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Effectiveness and Impacts of FHWA's Implementation of the 49 CFR 24.102(c)(2) Appraisal Waiver

V. Recommendations

This section contains a summary of the main issues identified regarding the implementation of the appraisal waiver provisions based on an analysis of survey information and the follow-up interviews. Recommendations for both State level and National consideration are provided to address these issues and promote adoption of best practices observed during this review.

The main issues are presented within the context of the research covering implementing practices, effectiveness, and organizational consideration surrounding the use of the appraisal waiver provisions. There is broad acceptance by the States to use the option provided by the Federal rule to waive appraisals on uncomplicated, low-value parcels. Within the three focus areas of the study, our recommendations will address each of the following observations:

The appraisal waiver provision is an option available to the States under the Federal rule that had attached to it a limited set of goals and objectives. The stated intent was to reduce time, reduce cost, and redistribute valuation workload. The State recommendations that follow concentrate on identifying those practices that come closest to achieving the Federal goals and objectives associated with the waiver provision. The national recommendations are directed to the Office of Real Estate Services and address the main purpose for this research study, which is to identify the effectiveness of the Federal policy in implementing appraisal waivers.

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A. State-Level Recommendations

There are a number of best practices associated with State implementation of the appraisal waiver provisions. For all States who are using appraisal waivers, the adopted waiver valuation procedures were developed and are appropriate to the particular circumstances surrounding State law, available personnel, and pre-existing procedures related to appraisal and negotiation. The following comments highlight practices that in the researchers' view achieve the best result within the context of the Federal rule.

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B. National Recommendations

Although there are ways individual States could strengthen their procedures used to implement the appraisal waiver provisions, there is recognition that State procedures and practices have just completed an update cycle and the current State practices have been accepted by the FHWA. The updated final rule issued in January 2005 granting States greater flexibility in the administration of the waiver provision has only been in effect for two years and thus it was not possible to measure the full effect of the new provision within the timeline of this research.

At the national level, the research findings indicating use of appraisers to prepare waiver valuations and the incidence of use of contract personnel to perform waiver valuations should be considered in relation to the expressed intent of the waiver provisions. While it is perhaps too early after revising the rule to take action to curtail such activities, FHWA should closely monitor these practices and attempts should be made to promote revision of State procedures to place responsibilities in the hands of non-appraisers.

Those States that have adopted procedures that promote owner contact prior to valuation are correct in seeking to establish early on in the acquisition process a dialogue with each owner and avoid the potential to miss the owners' insights into how the proposed taking may affect their property. FHWA should reconsider the current guidance that owner contact is not required. Doing so will assure that all owners are provided the same deference without regard to the impact the project may have on their property.

Waiver valuation documentation is quite variable from State to State. These differences in waiver documentation are based mainly on the variation between State laws regarding the rights of owners to be provided with valuation information and the requisites for filing a condemnation action. The higher documentation requirements observed during this review were related to these factors and were an attempt to provide all owners with comparable information. The necessity to maintain consistency in the treatment of owners is an essential component of the Uniform Act.

The decreases in staffing levels for appraisers and review appraisers within the State Department of Transportation organization reported by the survey respondents are a point of concern. The inability to hire staff appraisers will likely reduce the pool of talent available to fill appraisal manager and reviewing appraiser positions in the future. Further action to assess the impact of the decrease in internal State staffing and encourage active recruitment of new appraisers by States needs to be considered. State support for training and promotion of appraiser certification also needs to be encouraged.

Appraisal standards under USPAP and the appraisal requirements being used on Federal projects need to be conformed to avoid conflicts. Implementing the appraisal waiver provision using non-appraisers is the preferred way to avoid a conflict. When States use appraisers to prepare waiver valuation reports, it dilutes the development process of both staff and fee appraisers. Appraisers generally cannot use work activities related to preparing waiver valuations as creditable service for maintaining or attaining certification.

To provide Feedback, Suggestions or Comments for this page contact John Turpin at john.turpin@dot.gov.

Updated: 04/02/2013
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