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49 CFR 24 - Non-Regulatory Supplements

Subpart B - Real Property Acquisition Criteria For Appraisals

Federal-Aid Policy Guide
February 14, 2008, Transmittal 41
NS 49 CFR 24B
Section 24.103

Non-Regulatory Supplement

  1. APPRAISAL DATA (49 CFR 24.103(a)(2)). Appraisals should rely on factual information or assumptions supported in the market. Cost or income methods not derived from the market data are unacceptable.

  2. APPRAISAL OF HAZARDOUS WASTE CONTAMINATED REAL PROPERTY (49 CFR 24.103(a)(2)). Increasingly, States are faced with the necessity of acquiring property for right-of-way purposes that contain or have been exposed to hazardous waste. Any necessary cleanup of waste disposal costs is normally reflected in a property's market value. If the property has been cleared of hazardous waste material by the property owner in accordance with applicable government requirements prior to the acquisition of the property by the public agency, the property is to be appraised and valued as if exposed for sale on the open market without regard to costs incurred clearing the waste material. FHWA policy on the appraisal of contaminated properties reflects Uniform Standards of Professional Appraisal Practice (USPAP) Advisory Opinion AO-9. See http://commerce.appraisalfoundation.org/html/USPAP2008/AOs/ao_09_.htm.

  3. COMPARABLE SALES AND TAX ASSESSOR RECORDS (49 CFR 24.103(a)(2)(iii)). A comparable sale verified by tax assessor records could be used as a last resort provided that (1) all reasonable efforts to verify the sale with a party to the transaction such as a grantor, grantee, or broker were first exhausted, and (2) it would be used in conjunction with other properly verified sales, and only if its inclusion leads to a better documented estimate of value.

  4. APPRAISER'S CERTIFICATION STATEMENT (49 CFR 24.103(a)(2)(v)). The appraisal certification contains the limiting conditions, i.e. the conclusions and the appraiser's signed statement certifying that to the best of his/her knowledge and belief his/her conclusions are correct. In the preparation of detailed appraisals where the acquiring agency uses contract (fee) appraisers to perform the appraisals, such appraisers will be certified in accordance with Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).

  5. CONTRIBUTION OF SPECIALISTS IN APPRAISAL REPORTS (49 CFR 24.103(d)). While the Uniform Act and 49 CFR Part 24 are silent on the issue, general appraisal practice, including practice under the Uniform Act, embraces and even requires specialists’ input to the appraisal in situations where the appraiser is not competent to consider or value a certain aspect of the appraisal problem. The best citation supporting use of specialists is in the USPAP Competency Rule where it says, in part, that an appraiser must “take all steps necessary or appropriate to complete the assignment competently;” and that this may be accomplished in several ways, including “. . . association with an appraiser reasonably believed to have the necessary knowledge or experience, or retention of others who possess the required knowledge or experience.”

  6. USE OF CERTIFIED APPRAISERS (49 CFR 24.103(d)(2)). Federal law and regulations do not require that a review appraiser be either licensed or certified to do work on Federal-aid projects. The only Federal requirement relating to State licensing or certification is that if a contract (fee) appraiser is hired to perform an appraisal, then that person must be a State-licensed or certified real estate appraiser.

  7. QUALITY AND VALIDITY OF APPRAISAL PRODUCTS (49 CFR 24.103(d)). States are encouraged to avail themselves of the services of major professional appraisal organizations' professional practices and ethics panels when confronted about the quality and/or validity of the appraisal products they receive. Such organizations would appreciate submission to them for official review of suspect appraisals made by their members and for appropriate disciplinary action, if warranted.

Updated: 04/02/2013
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