Standards of Professional Practice

Real estate is one of the basic sources of wealth in the global economy. Therefore, those who own, manage, sell, purchase, invest in, or lend money on the security of real estate must have ready access to the services of individuals who provide unbiased opinions of value, as well as sound information, analyses, and advice on a wide range of issues related to property economics.

For these reasons, the services of valuation professionals are vital to the well-being of our society and the global economy, and foster economic growth, stability, and public confidence.

Because of this vital role and a commitment to professionalism, the Appraisal Institute has adopted a Code of Professional Ethics and Standards of Professional Practice to establish requirements for ethical and competent practice. These requirements also serve to promote and maintain a high level of public trust and confidence in Appraisal Institute Designated Members, Candidates, Practicing Affiliates, and Affiliates.

The Standards of Professional Practice are composed of:

• The Standards of Valuation Practice (SVP), promulgated by the Appraisal Institute, and the Certification Standard of the Appraisal Institute; or
• Applicable national or international Standards, and the Certification Standard of the Appraisal Institute

The Appraisal Institute has also issued Guide Notes that provide guidance on how the Standards of Professional Practice may apply to specific issues.

If a Designated Member, Candidate, Practicing Affiliate or Affiliate fails to comply with the Standards of Professional Practice, he or she will be subject to remedial action under Regulation No. 6 of the Appraisal Institute.

The commitment of Appraisal Institute Designated Members, Candidates, Practicing Affiliates, and Affiliates to professionalism extends to helping ensure that others understand and comply with the Code of Professional Ethics and Standards of Professional Practice.

Therefore, each Designated Member, Candidate, Practicing Affiliate, and Affiliate of the Appraisal Institute has a responsibility to refer any significant factual information that reasonably suggests that another Designated Member, Candidate, Practicing Affiliate, or Affiliate may have acted unethically in violation of the Ethical Rules or failed to comply with the Standards of Professional Practice to the Professional Practice Department.

Each Designated Member, Candidate, Practicing Affiliate, or Affiliate also has a responsibility to volunteer to serve on peer review committees for the Appraisal Institute upon request, if eligible.

Effective 2018

The AI SVP is a set of high quality, straightforward, principle-based standards that can be used where other valuation standards are not already required or do not apply.

It can help valuers meet the evolving needs of their clients.

The SVP includes three standards:

• Standard A establishes requirements for the development of an appraisal.
• Standard B establishes requirements for the development of a review.
• Standard C establishes requirements for the reporting of an appraisal or review.

USPAP is a set of national Standards that is applicable for most U.S. appraisals. USPAP is developed by the Appraisal Standards Board (ASB) of The Appraisal Foundation.

• Standards 1 and 2 establish requirements for the development and reporting of a real property appraisal.
• Standards 3 and 4 establish requirements for the development and reporting of an appraisal review.
• Standards 5 and 6 establish requirements for the development and reporting of mass appraisals.
• Standards 7 and 8 establish requirements for the development and reporting of personal property appraisals.
• Standards 9 and 10 establish requirements for the development and reporting of business or intangible asset appraisals.

USPAP also includes:

• DEFINITIONS which establish the application of certain terminology in USPAP.
• ETHICS RULE which sets forth the requirements for integrity, impartiality, objectivity, independent judgment, and ethical conduct.
• RECORD KEEPING RULE which establishes the workfile requirements for appraisal and appraisal review assignments.
• COMPETENCY RULE which presents pre-assignment and assignment conditions for knowledge and experience.
• SCOPE OF WORK RULE which presents obligations related to problem identification, research, and analyses.
• JURISDICTIONAL EXCEPTION RULE which preserves the balance of USPAP if a portion is contrary to law or public policy of a jurisdiction.

The ASB issues Advisory Opinions which are a form of guidance to illustrate the applicability of USPAP in specific situations and to offer advice from the ASB for the resolution of appraisal issues and problems. Advisory Opinions are not part of USPAP.

Current and past editions of USPAP can be purchased on the Appraisal Foundation website.

A free online-only version of USPAP Standards 1-4 can be found at USPAP.org.

The Certification Standard sets requirements for certification statements that AI professionals must make in written reports.

View the Certification Standard of the Appraisal Institute.

The IVS are an example of international standards that may apply to certain assignments.

The IVS are developed by the International Valuation Standards Council (IVSC) and have been adopted or recognized by many valuation institutes, user groups, and financial regulators around the world. The IVS can be purchased on the IVSC website.

AI Professionals can get a free copy at ivsonline.org by entering a promotion code when signing up.

The current Appraisal Institute Body of Knowledge shall be composed of:

• Currently available textbooks, monographs and Guide Notes published by the Appraisal Institute, excluding compilations of published articles, and
• Current nationally developed Appraisal Institute course and seminar offerings.

The current Appraisal Institute Body of Knowledge is an authoritative source of recognized methods and techniques for valuation practitioners.