.

Comment: supplemental standards are published in regulations, rules, policies, and other similar documents, and have the same applicability to all properties or assignment in a particular category or class regardless of the contracting entity.

Contractual agreements that are unique to the contracting entity and which apply specifically to a particular property or assignment are not
Supplemental standards.

VALUE: the monetary relationship between properties and those who buy, sell, or use those properties.

Comment: Value expresses an economic concept. As such, it is never a fact but always an opinion of the worth of a property at a given time in accordance with a specific definition of value. In appraisal practice, value must always be qualified – for example, market value, liquidation value, or investment value.

VALUATION SERVICES: services pertaining to aspects of property value.

Comment: valuation services pertain to all aspects of property value and
Include services performed by appraisers and by others.

WORKFILE: documentation necessary to support an appraiser’s analyses, opinions, and conclusions.

PREAMBLE
The purpose of the Uniform Standards of professional Appraisal Practice (USPAP) is to
Promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. It is essential that appraisers develop and communicate their analyses, opinions, and conclusions to intended users of their services in a manner that is meaningful and not misleading.

The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services.the appraiser’s responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical obligations on those who serve in this capacity. USPAP reflects the current standards of the appraisal profession.

USPAP does not establish who or which assignments must comply. Neither The Appraisal Foundation nor its Appraisal Standards Board is a government entity with the power to make, judge, or enforce law. Compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation or by agreement with the client or intended users. When not obligated, individuals may still choose to comply.

USPAP addresses the ethical and performance obligations of appraisers through DEFINITIONS, Rules, Standards, Standard Rules, and Statements.

? The DEFINITIONS establish the application of certain
Terminology in USPAP.
? The ETHICS RULE sets forth the requirements for integrity,
Impartiality, objectivity, independent judgement, and ethical
conduct.
? The COMPETENCY RULE presents pre- assignment and
? assignment conditions for knowledge and experience.
? THE JURISDICTIONAL EXCEPTION RULE presents the balance of USPAP if a portion is contrary to law or public policy of a jurisdiction.
? The SUPPLEMENTAL STANDARDS RULE provides the means for government agencies, government sponsored enterprises, and other entities that establish public policy to augment USPAP.
? The ten standards establish the requirements for appraisal, appraisal review, and appraisal consulting service and the manner in which each is communicated. Each Standard includes a series of Standards Rules that contain binding requirements, as well as specific requirements to which the DEPARTURE RULE may apply under certain conditions.

- STANDARDS 1and 2 establish requirements for the
Development and communication of a real property appraisal.
- STANDARD 3 establishes requirements for the development
- And communication of an appraisal review.
- STANDARD 4and 5 establish requirements for development and communication of a real property appraisal consulting assignment.
- STANDARD 6 establishes requirements for the development and communication of a mass appraisal.
- STANDARDS 7and 8 establish requirement for the development and communication a personal property appraisal.
- STANDARDS 9 and 10 establish requirements for the development and communication of a business or intangible asset appraisal.

? Statements on Appraisal Standards clarify, interpret, explain, or elaborate on a Rule or Standards Rules.
? Comments: are an intergal part of USPAP and have the same weight as the component they address. These extensions of the DEFINITIONS, Rules, and Standards Rules provide interpretation and establish the context and conditions for application.

OCTOBER 1,2004
UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE
2004 EDITION

ETHICS RULE

To promote and preserve the public trust inherent in professional appraisal pactice, an appraiser must observe the highest standards of professional ethics. This ETHICS RULE is divide into four sections: Conduct, Management,Confidetiality, and Record Keeping. The first three sections apply to all four sections apply to appraisal practice performed under Standards 1 through 10.


Compaliance with these Standards is required when either the service or the appraiser is obligated by law or regulation, or by agreement with the client or intended users, to comply. In addition to these reqiurments, an individyual should comply any time that individual represents that he or she is performing the service as an appraiser


An appraiser must not misrepresent his or her role when providing valuation services that are outside of appraisal practice.


Conduct:
An appraiser must perform assignment ethically and competently, in accordance with USPAP and any supplemental standards agreed to by the appriser in accepting the assignment. An appraiser must not engage in criminal conduct. An appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests.


In appraisal practice, an appraiser must not perform as an advocate for any party or
Issue.

