Source
of State and Federal Laws
Appraisal
Practice
Scope
of Practice
Professional
Standards
Source
of State and Federal Laws
Q.
What is the primary source of Wisconsin laws that govern the regulation
of licensed and certified appraisers?
A.
Chapter 458, Wisconsin Statutes and Chapters RL 80-87 Wisconsin Administrative
Code.
Q.
What is the primary source of federal laws that govern the regulation
of certified appraisers?
A.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), 12 U.S.C. 3331 et seq.
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Appraisal
Practice
Q.
Do I need a license or certification in order to perform appraisals
in Wisconsin?
A.
The answer is no for "non-federally related transactions"
and yes for "federally related transactions".
Non-federally
related transactions: A credential is not required to perform appraisals
involving "non-federally related transactions". Refer to s.
458.02, Stats., which provides that an individual is not prohibited
from practicing as an appraiser without a credential; provided that
the individual does not use titles as prohibited under s. 458.055, Stats.
Federally
related transactions : A credential is required to perform appraisals
involving "federally related transactions". Refer to 12 U.S.C.
3342, which provides that a State certified appraiser shall be required
for all federally related transactions having a value of one million
dollars or more and that 1-to-4 unit, single family residential appraisals
may be performed by State licensed appraisers unless the size and complexity
requires a State certified appraiser.
Q.
How is the term "federally related transaction" defined?
A.
The term "federally related transaction" is defined to mean
any real estate-related financial transaction which: 1) a federal financial
institutions regulatory agency or the Resolution Trust Corporation engages
in, contracts for, or regulates; and 2) requires the services of an
appraiser. Refer to 12 U.S.C. 3350.
Q.
May an individual who is not a licensed or certified appraiser assist
in the preparation of an appraisal?
A.
Yes. An individual who is not a State certified or licensed appraiser
may assist in the preparation of an appraisal if: 1) the assistant is
under the direct supervision of a licensed or certified individual;
and 2) the final appraisal document is approved and signed by an individual
who is certified or licensed. Refer to 12 U.S.C. 3351.
Q.
Are licensed and certified appraisers required to conduct on-site inspections
of the real estate that they appraise?
A.
No. Subsection 458.19 (1), Wis. Stats., states, in part, that if an
appraiser has not conducted an on–site inspection of the real estate
for which the appraisal report is prepared, the appraiser must include
a statement in the appraisal report that the appraiser has not done
so. Subsection 458.19 (2), Wis. Stats., states that if any buildings
or dwe ll ing units are located on the real estate for which the appraisal
report is prepared and the appraiser has not conducted an on–site inspection
of both the exterior and the interior of each building or dwelling unit,
the appraiser must include a statement in the appraisal report that
the appraiser has not done so.
Q.
How long are licensed and certified appraisers required to maintain
records relating to appraisal transactions?
A.
In most cases, licensed and certified appraisers are required to maintain
records for at least 5 years. If the performance of an appraisal results
in litigation, licensed and certified appraisers are required to maintain
records for at least 2 years after the termination of any litigation
related to the transaction for which the appraisal report was prepared.
Refer to s. 458.18, Wis. Stats.
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Scope
of Practice
Q.
What is the scope of practice of licensed appraisers?
A.
Licensed appraisers may conduct appraisals of complex 1-to-4 family
residential property having a transaction value of not more than $250,000;
non-complex 1-to-4 family residential property having a transaction
value of not more than one million dollars, and commercial real estate
having a transaction value of not more than $250,000.
Q. What is the scope of practice of certified residential appraisers?
A.
Certified residential appraisers may conduct appraisals of residential
real estate without regard to transaction value and of commercial real
estate having a transaction value of not more than $250,000.
Q.
What is the scope of practice of certified general appraisers?
A.
Certified general appraisers may conduct appraisals of residential real
estate and commercial real estate without regard to transaction value.
Q.
How is the term "transaction value" defined?
A.
The term "transaction value" is defined to mean one of the
following:
(1)
For loans or other extensions of credit, the amount of the loan or extension
of credit.
(2)
For sales, leases, purchases, and investments in or exchanges of real
property, the market value of the real property interest involved.
(3)
For the pooling of loans or interests in real property for resale or
purchase, the amount of the loan or market value of the real property
calculated with respect to each such loan or interest
in
real property.
Q.
How is the term "complex 1-4 family residential property appraisal"
defined?
A.
The term "complex 1-to-4 family residential property appraisal"
is defined to mean an appraisal of 1-to-4 family residential property
in which the property to be appraised, the form of ownership, or market
conditions are atypical.
Q.
Who decides if an appraisal is complex?
A.
Under federal law, financial institutions are responsible for making
the final determinations of whether appraisals are complex. A financial
institution may presume that appraisals of 1-to-4 family residential
properties are not complex, unless the institution has readily available
information that a given appraisal will be complex. If during the course
of the appraisal a licensed appraiser identifies factors that would
result in the property, form of ownership, or market conditions being
considered atypical, the financial institution must either ask the licensed
appraiser to complete the appraisal and have a certified appraiser approve
and cosign the appraisal, or engage a certified appraiser to complete
the appraisal. Refer to 12 CRF 225.63.
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Professional
Standards
Q.
What professional standards are licensed and certified appraisers required
to follow when conducting real estate appraisals?
A.
Licensed and certified appraisers are required to comply with the Uniform
Standards of Professional Appraisal Practice (USPAP) when conducting
appraisals involving federally related and non-federally transactions.
Q.
Who publishes the Uniform Standards of Professional Appraisal Practice?
A.
The Uniform Standards of Professional Appraisal Practice is published
by the Appraisal Standards Board (ASB) of the Appraisal Foundation.
The Appraisal Foundation is a non-profit organization. The original
USPAP became effective on April 27, 1987 .
Q.
Where can I obtain a copy of the USPAP?
A.
The USPAP may be purchased from the Appraisal Standards Board of the
Appraisal Foundation by writing to the Foundation at 1029 Vermont Avenue,
N.W., Suite 900, Washington, D.C. 20005 or by calling (202) 347-7722.
An electronic copy of the USPAP is available, at no cost, on the Appraisal
Foundation's website at: http://www.appraisalfoundation.org
.
Q.
What version of the USPAP are licensed and certified appraisers required
to comply with when conducting real estate appraisers?
A.
A ll appraisals performed in connection with federally related transactions
and non-federally transactions must conform to the version of the USPAP
incorporated by reference in Chapter RL 87, Appendix I. Refer to s.
RL 86.01 (1), Wis. Adm. Code.
Q.
How many hours of USPAP continuing education are licensed and certified
appraisers required to complete biennially in order to renew their credentials?
A.
Licensed and certified appraisers are required to complete at least
28 hours of continuing education in each biennial period which shall
include successful completion of the 7-hour uniform standards of professional
appraisal practice course or its equivalent that is approved by the
Appraiser Qualifications Board (AQB) of the Appraisal Foundation. Course
equivalency shall be determined through the AQB course approval program
or by an alternate method established by the AQB.
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