New Uniform Act Rules Whats Changed in Appraisal

New Uniform Act Rules: What’s Changed in Appraisal Practice? AASHTO/FHWA 2005 Right-of-Way and Utilities Subcommittee Conference Austin, Texas May 18, 2005 AASHTO 2005 Slide #1

May 18, 2005 Key Topics n n n AASHTO 2005 Slide #2 Appraisal waiver and waiver valuation Appraisal and appraisal review Uniform Act appraisal requirements vs. USPAP standards Qualifications Responsibilities

May 18, 2005 Appraisal Waiver n Maximum increased to $10, 000 ¨ Increased from $2, 500 ¨ Option available for up to $25, 000 n Federal funding agency must approve n Owner must be offered option for appraisal n AASHTO 2005 Slide #3 Prepare a waiver valuation instead

May 18, 2005 § 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. AASHTO 2005 Slide #4

May 18, 2005 Waiver Valuation Prepared by knowledgeable person n Not an appraisal n Review not required n Owner accompaniment not required n Agency responsible for n ¨ Basis for preparing ¨ Establishing just compensation amount AASHTO 2005 Slide #5

May 18, 2005 Criteria for Appraisals n n AASHTO 2005 Slide #6 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

May 18, 2005 Working to Clarify and Maintain Consistency Uniform Act (UA) appraisal requirements n USPAP standards n AASHTO 2005 Slide #7

May 18, 2005 USPAP Consistency n 2006 USPAP (2 nd 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” AASHTO 2005 Slide #8

May 18, 2005 Agency Responsibility n 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) n Five requirements in § 24. 103(a)(2) n AASHTO 2005 Slide #9

May 18, 2005 Appraisal Assignment References: § 24. 103(a) and Appendix A n Agency is to participate in n ¨ Defining the appraisal problem ¨ Developing the scope of work n AASHTO 2005 Slide #10 Identify personal property

May 18, 2005 Scope of Work n n n AASHTO 2005 Slide #11 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

May 18, 2005 Appraiser and Review Appraiser Qualifications n n References: § 24. 103(d)(1), § 24. 104 and Appendix A Considerations/Factors ¨ Competency ¨ Experience ¨ Education ¨ Training ¨ Certification/licensing ¨ Professional designations AASHTO 2005 Slide #12

May 18, 2005 Qualifications - Agency Responsibilities Set criteria for minimum qualifications n Assure qualifications match the scope of work n Contract (fee) appraisers must be state licensed/certified n AASHTO 2005 Slide #13

May 18, 2005 Appraisal Review References: § 24. 104(a) to (c) and Appendix A n Review appraiser responsibilities n ¨ Examine analysis and presentation of data ¨ Ensure satisfies all appraisal requirements ¨ Determine that meets definition of appraisal in § 24. 2 (a)(3) AASHTO 2005 Slide #14

May 18, 2005 Review Appraiser Options n Recommend appraisal as basis for establishing the amount believed to be just compensation n Accept appraisal as complying with all requirements n Not accept appraisal, including reasoning AASHTO 2005 Slide #15

May 18, 2005 Staff Review Appraiser Options n Approve the appraisal as basis for establishing the amount believed to be just compensation n If authorized, determine just compensation amount AASHTO 2005 Slide #16

May 18, 2005 Conflict of Interest References: § 24. 102(n) and Appendix A n Appraisers, review appraisers, waiver valuation preparers n ¨ 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 AASHTO 2005 Slide #17

May 18, 2005 Supervision and Influence or Coercion n Person functioning as negotiator cannot supervise or formally evaluate ¨ Appraisers ¨ Review appraisers ¨ Persons performing waiver valuations AASHTO 2005 Slide #18

May 18, 2005 Supervision and Negotiating n “Functioning as negotiator” ¨ Makes initial just compensation offer ¨ Initiates price negotiations AASHTO 2005 Slide #19

May 18, 2005 Uniform Act Final Rule Implementation Resources n Video http: //www. fhwa. dot. gov/realesta te/ua/urahudbc 022405. htm n Information Guide http: //www. fhwa. dot. gov/realesta te/ua/uraguide 3805. pdf AASHTO 2005 Slide #20