Every Attorney Should Know About Appraisal Report Critique

TASA ID: 450

The theory and practice of Appraisal Review (critique) differs among practitioners. One reason is that the appraisal profession is diverse. It includes valuation of businesses, real estate, antiques, fine art, jewelry, coins, stamps, wine, trademarks, copyrights, and machinery. 

In the majority of legal disputes, the issue is money and it is an appraiser, as expert witness, who typically provides the money figure. Likely, in property value disputes, there is an appraiser on both sides. Attorneys should know that an appraisal report critique is more than just the personal opinion of an opposing expert. An independent objective professional appraisal review can provide preventive medicine to help protect and inform an attorney whether the underlying report is seriously flawed. An appraisal review of the attorney’s own expert report can help the attorney fix any material errors.

An appraisal report critique is a formal objective written analysis of the work of another appraiser. The common term of art is an Appraisal Review. Appraisal Review is a critique of another appraiser’s appraisal report objectively measured against applicable appraisal standards, the logic of the report presentation, and the credibility of the writer.1  

Rule based appraisal review is required. However, some unknowing appraisal report reviewers often present the reviewer’s personal interpretation of what she or he thinks is or is not compliant appraisal practice. The Review Appraiser must measure the underlying report against an authoritative set of appraisal standards. An unsupported personal opinion based only on the review appraiser’s experience 2  might lead to a defamation lawsuit. 

There are three sets of generally accepted appraisal standards, the Uniform Standards of Professional Appraisal Practice (USPAP), the International Valuation Standards (IVS) and the American Institute of Certified Public Accountants (AICPA) Statement of Standards for Valuation Services No. 1.3  

Licensing laws require real estate appraiser who perform appraisals for federally regulated transactions to be state licensed and perform in compliance with USPAP. 4   CPAs, as state licensed public accountants, are required to perform in compliance with AICPA standards. The IVS standards are generally accepted international standards.5   In addition, there is a myriad of appraisal association standards. Each appraisal association requires its members to perform in accordance with that association’s practice standards. Often association standards conflict with USPAP, IVS, or AICPA standards. The American Society of Appraisers (ASA) provides accreditation in dozens of appraisal disciplines from business valuation to fine arts and machinery. Each discipline has its own specific set of practice standards. The National Association of Certified Valuators and Analysts (NACVA)6 provides two types of business valuation certificates, a CBA and CVA. The Institute of Business Appraisers (IBA) provides a CBA certificate. The AICPA credential for expertise in business valuation is the Accredited in Business Valuation (ABV) designation. Association designations are not academic degrees and association guideline standards are not rules and not enforced. The association appraisal designations are membership certificates. The title CPA means a person holds a state license to provide accounting services. It is not a state certification of competency in business valuation. Society tends to ascribe and infer expertise to people with letters after their name. Attorneys should look beyond the letters. 

An Appraisal Review is not and should not be a personal attack. It must be an objective professional critique based on evidence and measured against applicable appraisal standards, the logic of the presentation, and the credibility of the appraiser. 

The Appraisal Review process can be difficult because many appraisal associations’ standards are vague, ambiguous, and principles-based rather than rule based. Reviewing a business valuation report for compliance with a set of standards requires the underlying appraiser to have committed in writing (warranted) to having performed in accordance with an identified set appraisal standards. There is no industry-wide single set of business valuation standards. If the appraiser is a member of a particular appraisal association then that appraiser must comply with that association’s principles-based appraisal standards. An appraisal review considers whether the appraiser actually did comply with such standards while at the same time determining whether the appraiser was required to abide by other standards. An attorney should look at compliance with standards and compliance with the logic of the appraisal argument, supporting evidence, and the competency and credibility of the appraiser. Appraiser reports, including business valuation and are rarely critically reviewed. Therefore, after a few years of practice, many appraisers develop an omnipotent attitude.

Appraisal Review is a separate appraisal discipline that requires specialized education, training, and experience.

1 The Uniform Standards of Professional Appraisal Practice (USPAP) defines Appraisal Review as “the act or process of developing and communicating an opinion about the quality of another appraiser’s work that was performed as part of an appraisal or appraisal review assignment.”

2 Ipsi Dixit means, “I said so, therefore it is true.”

3 USPAP and IVS provide appraisal standards for all types of property. AICPA provides standards for only business valuation.

4 The Financial Institutions Reform, Recovery, and Enforcement Act Title XI (FIRREA 1989) mandates state licensing for real estate appraisers performing appraisals for federally regulated financial institutions. 

5 Only Slovenia has adopted IVS appraisal standards as mandatory appraisal standards. However, many international appraisal associations have adopted IVS standards. 

6 NACVA defines a Business Valuation Review as “the act or process of developing and communicating a member’s opinion regarding the credibility of the work product of another valuation analyst. It is a type of service, whether in written or oral form, intended to provide to identified users that the report is credible.”

This article discusses issues of general interest and does not give any specific legal or business advice pertaining to any specific circumstances.  Before acting upon any of its information, you should obtain appropriate advice from a lawyer or other qualified professional.

This article may not be duplicated, altered, distributed, saved, incorporated into another document or website, or otherwise modified without the permission of TASA. Contact marketing@tasanet.com for any questions.

Request this expert here.


Previous Article What Plagiarism Is – and Is Not
Next Article Contact Center Ergonomics
Tasa ID450

Theme picker


  • Let Us Find Your Expert

  • Note: This form is to be completed by legal and insurance professionals ONLY. If you are a party in a case that requires an expert witness, please have your attorney contact TASA at 800-523-2319.

Search Experts

TASA provides a variety of quality, independent experts who meet your case criteria. Search our extensive list of experts now.

Search Experts