An appraiser must not accept an assignment that includes the reporting of
Predetermined opinions and conclusions.

An appraiser must not communicate assignment results in a misleading or frodulent
Report or knowingly permit an employee or other person to communicate a misleading or fraudulent report.

An appraiser must not use or rely on unsupported conclusions relating to characteristics such as race, color, religion, national origin, gender, marital status,
Familial status, age, receipt of public assistance income, handicap, or an unsupported conclusion that homogeneity of such characteristics is necessary to maximize value.
Management:

The payment of undisclosed fees, commissions, or things of value in connection with the procurement of an assignment is unethical.


It is unethical for an appraiser to accept an assignment, or to have a compensation arrangement for an assignment, that is contingent on any of the following:

1. the reporting of a predetermined results (e.g., opinion of value);
2. a direction in assignment results that favors the cause of the client;
3. the amount of value opinion;
4. the attainment of a stipulated results; or
5. the occurrence of a subsequent event directly related to the appraiser’s opinions and specific to the assignment’s purpose.

Advertising for or soliciting assignments in a manner that is false, misleading, or exaggerated is unethical.


Confidentiality:

An appraiser must protect the confidential nature of the appraiser-client relationship.

An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results.

An appraiser must be aware of, and comply with, all confidentially and privacy laws and regulations applicable in an assignment *.

An appraiser must not disclose confidential information or assignment results prepared for a client to anyone other than the client and persons specifically authorized by the client; state enforcement agencies and such third parties as may be authorized by due process of law; and a duly authorized professional peer review committee expect when such disclosure to a committee would violate applicable law or regulation. It is unethical for a member of a duly authorized professional peer review committee to disclose confidential information presented to the committee.

Record Keeping :

An appraiser must prepare a work file for each appraisal, appraisal review, or appraisal consulting assignment. The work file must include:


• the name of the client and the identity, by name or type, of any other
intended users
• true copies of any written reports, documented on any type of
media ;
• summaries of any oral reports or testimony, or a transcript of tesimony, including the appraiser’s signed and dated certification;and
• all other data, information, and documetation necessary to support the appraiser’s opinions and conclusions and to show compliance with this Rule and all other applicable Standards, or references to the location(s) of such other documentation

an appraiser must retain the work file for a period of at least five (5)
years after proportion or at least two (2) years after final dispositions
of any judicial proceeding in which the appraiser provided testimony
related to the assignment, whichever period expires last.

An appraiser must have custody of his or her work file, or make
Appropriate work file retention, access, and retrieval arrangements with
The party having custody of the work file.

COMPETENCY RULE

Prior to accepting an assignment or entering into an agreement to perform any assignment, an appraiser must properly identify the problem to be addressed and have the knowledge and experience to complete to the assignment competently; or alternatively, must:

1. disclose the lack of knowledge and /or experience to the client before accepting the assignment;
2. take all necessary or appropriate to complete the assignment competently; and
3. describe the lack of knowledge and/or experience and the steps taken to complete the assignment competently in the report.


DEPARTURE RULE

This Rule permits exception from of the Uniform Standards that are classified as specific requirements rather trhan binding requirements. The burden of proof is on the appraiser to decide before accepting an assignment and invoking this Rule that the scope of work appilrd will result in opinions or conclusions that are credible. The burden of disclosure is also on the appraiser to report any departures from specific requirements.
An appraiser may enter into an agreement to perform an assignment in which the scope of work is less than, or different from, the work that would otherwise be required by the specific requirements, provided that prior to entering into such an agreement:

1. the appraiser has determined that the appraisal process to be performed is not so limited that the results of the assignment are no longer credible;
2. the appraiser has advised the client that the assignment calls for something less than, or different from, the work required by the specific requirements and that the report will clearly identified and explain the departure (s) ;and
3. the client has agreed that the performance of a limited appraisal service would be appropriate, given the intended use.

JURISDICTIONAL EXCEPTION RULE

If any part of these standards is contrary to the law or public of any jurisdiction, only that part shall be void and no force or effect in that jurisdiction.

SUPPLEMENTAL STANDARDS RULE

In developing a real property appraisal, an appraiser must identify the problem to be solved and the scope of work necessary to solve the problem, and correctly complete research and analysis necessary to produce a credible appraisal.

Standards Rule 1-1 (This Standards Rule contains binding requirements from which departure is not permitted.)

