ASB Issues New Q&A's
The Uniform Standards of Professional Appraisal Practice (USPAP) Q&A’s are issued by the Appraisal Standards Board (ASB) to provide guidance on USPAP questions raised by state regulators and the public. They illustrate the applicability of USPAP in specific situations and provide advice from the ASB for the resolution of appraisal issues and problems. USPAP Q&As do not establish new standards or interpret existing standards and do not constitute a legal opinion of the ASB.
Of the recently issued Q&A's, two apply specifically to personal property appraising:
QA 2020-06 addresses the required content of an Appraisal Report versus a Restricted Appraisal report, and supplies a handy chart for comparing the two reporting options. When using the chart, please remember that USPAP defines “state” and “summarize” exactly the opposite of their commonly understood definitions. Please see the blog post USPAP Updates for 2022 – 2023 for more information.
QA 2020-03 responds to the question, "do personal property appraisers need to perform personal inspections during a national health or other emergency?" The ASB’s response:
"Appraisers and users of appraisal services should remember that USPAP does not require an inspection unless necessary to produce credible assignment results. (Please refer to USPAP Standards Rules 7-2 and 8-2 and Advisory Opinion 2 for further guidance.)
When a personal inspection would customarily be part of the scope of work, a health or other emergency condition may require an appraiser to make an extraordinary assumption about the identification, relative quality, etc. of the subject property. This is permitted by USPAP as long as the appraiser has a reasonable basis for the extraordinary assumption, as long as its use still results in a credible analysis, and as long as the appraiser complies with the reporting requirements in Standards Rule 8-2(a)(xiii) or (b)(xv).
Thus, if appraisers rely on photographs, purchase receipts, inventories, maintenance logs, etc. to identify the subject property, they must reasonably believe the sources are reliable. Appraisers must also reasonably believe the sources are adequate for identifying the other characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal, as specified in Standards Rule 7-2(e)(i-vi).
Personal property appraisers are cautioned to use great care in the use of an extraordinary assumption in lieu of a personal inspection. It may not be possible to identify relevant characteristics of some assets or to perform certain assignments without actually performing a personal inspection of the subject property. Some examples include, but are not limited to, when the scope of work makes it necessary for the appraiser to: determine whether the subject is a painting or a giclée print on canvas; obtain technical information about a diamond; ascertain a property’s current condition; or confirm its very existence. In these cases, the appraiser cannot provide a credible appraisal without conducting a personal inspection."
So, while USPAP does not technically require an inspection, the operative phrase here is “unless necessary to produce credible assignment results.” Can any responsible jewelry appraiser claim to be able to identify a gemstone using only a photograph or a video feed? As the last paragraph states, an example of when it might not be possible to perform an assignment without a personal inspection is to obtain technical information about a diamond. Determining whether or not the stone is even a diamond at all is nearly impossible, never mind credibly determining any technical characteristics!
As has been discussed on the chatline and in other forums, it is possible to perform an update on an item which the appraiser has already inspected and appraised at an earlier date, but even then serious precautions must be taken and a long list of assumptions and conditions added to the report.
You can see all of the USPAP Q&A’s at the Appraisal Foundation’s website.