4.3 Standard 4: Appraisal Review Reporting & Certification

4.3 Standard 4: Appraisal Review Reporting & Certification

While Standard 3 addresses the rules for developing an appraisal review, Standard 4 sets forth the requirements for communicating the results of that review. An appraisal review report must present the reviewer's opinions and conclusions in a clear, accurate, and non-misleading manner, ensuring that intended users understand the scope of work performed and the rationale behind the reviewer's findings.

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Appraisal Review Report Options (Standards Rule 4-1 & 4-2)

Under Standard 4, a written appraisal review report must be prepared using one of two report options:

1. Appraisal Review Report: Provides a detailed explanation of the reviewer's analysis, scope of work, opinions, and conclusions. This format is required whenever there are intended users in addition to the client, or when comprehensive documentation is required by assignment conditions.
2. Restricted Appraisal Review Report: Features abbreviated coverage of the reviewer's scope of work and analytical processes. Strict Rule: A Restricted Appraisal Review Report may be issued ONLY when the client is the sole intended user. It must contain a prominent warning stating that the report cannot be understood properly without access to additional information in the reviewer's workfile.

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Minimum Required Content in an Appraisal Review Report (Standards Rule 4-2)

To ensure clarity and completeness, Standards Rule 4-2 dictates that every written appraisal review report must contain specific mandatory disclosures:

1. Client and Intended Users: Identify the client by name and any intended users by name or type.
2. Intended Use: State the intended use of the appraisal review report.
3. Work Under Review Description: Clearly identify the appraisal report or workfile under review, including the author(s), date of report, property identified, and effective date of the original appraisal.
4. Statement of Ownership: State the real estate, personal property, or business ownership interest identified in the work under review.
5. Dates: State the effective date of the appraisal review opinion and the date of the review report.
6. Scope of Work: Describe the scope of work performed in developing the review, including whether a desk or field review was conducted and the extent of data verification.
7. Reviewer's Opinions and Conclusions: State the reviewer's opinions regarding completeness, accuracy, relevance, and reasonableness of the work under review, supported by clear reasoning.
8. Extraordinary Assumptions & Hypothetical Conditions: Clearly state all extraordinary assumptions and hypothetical conditions used in the review, accompanied by a disclosure that their use might have affected the assignment results.
9. Independent Value Disclosures: If the reviewer expressed an independent value opinion, state that value conclusion along with the effective date and supporting market rationale.

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Standards Rule 4-3: Signed Certification Requirements

Every written appraisal review report must contain a signed certification under Standards Rule 4-3. The certification is a legally binding declaration of the reviewer's professional independence, objectivity, and compliance with USPAP.

Essential Certification Elements

By signing the certification, the reviewer attests to the following statements:

• The statements of fact contained in the review report are true and correct.
• The reported analyses, opinions, and conclusions were developed in conformity with USPAP.
• The reviewer has no present or prospective personal interest in the property or parties involved (or presents a clear disclosure of any existing interest).
• The reviewer has performed no services regarding the subject property within the prior 3-year period (or explicitly discloses any prior services).
• The reviewer's compensation is not contingent upon reporting a predetermined outcome, finding fault with the report, or supporting a specific value conclusion.
• No one provided significant appraisal review assistance to the signing reviewer, except as explicitly named in the certification.

CERTIFICATION CHECKLIST (Standards Rule 4-3)
[✓] Facts are true and correct
[✓] Conformity with USPAP Standard 3 & 4
[✓] Disclosure of any prior 3-year services regarding property
[✓] Absolute objectivity & non-bias (no contingent fees)
[✓] Identification of significant review assistance providers

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Workfile Retention Requirements for Review Assignments

Under the USPAP Record Keeping Rule, an appraiser must prepare a workfile for each appraisal review assignment. The review workfile serves as the evidentiary foundation for the reviewer's findings and certification.

Minimum Retention Period

The review workfile must be retained for:

• At least 5 years after preparation of the review report, OR
• At least 2 years after final disposition of any judicial proceeding in which the reviewer gave testimony regarding the assignment,

whichever period expires later.

Mandatory Workfile Contents

The review workfile must contain:

• The name of the client and identity of any other intended users.
• True copies of any written appraisal review reports emitted.
• A copy of the work under review (the original appraisal report or relevant workfile materials).
• Summaries of any oral reports or testimony given by the reviewer.
• All data, documentation, and research notes necessary to support the reviewer's opinions regarding completeness, accuracy, relevance, reasonableness, and any independent value opinion developed.