In developing a real property appraisal, an appraiser must:

(a) be aware of, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal;
(b) not commit a substantial error of omission or commission that significantly affects an appraisal; and
(c) not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results.

Standards Rule 1-2 (This Standards Rule contains binding requirements from which departure is not permitted.)

In developing a real property appraisal, an appraiser must:
(a) identify the client and other intended user;
(b) identify the intended use of the appraiser’s opinions and conclusions
(c) identify the purpose of the assignment, including the type and definition of the value to be developed, and, if the value opinion to be developed is market value, ascertain whether the value is to be the probable price:
(i) in terms of cash; or

(ii) in terms of financial arrangements equipment to cash; or

(iii) in other precisely defined terms; and

(iv) if the opinion of value is to be based on non –market financing or financing with unusual conditions or incentives, the terms of such financing must be clearly identified and the appraiser’s opinion of their contributions to or negative influence on value must be developed by analysis of relevant market data;

(d) identify the effective date of the appraiser’s opinions and conclusions;
(e) identify the characteristics of the property that are relevant to the purpose and intended use of the appraisal, including:

(i) its location and physical, legal, and economic attributes;

(ii) The real property interest to be valued;

(iii) any personal property ,trade fixtures, or intangible items that are not real property but are included in the appraisal;

(iv) any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, or other items of a similar nature; and

(v) whether the subject property is a fractional interst, physical segment, or partial holding;

(f) identify the scope of work necessary to complete the assignment;
(g) identify any extraordinary assumptions necessary in the assignment; and
(h) identify any hypothetical conditions necessary in the assignment.


Standards Rule 1-3 (This Standards Rule contains specific requirements from which departure is permitted. See the DEPARTURE RULE.)

When the value opinion to be developed is market value, and given the scope of work identified in accordance with Standards Rule 1-2 (f), an appraiser must;

(a) identify and analyze the effect on use and value of existing land use regulations, reasonably probable modifications of such land use regulations, economic supply and demand, the physical adaptability of the real estate, and market area trends; and
(b) Develop an opinion of the highest and best use of the real estate.

Standards Rule 1-4 (This Standards Rule contains specific
Requirements from which departure is permitted. See the
DEPARTURTE RULE.)

In developing a real property appraisal, an appraiser must collect,
Verify, and analyze all information applicable to the appraisal problem, given the scope of work identified in a accordance with Standards Rule 1-2 (f).

(a) When a sales comparison approach is applicable, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion.
(b) When a cost approach is applicable, an appraiser must:
i. develop an opinion of site value by an appropriate appraisal method or technique;
ii. analyze such comparable cost data as are available to estimate
the cost new of the improvements (if any); and
iii. analyze such comparable data as are available to estimate the difference between the cost new and the present worth of the improvements (accrued depreciation).
(c) When an income approach is applicable, an appraiser must:

i. analyze such comparable rental data as are available and /or the potential earnings capacity of the property to estimate the gross income potential of the property;

ii. analyze such comparable opertating expense data as are avialble to estimate the operating expenses of the property;

iii. analyze such comparable data as are avalible to estimate rates of capitalization and /or rates of discount; and
iv. base projections of future rent and /or income potential
expenses on reasonably clear and appropriate evidence.
(d) When developing an opinion of the value of a leased fee estate or a leasehold estate, an appraiser must analyze the effect on value,if any, of the terms and conditions of the lease (s)
(e) An appraiser must analyze the effect on value, if any, of the assemblage of the various estates or component parts of a property and refrain from valuing the whole solely by adding together the individual values of the various estates or component parts.
(f) An appraiser must analyze the effect on value, if any,of anticipated public or private improvements, located on or off the site,to the extent that market actions reflect such anticipated improvements as of the effective appraisal date.
(g) An appraiser must analyze the effect on value of any personal property, trade fixtures, or intangible items that are not real property but are included in the appraisal.
(h) When appraising proposed improvements, an appraiser must examine and have available for future examination:
i. plans, specification, or other documentation sufficient identify the scope and character of the proposed improvements;
ii. evidence indicating the probable time of completion of the proposed improvements; and
iii. reasonably clear and appropriate evidence supporting development costs, anticipated earnings, occupancy Projections, and the anticipated competition at the time of Completion.

