The Uniform Standards of Professional Appraisal Practice (USPAP) provides guidance on performing an appraisal, however, does not define an “appraiser”. Therefore, USPAP does not prohibit any person, licensed or unlicensed, from completing an appraisal and/or signing an appraisal report.
Colorado’s appraiser license law does not prohibit an unlicensed person from performing a property inspection, performing a significant amount of the appraisal, nor signing on the left side of commonly used pre-printed appraisal forms, such as those developed by Fannie Mae, Freddie Mac, or the General Purpose Appraisal Report (GPAR).
However, restrictions on an individual that completes an appraisal assignment or signs a report may be imposed by a form proprietor or appraisal client.
For example, Fannie Mae and Freddie Mac allow an unlicensed person, such as a trainee, to complete an appraisal and sign on the left of their proprietary forms with certain conditions and in a specific manner, however, the client may prohibit an unlicensed person from signing the report.
The Department of Housing and Urban Development (HUD), which accepts Fannie Mae/Freddie Mac forms, prohibits any person other than the assigned FHA Roster Appraiser from not only signing a report, but conducting critical tasks such as selecting comparables and performing any analysis, as well.
Significant Assistance Reporting
When an unlicensed person signs an appraisal report or is referenced as providing significant appraisal assistance, the appraisal report commentary and/or certification must provide relative details which may include:
- The name or names of the person(s) who performed the inspection of the subject property
- A statement that the “trainee” is unlicensed
- A description of the extent of the significant real property appraisal assistance provided by the unlicensed person (This is mandatory for appraisal applicants seeking to obtain an appraisal license or upgrade an existing license to assist the Division with determining whether the unlicensed person has obtained acceptable experience)
- An attestation from the licensed or certified appraiser that the unlicensed person who performed the inspection is competent to do so and that the work of this person is credible
USPAP (version 2022-23) states that: The names of individuals providing significant real property appraisal assistance who do not sign a certification must be stated in the certification (Standards Rule 2-3), and: When any portion of the work involves significant real property appraisal assistance, the appraiser must summarize the extent of that assistance within the appraisal report (Standards Rule 2-2(a)(vii)).
When using pre-printed certification forms, ensure that the entries made on the form do not contradict commentary provided within the body of the report.
For example, if all of the bullet-pointed items noted above were addressed within the body of the report, then the certification form should either reiterate the information or reference the page(s) with the correct information:
The person or persons signing a report accepts responsibility for the entire assignment’s compliance with USPAP and rules established by the Board of Real Estate Appraisers (BOREA), the client, and form proprietors, if applicable.
Fannie Mae/Freddie Mac appraisal forms contain a certification which includes language that outlines the minimum requirements of the report signer(s), such as performing a complete visual inspection of the subject and comparable properties, identifying a property’s physical attributes and deficiencies, developing an opinion of market value, etc. Consequently, a trainee who only provides administrative type of assistance may not sign a report.
Should a report be found non-compliant or in error, all signers of a report, including both the trainee and supervisor, are liable.
When only a supervisory appraiser signs a report, then they are the only party responsible for non-compliance.
When an unlicensed person signs on the left side of a form, it is important that the client and other intended users are not misled.
Since Colorado does not have a credential for “trainees”, the unlicensed person should include commentary in the appraisal report stating that they are unlicensed. As long as in conformance with form proprietors and clients, the signature fields titled: State Certification #, State License #, State #, and Expiration Date of Certification or License should be left blank. “Trainee” should be entered in the Other field as exampled below:
When a licensed or certified appraiser signs on the right side of the form, the applicable box to indicate whether they inspected the subject property must be checked. If they did not inspect the subject property, the licensed or certified appraiser must check the “Did not inspect subject property” box so as to avoid misleading the intended users of the report.
Any individual, regardless of whether they hold an appraisal license, may complete an appraisal report as long as they are competent to do so, it is permitted by the client or form proprietor and complies with their current requirements.
The name of a person providing significant appraisal assistance who does not sign a certification must be stated within the certification, along with a summary of the extent of that assistance.
An unlicensed person may only sign a report when they performed a significant amount of work, including, but not limited to, the inspection of the subject and comparable properties, disclosing the subject properties physical characteristics, selecting the appropriate data for analysis, analyzing the data and reporting the conclusions.
The person or persons signing an appraisal report must ensure they comply with USPAP, BOREA rules, client and form proprietor allowances and requirements. Signers accept full responsibility for appraisal conclusions and any associated liability for non-compliance, errors or omissions.
- Additional Resources
Freddie Mac Seller/Servicer Guide
The Appraisal Foundation’s podcast titled: What Does It Mean if a Trainee Signs a Form?
(Note: Contact the applicable mortgage servicer for the most current version of their guide or handbook)