INTERNATIONAL COMPLIANCE
Hello Fellow Appraisers,
Since almost every appraisal rendered will be used in some kind of legal action, it is stated that a valuation is a legal document. Additionally, there are laws and regulations that state what is expected from an appraisal. And in the United States, we have a federal as well as state jurisdictions, plus the District of Columbia. And, within a state, for example, there are counties or parishes that count as jurisdictions. Thus, each jurisdiction can have a law or regulation that dictates how the appraisal is supposed to be rendered for a particular assignment. The effective date and value definition are the most legally stated aspects of an appraisal.
Thus, if one is rendering an appraisal to be used in a dissolution of marriage action, the state where the divorce has been filed has jurisdiction. You may be examining an item in Texas, but the divorce is being settled in Utah, then Utah's laws apply. Therefore, to do such an assignment, the appraiser must have access to all U.S. jurisdictions' laws. The Appraising Demystified website details all jurisdictions for dissolution of marriage as well as other assignments.
Just how much of a spread in U.S. jurisdictional requirements can be for an appraisal assignment? Using divorce as an example, the five effective dates can be the date of filing, the date of separation, the date of the hearing for division of the property, a court selected date, or the date of decree. And there are six value definitions, namely fair value, fair market value, present value, value, net market value, and net value. Thus, one must know what combination of the effective date and value definition is required in the jurisdiction where the case is lodged.
"But I only do insurance appraisals," you say. If the client secures insurance and it is an actual cash value policy, which is almost always the case, and a complete casualty loss occurs, then the value definition will be actual cash value. However, different jurisdictions define actual cash value differently. For example, California defines actual cash value as fair market value and not retail replacement minus obsolescence and depreciation. Again, Appraising Demystified website details all jurisdictions for insurance casualty loss.
If a course claims to be international, would it not only have all the U.S. jurisdictions available, but all countries and their jurisdictions? Such a course would detail the legal requirements for 193 countries and their possible jurisdictions! Any course or resource that claims to teach international appraisal methodology is most likely a prevarication.
The floccipaucinihilipification of appraisal courses, publications, et cetera claiming to be international may be evident. That is a big word that means "the estimation of something as worthless."
Written by Bill Hoefer
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