New Uniform Act Rules: What

1
New Uniform Act Rules Whats Changed in
Appraisal Practice?

• AASHTO/FHWA 2005 Right-of-Way and Utilities
  Subcommittee Conference
• Austin, Texas
• May 18, 2005

2
Key Topics

• Appraisal waiver and waiver valuation
• Appraisal and appraisal review
• Uniform Act appraisal requirements vs. USPAP
  standards
• Qualifications
• Responsibilities

3
Appraisal Waiver

• Maximum increased to 10,000
• Increased from 2,500
• Option available for up to 25,000
• Federal funding agency must approve
• Owner must be offered option for appraisal
• Prepare a waiver valuation instead

4
24.2(a)(33) Waiver Valuation - New Definition

• waiver valuation means the valuation process
  used and the product produced when the Agency
  determines that an appraisal is not required,
  pursuant to 24.102(c)(2) appraisal waiver
  provisions.

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Waiver Valuation

• Prepared by knowledgeable person
• Not an appraisal
• Review not required
• Owner accompaniment not required
• Agency responsible for
• Basis for preparing
• Establishing just compensation amount

6
Criteria for Appraisals

• Reference 24.103 and Appendix A
• Rule defines appraisal requirements for federal
  and federally assisted real property acquisition
• USPAP and UASFLA are non-regulatory
• Rule is consistent with USPAP

7
Working to Clarify and Maintain Consistency

• Uniform Act (UA) appraisal requirements
• USPAP standards

8
USPAP Consistency

• 2006 USPAP (2nd Exposure Draft, April 25, 2005)
• Focus on Scope of Work
• Departure is gone
• Will do away with classifying Standards Rules as
  either binding or specific requirements,
  substituting clearer when necessary language
  for specific requirements

9
Agency Responsibility

• Acquiring Agency must assure that appraisals
• Are relevant to its program needs
• Reflect established and commonly accepted Federal
  and federally-assisted program appraisal practice
• As a minimum, comply with both
• Definition of appraisal in 24.2(a)(3)
• Five requirements in 24.103(a)(2)

10
Appraisal Assignment

• References 24.103(a) and Appendix A
• Agency is to participate in
• Defining the appraisal problem
• Developing the scope of work
• Identify personal property

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Scope of Work

• Written statement
• Developed together by appraiser and Acquiring
  Agency
• Matches the UA and UA rule requirements to the
  appraisal problem
• References 24.103(a)(2) and 24.103(b)
• Prepared before appraisal work starts
• May be updated as needed

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Appraiser and Review Appraiser Qualifications

• References 24.103(d)(1), 24.104 and Appendix
  A
• Considerations/Factors
• Competency
• Experience
• Education
• Training
• Certification/licensing
• Professional designations

13
Qualifications - Agency Responsibilities

• Set criteria for minimum qualifications
• Assure qualifications match the scope of work
• Contract (fee) appraisers must be state
  licensed/certified

14
Appraisal Review

• References 24.104(a) to (c) and Appendix A
• Review appraiser responsibilities
• Examine analysis and presentation of data
• Ensure satisfies all appraisal requirements
• Determine that meets definition of appraisal in
  24.2 (a)(3)

15
Review Appraiser Options

• Recommend appraisal as basis for establishing the
  amount believed to be just compensation
• Accept appraisal as complying with all
  requirements
• Not accept appraisal, including reasoning

16
Staff Review Appraiser Options

• Approve the appraisal as basis for establishing
  the amount believed to be just compensation
• If authorized, determine just compensation amount

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Conflict of Interest

• References 24.102(n) and Appendix A
• Appraisers, review appraisers, waiver valuation
  preparers
• Shall not have any interest in the property
• Shall not be subjected to influence or coercion
  regarding valuation
• May be authorized to act as a negotiator where
  the acquisition is less than 10,000

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Supervision and Influence or Coercion

• Person functioning as negotiator cannot supervise
  or formally evaluate
• Appraisers
• Review appraisers
• Persons performing waiver valuations

19
Supervision and Negotiating

• Functioning as negotiator
• Makes initial just compensation offer
• Initiates price negotiations

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Uniform Act Final Rule Implementation Resources

• Video http//www.fhwa.dot.gov/realestate/ua/urahud
  bc022405.htm
• Information Guide http//www.fhwa.dot.gov/realesta
  te/ua/uraguide3805.pdf