Standards Rule 1-5(This Standards Rule contains binding requirements from which departure is not permitted.)

In developing a real property appraisal, when the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business:

(a) analyze all agreements of sale, options, or listings of the subject property current as of the effective date of the appraisal; and
(b) analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal.

Standards Rule 1-6 (This Standards Rule contains binding requirements from which departure is not permitted.)

In developing a real property appraisal, an appraiser must:
(a) reconcile the quality of data available and analyzed within the approaches used; and
(b) reconcile the applicability of the approaches used to arrive at the value conclusions(s).

STANDARD 2: REAL PROPERTY APPRAISAL, REPORTING

In reporting the results of a real property appraisal, an appraiser must communicate each analysis, opinion, and conclusion in a manner that is not misleading.

Standards Rule 2-1 (This Standards Rule contains binding requirements from which departure is not permitted.)

Each written or oral real property appraisal report must:
(a) clearly and accurately set forth the appraisal in a manner that will not be misleading;
(b) contain sufficient information to enable the intended users of the appraisal to understand the report properly; and
(c) Clearly and accurately disclose any extraordinary assumption, hypothetical condition, or limiting condition that directly affects the appraisal and indicate its impact on value.

Standards Rule 2-2 (This Standards Rule contains binding requirements from which departure is not permitted.)

Each written real 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.
(a) The content of a self-contained Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum:
(i) state the identity of the client and any intended users, name or type;
(ii) state the intended use of the appraisal;
(iii) describe information sufficient to identify the real estate
involved in the appraisal, including the physical and economic property characteristics relevant to the assignment;
(iv) state the real property interest appraisal;
(v) state the purpose of the appraisal, including the type and
definition of value and its source;
(vi) state the effective date of the appraisal and the date of the
reports;
(vii) describer sufficient information to disclose to the client and any intended users of the appraisal the scope of work used to develop the appraisal;
(viii) state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when the purpose of the assignment is market value, describe the support and rational for the appraiser’s the highest and best use of the real estate;
(xi) state and explain any permitted departures from specific requirements of STANDARDS 1 and the reason for excluding any of the usual valuation approaches; and
(xii) include a signed certification in accordance with Standards Rule 2-3

(b) The content of a Summery Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum:
i. state the identify of the client and any intended users, by name or type;
ii. state the intended use of the appraisal;
iii. summarize information sufficient to identify the real estate involved in the appraisal, including ther physical and economic property characteristics relevant to the assignment;
iv. state the real property interest appraisal ;
v. state the purpose of the appraisal, including the type and
definition of value and its source;
vi. state the effective date of the appraisal and the date of the
report;
vii. summarize sufficient information top disclose to the client and
any intended users of the appraisal ther scope of work used to
develop the appraisal;
viii state all assumptions, hypothetical conditions, and limiting
conditions that affected the analyses, opnions, and conclusions;
ix. Summarize the information analyzed, the appraisal procedures
followed, and the reasoning that supports the analyses, opinions, and conclusions;
x. state the use of the real estate existing as of the date of value
and the use of the real estate reflected in the appraisal; and,
when the purpose of the assignment is market value,
Summarize the support and rational for the appraiser’s
opinion of the highest and best use of the real estate;
xi. state and explain any permitted departures from specific
requirements of STANDARD 1 and the reason for excluding
any of the usual valuation approaches; and
xii. include a signed certification in accordance with Standards
Rule 2-3

(c) The content of a Restricted Use Appraiser Report must be consistent with the intended use of the appraisal and, at a minimum:
i. state the identify of the client, by name or type;
ii. state the intended use of the appraisal;
iii. state information sufficient to identify the real estate involved in the appraisal;
iv. state the real property interst appraisal;
v. state the purpose of the appraisal, including the type of the of value, and refer to the definition of value pertinent to the purpose of the assignment;
vi. state the effective date of the appraisal and the date of the reports;
vii. state the extend of the process of collecting, confirming, and reporting data or refer to an assignment agreement retained in the appraiser’s work file that describes the scope of work to be performed.
viii. State all assumptions, hypothetical conditions and limiting conditions that affect the analyses, opinions, and conclusions;
ix. State the appraisal procedures followed, state the value opinion(s) and conclusion (s) reached, and reference the work file;
x. State the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when the purpose of the assignment is market value, state the appraiser’s opinion of the highest and best use of the real estate;
xi. State and explain any permitted departures from applicable specific requirements of STANDARD 1; state the exclusion of any of the usual valuation approaches; and state a prominent use restriction that limits use of the report to the client and warns that the appraiser’s opinions and conclusions set forth in the report cannot be understood properly without additional information in the appraiser’s work file; and
xii. Include a signed certification in accordance with Standards Rule 2-3

Standards Rule 2-3 (This Standards Rule contains binding requirements from which departure is not permitted.)

