Commercial Grade is a weekly post by John Cicero, MAI who provides commentary on issues affecting real estate appraisers, with specific focus on commercial valuation. Today John talks the newly created art of sifting through client memos regarding the new USPAP.
Disclosure: John is a partner of mine in our commercial real estate valuation concern Miller Cicero, LLC and he is, on
Thursdays Fridays, one of the smartest guys I know. …Jonathan Miller
The new and supposedly improved USPAP went into effect on July 1, and there has been a flurry of memos sent out by major lending institutions to “clarify” their positions. Two such institutions, amongst the largest in the country, have adopted the following guidelines:
Since USPAP now says that the terms “limited” and “complete” are obsolete, their internal guidelines calll for “comprehensive”, “condensed” and “concise,” each with its own requirements.
The three C’s. Simple! Another major institution reports that they will continue to use “complete” and “limited” in order to provide minimum standards and guidance for scope of work determination. In this case the “complete” and “limited” labels, although eliminated from USPAP, have been adopted by internal Bank policy. Its clear that other institutions will follow suit and adopt their own creative policies to communicate what they expect.
So in this new order, the fee appraiser need only to sift through a 12 page memo issued by a Bank in order to understand their defintion of different levels of Scope of Work.
[Can we make it anymore difficult for appraisers? -ed]