§ 24.103 - Criteria for appraisals.

§ 24.103 Criteria for appraisals.

(a) Appraisal requirements. This section sets forth the requirements for real property acquisition appraisals for Federal and federally - assisted programs. Appraisals are to be prepared performed according to these requirementsthis section, which are is intended to be consistent with the Uniform Standards of Professional Appraisal Practice ( USPAP). ^[1] (See appendix A to this part, § section 24.103(a).) The Agency agency may have appraisal requirements that supplement these requirementsthis section, including, and to the extent appropriate, the Uniform Appraisal Standards for Federal Land Acquisition (UASFLA), also commonly referred to as the “Yellow Book”. The USPAP is published by The Appraisal Foundation. The UASFLA is published by the Appraisal Foundation in partnership with the Department of Justice on behalf of the Interagency Land Acquisition Conference. The UASFLA is a compendium of Federal eminent domain appraisal law, both case and statute, regulations, and practices.^[1] Copies of the USPAP and the UASFLA may be ordered from The Appraisal Foundation in print and electronic forms.^[2]

(1) The Agency agency acquiring real property has a legitimate role in contributing to the appraisal process, especially in developing the scope of work and defining the appraisal problem. The scope of work and development performance of an appraisal under these requirements this section depends on the complexity of the appraisal problem.

(2) The Agency agency has the responsibility to assure that the appraisals it obtains are relevant to its program needs, reflect established and commonly accepted Federal and federally - assisted program appraisal practice, and as at a minimum, complies comply with the definition of appraisal in § 24.2(a)(3) and the five following requirements : (in paragraphs (a)(2)(i) through (v) of this section. (See appendix A to this part, §§ sections 24.103 and Section 24.103(a).)

(i) An adequate description of the physical characteristics of the property being appraised (and, in the case of a partial acquisition, an adequate description of the remaining property), including items identified as personal property, a statement of the known and observed encumbrances, if any, title information, location, zoning, present use, an analysis of highest and best use, and at least a 5-year sales history of the property. (See appendix A to this part, § section 24.103(a)(1).)

(ii) All relevant and reliable approaches to value consistent with established Federal and federally - assisted program appraisal practices. If the appraiser uses more than one approach, there shall be an analysis and reconciliation of approaches to value used use that is sufficient to support the appraiser's opinion of value. (See appendix A to this part, § section 24.103(a).)

(iii) A description of comparable sales, including a description of all relevant physical, legal, and economic factors such as parties to the transaction, source and method of financing, and verification by a party involved in the transaction.

(iv) A statement of the value of the real property to be acquired and, for a partial acquisition, a statement of the value of the damages and benefits, if any, to the remaining real property, where appropriate.

(v) The effective date of valuation, date of appraisal, signature, and certification of the appraiser.

(b) Influence of the project on just compensation. The appraiser shall disregard any decrease or increase in the fair market value of the real property caused by the project for which the property is to be acquired, or by the likelihood that the property would be acquired for the project, other than that due to physical deterioration within the reasonable control of the owner. (See appendix A to this part, § section 24.103(b).)

(c) Owner retention of improvements. If the owner of a real property improvement is permitted to retain it for removal from the project site, the amount to be offered for the interest in the real property to be acquired shall not be not less than the difference between the amount determined to be just compensation for the owner's entire interest in the real property and the salvage value (defined at § 24.2(a)(24) ) of the retained improvement.

(d) Qualifications of appraisers and review appraisers.

(1) The Agency agency shall establish criteria for determining the minimum qualifications and competency of appraisers and review appraisers. Qualifications shall be consistent with the scope of work for the assignment. The Agency agency shall review the experience, education, training, certification/licensing, designation(s) and other qualifications of appraisers, and review appraisers, and use only those determined by the Agency agency to be qualified. (See appendix A to this part, § section 24.103(d)(1).)

(2) If the Agency agency uses a contract (fee) appraiser to perform the appraisal, such appraiser shall be State licensed or certified in accordance with title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) (12 U.S.C. 3331 et seq.).

[70 FR 611, Jan. 4, 2005, as amended at 70 FR 22611, May 2, 2005]

Footnotes - 24.103

^[1] Uniform Standards of Professional Appraisal Practice (USPAP). Published by The Appraisal Foundation, a nonprofit educational organization. Copies may be ordered from The Appraisal Foundation at the following URL: http://www.appraisalfoundation.org/htm/USPAP2004/toc.htm.

^[2] The “Uniform Appraisal Standards for Federal Land Acquisitions” is published by the Interagency Land Acquisition Conference. It is a compendium of Federal eminent domain appraisal law, both case and statute, regulations and practices. It is available at

www.justice.gov/file/408306/download.

^[2]http://www.usdojappraisalfoundation.govorg/enrdimis/land-ack/toc.htm or in soft cover format from the Appraisal Institute at http://www.appraisalinstitute.org/econom/publications/Default.asp and select “Legal/Regulatory” or call 888-570-4545.TAF/Standards/Appraisal_Standards/TAF/Standards.aspx.