Uniform Standards of Professional Appraisal Practice (USPAP) is considered the ethical (or quality control) standards used for personal property, real property, intangible assets, and business valuation. USPAP was developed in the 1980’s by a joint committee representing the major U.S. and Canadian appraisal organizations, stemming from the savings and loan crisis. USPAP represents the generally accepted and recognized standards of appraisal practice. Its purpose is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers.
The five basic rules of USPAP are: Ethics Rule, Record Keeping Rule, Competency Rule, Scope of Work Rule, and Jurisdictional Exception Rule. The Ethics Rule is established to promote and preserve public trust. The Competency Rule applies to the appraiser prior to accepting the assignment. The appraiser must determine if they are competent to perform the assignment and if not, they must either gain the necessary competency to perform the assignment or decline the assignment. Scope of Work Rule requires the appraiser to identify the problem to be solved, determine and perform the scope of work necessary to develop credible assignment results and disclose the scope of work in the report. The purpose of the Record Keeping Rule is to establish that an appraiser must prepare a work file prior to sending it out. The Jurisdictional Exception Rule is an assignment condition established by applicable law or regulation which supersedes USPAP. In other words, if the law is in conflict with USPAP, the law wins.
When looking for an appraiser it is a good idea to check to see if they are associated with an appraisal organization. Different organizations may have different requirements so make sure that staying current with USPAP is one of those requirements. The American Society of Appraisers (ASA) is one organization that has such requirements. They are recognized worldwide and have some of the most stringent requirements for professional development and accreditation. For more information visit www.appraisers.org