Earlier this month, the Appraisal Standards Board (ASB) released new questions and answers covering the term “personal inspection.”
The ASB, as well as The Appraisal Foundation, provide these FAQs as guidance for appraisers.
Q. Am I required to use the term “personal inspection” in my appraisal report?
A. No. USPAP does not require use of the specific term “personal inspection.” The term “personal inspection” is only used in USPAP in the certification requirements. For example, Standards Rule 2-3(a) states: “I have/have not made a personal inspection of the property that is the subject of this report.”
The wording of a certification for each appraisal report does not have to match the exact wording of the applicable reporting standard (i.e., Standards Rules 2-3, 4-3, 6-3, 8-3 or 10-3) verbatim. The reporting standards only require that, at a minimum, each element addressed in the report’s signed certification must be the same elements noted in the applicable reporting standard (i.e., Standards Rule 2-4, 4-3, 6-3, 8-3 or 10-3).
Regarding a “personal inspection” (or the lack thereof), the appraiser can use different words to address this certification element; however, at a minimum, the USPAP meaning of the term “personal inspection” must be addressed.
Q. For the new assignment, can I use the information I have already collected about the subject property?
A. As with any assignment, you might be able to use information and analyses developed for a previous assignment. Appraisers are often selected for subsequent assignments specifically because of experience and demonstrated competency in a prior assignment. However, one must be mindful of obligations relating to the use of confidential information.
Q. For the new assignment, can I certify I made a personal inspection?
A. No. If the appraiser has certified they made a personal inspection, under USPAP they are indicating they completed: “... an in-person observation of the subject property as part of the scope of work for the assignment,” which would not be true in this instance.
Q. My assignment from the new client requires my report to include a certification indicating I had “inspected the property as of the effective date of value,” and I am not allowed to modify or change the certification in any way. Since I did inspect the property as of the effective date of value, would this meet the requirement for addressing the USPAP certification element about “personal inspection”?
A. No. Given the assignment required the use of a certification that could not be altered, and the certification did not clearly and accurately address the USPAP certification elements about “personal inspection,” it would be necessary to use a supplemental certification.
Q. The certification in my appraisal report satisfies the requirement to disclose if I have (or have not) made a personal inspection. Specifically, my certification states: I inspected the interior and exterior of the subject property as part of the scope of work performed for this assignment. Am I required to make an additional disclosure in my appraisal report related to my personal inspection?
A. There is no requirement for every appraisal report to include an additional disclosure; however, for some appraisal assignments, it may be necessary for you to include more details about your personal inspection in the report. For example, the comment to Standards Rule 2-2(a)(viii) states: Summarizing the scope of work includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed. Therefore, when necessary, the appraisal report must include a more detailed disclosure about the personal inspection. This is to ensure that any intended user of the appraisal report is not misled about the scope of work performed (or not performed) as it relates to the inspection, and that the report complies with the applicable content requirements. The more detailed disclosure can be in any part of the appraisal report, including in the certification.