Table of Contents
A. Data Documentation and Appraisal Reporting Standards
Introduction
Part I. Introduction:
Introduction. Appraisal preparation, documentation and reporting shall be in conformity with these Standards, which are compatible with standards and practices of both the appraisal industry and the current edition of the Uniform Standards of Professional Appraisal Practice (USPAP). It has been necessary, however, to invoke USPAP's Jurisdictional Exception Rule in certain instances, so as to conform these Standards with overriding federal law relating to the valuation of real estate for government acquisition purposes. Appraisals prepared in accordance with these Standards will be considered for the purpose of these Standards to constitute a complete appraisal, as defined by USPAP. 7
It should be recognized that the government's needs for private property for public purposes are quite varied and have a tendency to create unique valuation problems. These Standards do not cover all of the valuation problems that might be encountered in the appraisal of property for government acquisition, and so should not be considered as rigid rules which must be applied in every instance.
The appraiser may sometimes encounter unique appraisal problems that require modification of the appraisal process and the appraisal report to ensure that the specific appraisal problem is adequately addressed and that the appraiser's final conclusion of value is accurate, and has been developed in accordance with controlling federal law. With written agency concurrence, appraisers should feel free to deviate from the Standards in those unique cases that require deviation to properly solve appraisal problems so long as such deviation is in accord with federal law and can be adequately justified. Such justification must be included in the appraisal report.
The Standards set out below have been developed in recognition that government acquisition of private land can create difficult and complex valuation problems, the solutions to which must be developed with the utmost care. Therefore, these standards are especially appropriate when proposed acquisitions are complex, high value, sensitive, or controversial, or when they must be referred to the Department of Justice for litigation.
However, economic considerations and unique program requirements may require modification to these Standards. It is recognized that not all government acquisitions result in complex valuation problems, thus not all appraisal reports will require the degree of information, support and documentation cited herein. 8
Therefore, agencies and valuation managers should modify these Standards as necessary or required to meet their specific agency or program requirements. In making such modifications, the comparative cost of the appraisal services and the anticipated cost of the property to be acquired, as well as the anticipated complexity of the valuation problem, should be considered.
Appraisers should recognize that if these Standards are modified by an agency or program manager for the reasons noted above, the appraiser's assignment may result in a limited appraisal as defined by USPAP 9 and the appraiser should identify the appraisal as such. Under no circumstances, however, may appraisal standards be set at a level below the minimum required under 49 C.F.R. §24.103.
These appraisal Standards are intended to establish a required standard for appraisal report content and documentation, subject to the above exceptions. For easy reference by appraisers and reviewers, a checklist of report content and documentation required under these Standards has been included in the addenda of the Standards marked as "Appendix A. 10 In addition, supplemental content and documentation standards for appraisal reports to be used by appraisers who will testify as expert witnesses in federal court are required by Federal Rule of Civil Procedure 26( a)( 2)( B). These supplemental standards are explained in Section D-2 of these Standards.
These appraisal Standards are not, however, intended to establish an absolute requirement for appraisal report formatting. The report formatting described in these standards, which consists of a four-part appraisal report for total acquisition appraisals and a seven-part appraisal report for partial acquisition appraisals, should be considered only as a recommended guideline for report format. Appraisers are nonetheless cautioned to closely examine their appraisal contract or assignment letter for report formatting requirements, as some agencies may mandate report formatting in accordance with the recommendations herein. For ease of reference by appraisers, the recommended formatting for appraisal reports is shown in the addenda of these Standards, marked as Appendix B. 11
USPAP provides for three types of appraisal reports: self-contained, summary, and restricted use. Appraisers are required by USPAP to specifically identify the type of appraisal report prepared. 12 For a number of reasons, the restricted use report, as defined by USPAP, is unacceptable for government land acquisition purposes. 13 Much confusion exists in the appraisal industry regarding what constitutes a self-contained report as opposed to a summary report, and the terminology used by appraisers varies on a regional basis. However, for the purpose of these Standards any appraisal report, whether identified by the appraiser as a self-contained report or a summary report, will be considered as meeting the USPAP requirements for a self-contained report if it has been prepared in accordance with these Standards.
7. "Complete Appraisal: the act or process of developing an opinion of value or an opinion of value developed without invoking the DEPARTURE RULE." USPAP, Definitions. USPAP's Departure Rule relates to the acceptance of an appraisal assignment in which the appraiser's scope of work is less than, or different from, the work that would be required by USPAP's specific requirements.
8. For instance, the Uniform Relocation and Real Property Acquisition Act of 1970 implementing regulations provide for less than detailed appraisals "for those acquisitions which, by virtue of their low value or simplicity, do not require the in-depth analysis and presentation necessary in a detailed appraisal" 49 C. F. R. §24.103( a). For a discussion of these appraisal requirements, see The Appraisal Guide (Washington D. C.: U. S. Department of Transportation, Federal Highway Administration, Pub. No. FHWA-RE-90-006, 1990).
9. "Limited Appraisal: the act or process of developing an opinion of value or an opinion of value
developed under and resulting from invoking the DEPARTURE RULE." USPAP, Definitions. USPAP's Departure Rule relates to the acceptance of an appraisal assignment in which the appraiser's scope of work is less than, or different from, the work that would be required by USPAP's specific requirements.
10. This "checklist" is not an integral part of these Standards, nor is it intended to be used as part of a formal appraisal review, but has been included merely for easy reference by appraisers and reviewers.
11. This Table is not an integral part of these Standards, but has been included merely for easy reference by appraisers and reviewers.
12. USPAP, Standards Rule 2-2.
13. E. g., a restricted use report cannot reliably be reviewed, as is required for government land acquisition appraisals, due to the limited information provided (USPAP Standards Rule 2-2( c)( ix)); the intended user of the report is restricted to the client only (USPAP Advisory Opinion 12), a condition that cannot be met for government land acquisition appraisals because it should be anticipated that others, such as a land owner, legislators, or the court, will be asked to use and rely on the appraisal report.
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