Each written real property appraisal report must contain a signed certification that is similar in content to the following form:

I certify that, to the best of my knowledge and belief:
• The statements of fact contained in this report are true and Correct.
• The reported analyses, opinions, and conclusions are limited
Only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
• I have no (or the specified) present or propective interst in
the property that is the subject of this report and no (or
the specified ) personal interst with respect to the parties
involved.

• I have no bias with respect to the property that is the
subject of this report or to the parties involved with this
assignment.

• My engagement in this assignment was not contingent upon developing predetermined results.

• My compensation for completing this assignment is not
contigent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated results, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
• My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the
Uniform Standards of Professional Appraisal Practice.
• I have (or have not) made a personal inspection of the Property that is the subject of this report. (If more than one person signs this certification, the certification must clearly specify which individuals did and which individuals
did not make a personal inspection of the appraised property.)
• no one provided significant real property appraisal assistance to the person signing this certification. (If there are exception, the name of each individual providing Significant real property appraisal assistance must be stated.)


Standards Rule 2-4 (This Standards Rule contains specific requirements from which departure is permitted. Sec DEPARTURE RULE .)

An oral real property appraisal report must, at a minimum, address the substantive matters set forth in Standards Rule 2-3 (b).
STANDARD 7: PERSONAL PROPERTY APPRISAL, DEVELOPMENT

In developing a personal property appraisal, an appraiser must identify the problem to be solved and the scope or work necessary to solve the problem and correctly complete; research and analysis necessary to produce a credible appraisal.

Standards Rule 7-1 (This Standards Rule contains binding requirements from which departure is not permitted.)

In developing a personal property appraisal, an appraiser must:

(a) be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to
produce a credible appraisal;
(b) not commit a substantial error of omission or commission that significantly affects an appraisal; and
(c) not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affect the credibility of those results.

Standards Rule 7-2 (This Standards Rule contains binding requirements from which departure is not permitted.)

In developing a personal property appraisal, an appraiser must:
(a) identify the client and other intended users;
(b) identify the intended use of the appraiser’s and conclusions;
(c) identify the purpose of the assignment (the type and definition of the value to be developed); and, if the value opinion to be developed in market value, ascertain whether the value is to be the most probable price:
i. in terms of cash; or
ii. in terms of financial arrangements equivalent to cash;
or
iii. in other precisely defined terms;and
iv. if the opinion of value is to be based on non –market financing or financing with unusual conditions or incentives, the terms of such financing must be clearly identified and the appraiser’s opinion of their contributions to or negative influence on value must be developed by analysis of relevant market data;
(d) identify the effective date of the appraiser’s opinions and conclusions
(e) identify the characteristics of the property that are relevant to the purpose and intended use of the appraisal, including:
i. sufficient characteristics to establish the identity of the item including the method of identification;
ii. sufficient characteristics to establish the relative quality of the item (and its component parts, where applicable) within its type;
iii. all other physical and economic attributes with a material effect on value;
iv. the ownership interst to be valued;
v. any known restrictions, encumbrances, leases, covenants, cotracts, declaration, special assessments, ordinances, or other items of a similar nature; and
vi. any real property or intangible items that are not personal property but which are included in the appraisal.

(f) Identify the scope of work necessary to complete the assignment;
(g) Identify any extraordinary assumptions necessary in the assignment; and
(h) Identify any hypothetical conditions necessary in the assignment.

Standards Rule 7-3 (This Standards Rule contains specific requirements from which departure is permitted. See DEPARTURE RULE.)

