When Assistance is Provided by Others USPAP Obligations of the Primary and Assisting Appraisers by David J. Maloney, Jr., AOA CM

Introduction ASB response to query generated questions regarding USPAP obligations when assistance provided by others What if the individual providing assistance is not an “appraiser?” If an appraiser, what if the assistance provided was not “appraisal” assistance? What if the assistance provided was not deemed “significant”? © 2010 David J. Maloney, Jr., AOA CM

Five Scenarios Obligations partially clarified in USPAP’s Advisory Opinion 31 Assignments Involving More than One Appraiser Personal property appraisers obtain appraisal and non-appraisal assistance from: Other appraisers, and Non-appraisers © 2010 David J. Maloney, Jr., AOA CM

Five Scenarios Two appraisers working together on an assignment as equals A specialist appraiser contributing significantly to an assignment from within his or her specialty areas An appraiser who contributes in a non-significant manner A staff appraiser whose assistance is relied upon by the primary appraiser A non-appraiser consultant/expert who contributes to an assignment © 2010 David J. Maloney, Jr., AOA CM

Relevant USPAP references: USPAP DEFINITIONS SCOPE OF WORK RULE Record Keeping section of the ETHICS RULE Standards Rule 8-2 Standards Rule 8-3 Advisory Opinion (AO) 31 Assignments Involving More than One Appraiser FAQ #219 Significant Appraisal Assistance FAQ #224 Multi-Discipline Certification FAQ #225 Relying on the Reports of Others © 2010 David J. Maloney, Jr., AOA CM

Three issues of importance Assistance provided by Appraisers Non-appraisers Was the assistance provided by an appraiser or by a non-appraiser? If provided by an appraiser, was it appraisal assistance? If provided by an appraiser, was the assistance significant? © 2010 David J. Maloney, Jr., AOA CM — www.DavidMaloney.com

Was the assistance provided by an appraiser or by a non-appraiser? Properly trained as an appraiser? One who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective. Trained in: appraisal theory, principles and methodology, and in generally accepted appraisal standards, such as USPAP. Without such training, one is considered a “non-appraiser,” e.g., estate liquidators, auctioneers, experts, and dealers © 2010 David J. Maloney, Jr., AOA CM — www.DavidMaloney.com

If provided by an appraiser, was it appraisal assistance? Of or pertaining to appraising and related functions such as appraisal practice or appraisal services. Related to the appraisal process or requires appraiser competency. © 2010 David J. Maloney, Jr., AOA CM — www.DavidMaloney.com

If provided by an appraiser, was the assistance significant? Assistance takes many forms; can be classified as significant or minor Primary appraiser must determine if assistance was significant Consider assistance significant: If it contributed in a noteworthy way to primary appraiser’s value conclusion If assistance caused primary appraiser to significantly change his or her own opinions © 2010 David J. Maloney, Jr., AOA CM — www.DavidMaloney.com

Primary Appraiser’s USPAP Obligations when Another Appraiser Provides Assistance Provided significant appraisal assistance Identify assisting appraiser in the USPAP certification (not required if the assisting appraiser also signs the certification), and State elsewhere in the report the extent of the significant personal property appraisal assistance that was provided Degree of identification depends on which reporting option was used by the primary appraiser E.g., Summary Appraisal Report option requires appraisal assistance be “summarized” © 2010 David J. Maloney, Jr., AOA CM — www.DavidMaloney.com

Primary Appraiser’s USPAP Obligations when Another Appraiser Provides Assistance Provided non-significant appraisal assistance Do not name the appraiser in the certification statement May choose to mention the assistance provided in the scope of work statement if doing so would Contribute to a more meaningful understanding of the scope of work performed Is considered prudent in order to document the extent of primary appraiser’s diligence © 2010 David J. Maloney, Jr., AOA CM — www.DavidMaloney.com

Assisting Appraiser’s USPAP Obligations when Providing Assistance Obligations depend on type of appraisal service provided Rises to level of appraisal or appraisal review General obligations of USPAP which include: DEFINITIONS PREAMBLE ETHICS RULE (Conduct, Management and Confidentiality sections only), COMPETENCY RULE, JURISDICTIONAL EXCEPTION RULE Relevant STANDARDS (STANDARD 3 for appraisal reviews; STANDARDS 7 and 8 for appraisals) SCOPE OF WORK RULE, and Record Keeping section of the ETHICS RULE (workfile maintenance, accessibility and retention) © 2010 David J. Maloney, Jr., AOA CM — www.DavidMaloney.com