In developing a personal property appraisal, an appraiser must collect, varify, analyze, and reconcile all information pertinent to the appraisal problem, given the scope of work identified in accordance with Standards Rule 7-2(f)

(a) where applicable, identify the effect of highest and best use by measuring and analyzing the current use and alternative uses to encompass what is profitable, legal, and physically possible, as relevant to the purpose and intended use of the appraisal;
(b) personal property has several measurable marketplaces; therefore, the appraiser must define and analyze the appropriate market consistent with the purpose of the appraisal; and
(c) Analyze the relevant economic conditions at the time of the valuation including market acceptability of the property and supply, demand, scarcity, or rarity.
Standards Rule 7-4 (This Standards Rule contains specific requirements from which departure is permitted. See DEPARTURE RULE.)

In developing a personal property appraisal, an appraiser must collect, verify, and analyze all information applicable to the appraisal problem and the type of property, given the scope of work identified in accordance with Standards Rule 7-2(f).

(a) when a sales comparison approach is applicable, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion.

(b) When a cost approach is applicable, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion.

i. analyze such comparable cost data as are available to estimate the cost new of the property; and
ii. analyze each comparable data as are available to estimate the difference between cost new and the present worth of the property (accrued depreciation ).

(c) when an income approach is applicable, an appraiser must:
i. analyze such comparable data as are available to estimate the market income of the property;
ii. analyze such comparable operating expense data as are available to estimate the operating expenses of the property;
iii. analyze such comparable data as are available to estimate rates of capitalization and /or rates of discount; and
iv. base projections of future income and expenses on reasonably clear and appropriate evidence.
(d) when developing an opinion of the value of a lease or leased Property, an appraiser must analyze must analyze the effect on value, if any, of the terms and conditions of the lease(s)

(e) an appraiser must analyze the effect on value, if any, of the assemblage of the various component Parts of a property and refrain from valuing the whole solely by adding together the individual values of the various component parts.

(f) an appraiser must analyze the effect on value, if any, of anticipated modifications to the subject property, to the extent that market actions reflect such anticipated modifications as of the effective appraisal date.

(g) an appraiser must analyze the effect on value of any real property or intangible items that are not personal but are included in the appraisal.

(h) When appraising proposed modifications, an appraiser must examine and have for future examination:

i. plans, specifications, or other documentation sufficient to identify the scope and character of the proposed modifications;
ii. evidence indicating the probable time of completion of the proposed modifications; and
iii. Reasonably clear and appropriate evidence supporting Implementation costs, anticipated earnings, and output, as applicable.

Standards Rule 7-5 (This Standards Rule contains binding requirements from which departure is not permitted.)

In developing a personal property appraisal, when the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business:

(a) analyze all agreements of sale, validated offers or third-party offers to sell, options, or listings of the subject property current as of the effective date of the appraisal; and

(b) analyze all prior sales of the subject property that occurred within a reasonable and applicable and applicable time period, given the purpose of the assignment and the type of property involved.

Standards Rule 7-6 (This Standards Rule contains binding requirements from which departure is not permitted.)

In developing a personal property appraisal, an appraiser must:

(a) reconcile the quality and quantity of data available and analyzed within the approaches used; and
(b) reconcile the applicability or suitability of the approaches used to arrive at the value conclusion(s).

STANDARD 8: PERSONAL PROPERTY APPRAISAL, REPORTING

In developing the results of a personal property appraisal, an appraiser must communicate each analysis, opinion, and conclusion in a manner that is not misleading.

Standards Rule 8-1 (This Standards rule contains binding requirements from which departure is not permitted.)

Each written or oral personal property appraisal report must:

(a) clearly and accurately set forth the appraisal in a manner that will not be misleading;
(b) contain sufficient information to enable the intended users of the appraisal to understand the report property; and
(c) clearly and accurately disclose any extraordinary assumption, hypothetical condition, or limiting condition that directly affects the appraisal and indicate its impact on value.

Standards Rule 8-2 (This Standards Rule contains binding requirements from which departure is not permitted.)

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.

(a) The content of a Self-Contained Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum :

i. state the identify of the client and any intended users, by name
or type;
ii. state the intended use of the appraisal;
iii. describe information sufficient to identify the property involved in the appraisal, including the physical and economic property characteristics relevant to the assignment;
iv. state the property interst appraisal;
v. state the purpose of the appraisal; including the type and definition of value and its source;
vi. state the effective date of the appraisal and the date of the report;
vii.describe sufficient information to disclose to the client and any intended users of the appraisal the scope of work used to develop the appraisal;
viii state all assumptions, hypothetical conditions, and limiting conditions that affected the analyses, opinions, and
Conclusions;
ix. describe the information analyzed, the appraisal procedures followed , and the reasoning that supports the analyses, opinions, and conclusions;
x. 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 the purpose of the assignment is market value, describe the support and rational for the appraiser’s of the highest and best use of the property;
xi. state and explin any permitted departures from specific requirements of STANDARD 7 and the reason for excluding any of the usaul valuation approaches; and
xii. include a signed certification in accordance with Standards Rule 8-3

(b) The content of a summary Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum:

i. state the identity of the client and any intended users, by name or type;
ii. state the intended use of the appraisal;
iii. summarize information sufficient to identify the property involved in the appraisal, including the physical and
economic property characteristics relevant to the assignment;
iv. state the property interest appraisal;
v. state the purpose of the appraisal, including the type and definition of value and its source;
vi. state the effective date of the appraisal and the date of the report;
vii. summarize sufficient information to disclose to the client and any intended users of the appraisal the scope of work used to develop the appraisal;
viii. state all assumptions, hypothetical conditions, and limiting conditions that affected the analyses, opinions, and
conclusions;
ix. summarize the information analyzed, the appraisal procedures followed, and the reasoning that supports the
analyses, opinions, and conclusions;
x. 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 the purpose of the assignment is a market value, summarize the support and rationale for the appraiser’s opinion of the highest and best use of the property;
xi. state and explin any permitted departures from specific requirements of STANDARD 7, and the reason for excluding any of the usual valuation approaches; and
xii. include a signed certification in accordance with Standards Rule 8-3.

(c) The content of a Restricted Use Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum:

i. state the identify of the client, by name or type;
ii. state the intended use of the appraisal;
iii. state information sufficient to identity the property involved
in the appraisal;
iv. state the ownership interest appraisal;
v. state the purpose of the appraisal including the type of value, and refer to the definition of value pertinent to the purpose of the assignment;
vi. state the effective date of the appraisal and the date of the report;
vii. state the extent of the process of collecting, confirming, and reporting data or refer to an assignment agreement retained in the appraiser’s work file, which describes the scope of work to be performed;
viii. state all assumptions, hypothetical conditions, and limiting conditions that affect the analyses, opinions, and conclusions;
ix. state the appraisal procedures followed, sate the value opinion (s) and conclusion(s) reached, and reference the work file;
x. state, as appropriate to the class of personal property involved, the use of the property exciting as of the date of value and the use of the property reflected in the appraisal; and, when the purpose of the assignment is market value, state the appraiser’s opinion of the highest and best use of the property;
xi. state and explain any permitted departures from applicable specific requirements of STANDARD 7; state the exclusion of any of the usual valuation approaches; and state a prominent use restriction that limits use of the report to the client and warns that the appraiser's ’pinions and conclusions set forth in the report cannot be understood properly without additional information in the appraiser’s work file; and
xii. include a signed certification in a accordance in Standards Rule 8-3.

Standards Rule 8-3 (This Standards Rule contains binding requirements from which departure is not permitted.)

Each written personal property appraisal report must contain a signed certification that is similar in content to the following form:

I certify that, to the best of my knowledge and belief:

• the statements of fact contained in this report are
true and correct.

• The reported analyses, opinions, and conclusions
are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

• I have no (or the specified) present or prospective
Interest in the property that is the subject of this report and no (or the specified) personal interst with respect to the parties involved.

• I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

• My enagement in this assignment was not contingent upon developing or reporting predetermined results.


• My compensation for completing this assignment is not contingent upon the developing of a Predetermined value or direction in values that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated results, or the occurrence of a subsequent event directly related to the intended use of this appraisal.


• My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Parctice.

• I have (or have not) made a personal inspection of Property that is the subject of this report. (If more than one person signs this certification, the certification must clearly specify which individuals and which individuals did not make a personal inspection of the appraised property.)

• No one provided significant personal property appraisal assistance to the person signing this certification. (If there are exceptions, the name of each individual providing significant personal property appraisal assistance must be stated.)

Standards Rule 8-4(This Standards Rule contains specific requirements from which departure is permitted. See Departure Rule.)

An oral personal property appraisal report must, at a minimum, address the substantive set forth in Standards Rule 8-2(b).